As we indicated in our most recent edition of our FAME Regulatory Bulletin last week, financial aid administrators are betwixt the years.  Between award years, that is.  Although the profession has become proficient working in this state of in-between, it is critical to be aware of the latest guidance related to the two award years’ data being handled at the same time.  Due to the breadth of information to be covered and the addition of new reference tables, we broke the content into two parts, covered in successive editions of our Regulatory Bulletin.

We began last week’s Regulatory Bulletin by directing you to a table we designed to detail the definitive resources for verification in the two award years for which institutions may be processing now.  We also shared another table we developed that provides ED’s guidance on the means for authentication of income and related tax information.  We followed that with an illustration that shows documentation that is acceptable to verify an applicant’s non-filing status.  (This, of course, is sometimes called Verification of Non-Filing.)  Additionally, the various Verification Tracking Groups that are applicable in 2018-2019 and 2019-2020 were provided in a format for quick review and access.

In this edition of the FAME Regulatory Bulletin, we expand our discussion on the topic of verification begun last week.  We look at guidance related to more unique situations, such as how to handle those applicants who are individuals that are eligible for Auto Zero Expected Family Contribution (EFC), along with how to document high school completion status and the applicant’s statement of educational purpose, for those in Verification Tracking Groups V4 or V5.  Finally, we cover points related to gathering the documentation to complete verification, and then, close with a brief description of additional customary resources that are helpful in the verification process.

Distinctive Verification Items for Individuals Eligible for Auto Zero Expected Family Contribution (EFC)

It is important to keep in mind the slight differences in the verification requirements between those stipulated for dependent versusindependent students for those applicants who are placed in Verification Tracking Groups V1 or V5 that are eligible for an Auto Zero EFC.  As specified in the May 5, 2017, Federal Register, DCL GEN-17-05, and in the  March 28, 2018, Federal Register, the following information is required for verification for these individuals:

For dependent students—

  • the parents’ adjusted gross income (AGI) if the parents were tax filers;
  • the parents’ income earned from work if the parents were nontax filers; and
  • the student’s high school completion status and identity/statement of educational purpose, if placed in Verification Tracking Group V5.

For independent students—

  • the student’s and spouse’s AGI if they were tax filers;
  • the student’s and spouse’s income earned from work if they were nontax filers;
  • the student’s high school completion status and identity/statement of educational purpose, if placed in Verification Tracking Group V5; and
  • the number of household members (in order to determine if the independent student has one or more dependents other than a spouse).

For all Auto Zero EFC-eligible applicants placed in Verification Tracking Group V4, the student’s high school completion status and identity/statement of educational purpose information must be verified.

Documentation of High School Completion & Identity/Statement of Educational Purpose

As a reminder, it is helpful to re-state the requirements for individuals assigned to Verification Tracking Groups V4 and V5.  These, of course, have to do with the student’s identity and the statement of educational purpose.

High School Completion Status

For individuals in Verification Tracking Groups V4 and V5, if the school has successfully documented and verified the student’s high school completion status in a previous award year, the school does not have to verify the high school completion status again in subsequent award years.  [But, it is important to retain the documentation for the year in question (i.e., the year being verified) for audit and program review purposes.]

Documentation of high school completion status may include:

  • a copy of the applicant’s high school diploma;
  • a copy of the applicant’s final official high school transcript that shows the date when the diploma was awarded; or
  • a copy of the ‘‘secondary school leaving certificate’’ (or other similar document) for students who completed secondary education in a foreign country and are unable to obtain a copy of their high school diploma or transcript. Note:  Institutions that have the expertise may evaluate foreign secondary school credentials to determine their equivalence to U.S. high school diplomas.  Institutions may also use a foreign diploma evaluation service for this purpose.  (FAME does not provide transcript evaluation services.)
  • a recognized equivalent of a high school diploma, such as:
    • a General Educational Development (GED) Certificate or GED transcript;
    • a State certificate or transcript received by a student after the student has passed a State-authorized examination (HiSET, TASC, or other State-authorized examination) that the State recognizes as the equivalent of a high school diploma;
    • an academic transcript that indicates the student successfully completed at least a two-year program that is acceptable for full credit toward a bachelor’s degree at any participating institution; or
    • for a person who is seeking enrollment in an educational program that leads to at least an associate degree or its equivalent and who excelled academically in high school but did not complete high school, documentation from the high school that the student excelled academically and documentation from the postsecondary institution that the student has met its written policies for admitting such students.
  • documentation of homeschool completion
    • a copy of the credential the State approves in states where law requires homeschool secondary school completion credentials be issued to homeschool students; or
    • if State law does not require a secondary school completion credential, a transcript or the equivalent signed by the student’s parent or guardian that lists the secondary school courses the student completed and that documents the successful completion of a secondary school education in a homeschool setting.

Alternative documentation of high school completion status for those where documentation of their high school completion status is unavailable has been authorized in limited cases.  Such cases may include scenarios where the secondary school is closed and information is not available from another source, such as the local school district or a State Department of Education, or in the case of homeschooling, the parent/guardian who provided the homeschooling is deceased.  For those students who have been in the military, schools may accept a copy of the student’s DD Form 214 “Certificate of Release or Discharge from Active Duty” as alternative documentation to verify a student’s high school completion if it indicates that the individual is a high school graduate or equivalent.

Identity/Statement of Educational Purpose

For students in Verification Tracking Groups V4 or V5, institutions must document the identity of the individual who has applied for Title IV Federal Student Aid.

  • To do so, the applicant must appear in person and present the appropriate documentation to an institutionally authorized individual to verify the applicant’s identity.
    • Appropriate documentation may include:
      • An unexpired, valid government-issued photo identification. Such identification includes, but is not limited to, a driver’s license, non-driver’s identification card, other State-issued identification, or U.S. passport.  (Note:  An unexpired valid government-issued photo identification is one issued by the U.S. government, any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, a federally recognized American Indian and Alaska Native Tribe, American Samoa, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau.)
    • The institution must maintain an annotated copy of the unexpired valid government-issued photo identification that includes:
      • The date the identification was presented; and
      • The name of the institutionally authorized individual who reviewed the identification.
  • To further affirm the student’s understanding that Title IV Federal Student Aid funds that are received may only be used for educational purposes and to pay the cost of attending the institution, the applicant must provide a signed statement using the exact language ED provided in the “Statement of Educational Purpose” in the Federal Register (for the applicable award year), except that the student’s identification number is optional if collected elsewhere on the same page as the statement.
    • If an institution determines that an applicant is unable to appear in person to present an unexpired valid photo identification and execute the Statement of Educational Purpose, the applicant must provide the institution with:
      • A copy of an unexpired valid government-issued photo identification such as, but not limited to, a driver’s license, non-driver’s identification card, other State-issued identification, or U.S. passport that is acknowledged in a notary statement or that is presented to a notaryand
      • An original notarized statement signed by the applicant using the exact language ED provided in the “Statement of Educational Purpose” in the Federal Register (for the applicable award year), except that the student’s identification number is optional if collected elsewhere on the same page as the statement.

It is recommended that schools review the most recent Program Integrity Regulations “Questions and Answers” on ED’s Web site related to high school diplomas at Program Integrity Questions and Answers – High School Diploma for the latest guidance on this topic, including when a refugee, asylee, or victim of human trafficking are not able to obtain documentation of high school completion in another country.

Disseminating the Request for Verification Documentation

As has been the case for a number of years now, ED does not provide sample “Verification Worksheets.”  However, ED’s current practice is to provide “suggested” verification text that an institution may use for developing its own verification forms or worksheets.  The “suggested” text that may be used was distributed as part of ED’s August 16, 2017, Electronic Announcement as Attachment A for 2018-2019, and as Attachment A of the June 8, 2018 Electronic Announcement for 2019-2020.

It is important to recall that the sample text ED provided is simply that, “suggested” text.  An institution may modify the wording as long as the institution words it in such a way as to collect the necessary, accurate information required for verification.

One exception to the concept of “suggested” text is when it comes to the “Statement of Educational Purpose.”  ED clearly directs institutions that they must use the exact wording as provided for the Statement of Educational Purpose that is required to be signed at the institution (or, in limited situations when a student is unable to appear at the institution, by submitting the statement after it was signed and notarized in the presence of a Notary Public).

ED released the “Application and Verification Guide” (AVG) volume of the 2018-2019 Federal Student Aid Handbook on January 3, 2018.  The suggested text is included as approximately the last 14 pages of Chapter 4 of the volume, beginning on page AVG-96.  The AVG of the 2019-2020 Federal Student Aid Handbook is not yet published as of the time of this writing.  (NOTE:  For FAME clients, we develop sample verification worksheets and forms that may be used.  They may be accessed by logging in to FAME Connect and selecting the Financial Aid Services Procedures Manual option, followed by selecting item “A. 2019-2020 Award Year” (or other pertinent award year).  Next, select the option “2. Appendix” for the list of all available sample forms.)

Designed Verification Resources for 2018-2019 and 2019-2020

After one becomes familiar with the regulatory and sub-regulatory guidance delineated above, and in last week’s FAME Regulatory Bulletin, it is important to keep in mind the general detailed direction offered in two other ED publications.

First, as an aid administrator, it is always a good idea to be acquainted enough with the current award year’s Application and Verification Guide(AVG)[1] to be at ease with it.  The AVG has, for a number of years, been merged into the Federal Student Aid Handbook as one of its volumes that are updated and published each year.  It contains many answers to general questions on the FAFSA.  ED released the “Application and Verification Guide” volume of the 2018-2019 Federal Student Aid Handbook on January 3, 2018.  (The AVG for 2019-2020 has not yet been released as of this writing.)

Likewise, since 2012 (for the 2012-2013 award year), ED has assisted the financial aid community by providing a “FAFSA Verification-IRS Tax Return Transcript Matrix”.  This useful tool helps ensure you are checking the correct line of information on tax returns and tax transcripts when performing verification.  We have included the 2018-2019 Matrix as Appendix A-11 on FAME Connect.  Note that if ED makes this tool available again for 2019-2020, some differences are likely to be seen in the format due to the tax law changes in effect for 2018 that reduced the number of tax form variations.  If a 2019-2020 version of the Matrix is developed by ED, it will be communicated via an Electronic Announcement on IFAP (and we will include it as an appendix to our procedures manual on FAME Connect for our clients).

Finally, it is recommended that schools review the most recent Program Integrity Regulations Questions and Answers related to verification on ED’s Web site at Program Integrity Questions and Answers – Verification.  ED posts its most current guidance, and changes in guidance, on this site.

Determining the Impact of Verification on Your Procedures and Policies

As we have detailed the requirements and new aspects of verification in our annual review of verification in this issue and in the last edition of our FAME Regulatory Bulletin, there are certain considerations for your institution’s operations that surface.  If it has not been done already, now is a good time to review your processes and policies.  Specifically, the following items are items about which you should take action.

Checklist for Enhanced Verification and Compliance:

  1. Review your current verification policies and procedures to ensure they meet the requirements of ED, as well as the recent changes in ED’s guidance. For example:
    • Have you defined the time period within which students selected for verification must submit the required documentation?
    • Have you defined and described the consequences of not submitting the necessary documentation on time?
    • What method will you use to notify students if their EFC and/or Title IV award amounts change as a result of verification?
    • What procedures will you or the student use to correct data on their FAFSA?
    • What is your policy and process for notifying the Office of the Inspector General if you suspect fraud on an application?
    • How do you ensure that you have completed verification for a selected student before exercising professional judgment (PJ)?
  2. What is your process for notifying students in a timely manner that they have been selected for verification, and the documents they must submit, the deadlines they must meet, and the consequences of not meeting the deadlines?
  3. Who, within your institution and Financial Aid Office, have the specific responsibilities related to the various aspects of the verification process? Specifically, who will:
    • Review ISIRs to determine those selected for verification?
    • Notify students of being selected for verification? What method will be used to notify students?
    • Make corrections to data once errors are noted? Staff? (Who?)  Student/Parent?
    • Report the verification results of identity and high school completion status for those students who have an ISIR tracking flag of V4or V5 (even those only eligible for unsubsidized aid)?
    • Monitor whether a student was moved from Tracking Group V1 or V4 to V5, and ensure no aid is disbursed until all of the requirements of V5 verification are satisfactorily met?
    • Monitor for those students who met the Automatic Zero-EFC status as it relates to the verification requirements?
    • Report the student’s “verification status” to COD when a student is disbursed a Pell Grant, whether selected for verification or not?
  4. Who “does” verification (i.e., reviews documentation provided in comparison with the ISIR data)?
  5. What will be your method of obtaining tax transcript data when needed? (Student bringing in copy received from IRS?  Use of IRS IVES process or third-party IVES service?)  What method will you use to inform students/parents?
  6. What is your method to ensure the verification reporting for those with V4 or V5 is done within 60 days following your first request for verification documentation? (Be sure to include in your policies that you will print and keep the confirmation page for your records that the reporting was done.  Who does this?)
  7. Will your institution inform students (if so, who?) of such new things as the new option for using a Customer File Number (CFN) when requesting a tax transcript: that tax transcripts will only be mailed to the taxpayer’s record of address; and, about the ability to report a rollover in the FOTW process?
  8. When will you update your policies and procedures regarding verification, and who will do it?

The above items brought to remembrance and addressed will assist in making your processing and compliance more solid as it relates to verification.

Yes, the Financial Aid Administrator’s work continues, betwixt and between—as we ride the processing wave for 2018-2019, while at the same time initiating processing for 2019-2020.  And, even though we are in that state of flux, still awaiting publications and sources related to verification for 2019-2020 that ED historically provides, we continue on.  The goal is to make sure that all potentially eligible student aid recipients apply for aid, and do so accurately, as part of our fiduciary role.  We maneuver the state of betwixt and between to exercise our responsibility to help financial aid applicants get it right on each application data element.

Publication Date:  March 18, 2019

(DCL GEN1705 FR05052017 FR08222017 EA 06062018 DCL GEN1803 FR03282018)

[1] 2018-2019 Application and Verification Guide of the Federal Student Aid Handbook.  (The 2019-2020 Application and Verification Guideshould be released by ED soon.)