Financial Aid 201 August 8, 2012

1. Financial Aid 201August 8, 2012 Mary Kay Freshour Associate Director of Financial Aid Otterbein University

2. What is Verification • Process of reviewing certain information provided on the FAFSA for accuracy and completeness • Title IV applicants— • Selected by ED or • Selected by institution • Data elements identified in Federal Register notice or by institution

3. Verification - Definitions • Subsidized student financial assistance programs • Eligibility uses EFC • Verification applies • Pell, FSEOG, FWS, Perkins, Direct Subsidized Loan • Unsubsidized student financial assistance programs • Eligibility does not use EFC • Verification does not apply • Direct Unsubsidized Loan & DirectPLUS Loan • TEACH Grant

4. Verification Process • Selection : Random, Error Prone, and Institutional • Verification Worksheet (required) • Parent (Step-Parent) 2011 IRS Transcript * • Student 2011 IRS Transcript* • Other forms as requested Schedules from tax returns, divorce/separation agreement, etc. *IRS Tax Retrieval used unchanged

5. Verification Selection • CPS applies risk model to FAFSA data • Goal is to target verification based upon the most error prone data items specific to an applicant • Non-selected applicants are again subject to risk model when submitting corrections • Institutions must verify all applicants selected by CPS

6. Verification Items • All Applicants • Number in household • Number enrolled in college • Child Support Paid, if reported on ISIR • SNAP (formerly food stamps), if reported on ISIR

7. Verification Items cont. Tax Filers: • Adjusted Gross Income (AGI) • Taxes Paid • Specific untaxed income items from Tax Transcript • Untaxed IRA distributions • Untaxed pensions • Education credits • IRA Deductions • Tax exempt interest

8. Verification Process Cont non filers; • copy of W-2 to verify wages or statement regarding no W-2 • Income earned from work

9. Verification Issues • Using Step-Parent Information • Household members (support at least 51%) • Number of family members in college (not parent) • Untaxed income • Independency (more detail later)

10. Verification Items cont. • Nontax Filers • Copy of IRS Form W-2 for each source of employment income received for tax year 2011 • A signed statement certifying that the individual has not filed and is not required to file an income tax return for tax year 2011 • Sources and amounts of income earned/received and not on W-2’s

11. Verification Issues cont. • Independent (Birth Date, Married, Veteran of armed services, Dependent Child*, Graduate Student, or Dependent other than a child or spouse*) • Verification worksheet completed with copy of tax return, other information as needed by the school set up by their policy. *Support more the 50%

12. Verification issues cont. • Other independent questions is up to the policy of the school on what documentation they require. • Ward of court / guardianship papers • Emancipated youth (not emancipated for child support)* • Homeless youth documentation (High School homeless liaison) *Ohio does not have emancipated youth law

13. Documentation • Tax Filer Information Acceptable Documentation • IRS Tax Return: Limited conditions • IRS Data Retrieval Process • IRS Transcript not a “Tax Account” • Request • On-Line • Phone – 800-908-9946 • For 4506T-EZ

14. Tax Return Data Conflict • Some examples that must be resolved: • Married filing separately; but both claimed “Head of Household” • Student claimed self as exemption, but so did the parent • A student claims not required to file but earned $30,000 from work • Married filing separate on tax return but FAFSA indicated single • Number in College includes parent

15. IRS Extension Filers • Verification is complete if you have -- • Documentation of IRS extension and • 2011 W-2 Forms or statement from self-employed individual • MAY require an individual granted a tax filing extension to provide a copy of their completed and signed tax return when filed • MUST verify AGI and taxes paid, if you receive a copy of the return • May return all funds disbursed, if you do not receive copy

16. Verification & PJ • Requires verification of all selected applicants before exercising professional judgment • Does not require verification before exercising PJ for non-selected applicants

17. 2013-14 Verification • Continuing to take small steps towards customized verification • Items to be verified will be grouped • Individual student’s ISIR record will indicate which group of items the student must verify

18. 2013-14 Verification cont. Verification items— • Retained all items subject to verification in 2012-13 (customized selection) • Added two new items— • High school completion status • Identity/Statement of Educational Purpose

19. 2013-14 Verification Documentation of high school completion status: high school diploma— • High school diploma; or • Final high school transcript that shows the date of graduation  Note:  If a copy of an applicant’s high school diploma or final high school transcript is unavailable, the institution may accept alternative documentation.

20. 2013-14 Verification cont. Documentation of identity/statement of educational purpose— • Appear in person and present to an institutionally authorized individual-- • A valid government-issued photo identification (driver’s license, non-driver’s license, military identification, or passport); and • A signed statement of educational purpose

22. Special Circumstance / Professional Judgment (PJ) • Must complete verification prior to exercised PJ if present

23. Special Circumstance / PJ • Loss of employment/Income • One time withdrawal • Overtime • Child Support • Loss of Job / retirement • Divorce / Separation • High Medical Costs • Parent In College • Death of Parent • Tuition payments for Private Post Secondary Schools • Dependency override **

24. Special Circumstance/PJ Cont. Forms(needed but not limited to) • Special Circumstance Request Form • Verification Information (required) • Last Pay Stub, letter of dismissal, unemployment benefits statement • Divorce Decree or Separation agreement, separate address statement, letter from lawyer • Child Support last payment letter • Break down of Medical Costs or copy of schedule A • Request further information if needed

25. Special Circumstance/ PJ Cont. • Case by Case review by committee or individuals • Review and determine according to school policy the course of action • A one time/year award change

26. Independent Questions FAFSA 12-13 • Orphan, in foster care, or ward of the court at any time when the student was 13 years of age or older • An emancipated minor or in a legal guardianship as determined by the court • Unaccompanied youth who is homeless or who is at risk of homelessness and is self-supporting. • Age, dependent Child, armed services, grad student

27. Dependency Override • Check with each College Financial Aid office regarding their procedure • Special Circumstance Form • Letters of Explanation and documentation ex: supporting letters or student situation, court documents • Approved override done by FA official

28. Dependency override cont. • Cannot override if singly or in combination, may qualify as unusual circumstances: • Parent’s refuse to contribute to the student’s education • Parent’s are unwilling to provide information on the FAFSA or for verification • Parent’s do not claim the student as a dependent for income tax purposes • Student demonstrates total self sufficiency • Student has a child and not providing more than 50% support. • Student is 18 and no one is responsible for student.

29. QUESTIONS?