Publication Date: July 13, 2011

DCL ID:  GEN-11-13

Subject: 2012-2013 Award Year: FAFSA Information to be Verified, and Acceptable Documentation

Summary: This letter provides important information about the Federal Register notice published on July 13, 2011, detailing the FAFSA information that an institution and an applicant may be required to verify for the 2012-2013 award year. This letter also provides a summary of how the verification process will be implemented for the 2012-2013 award year.

Dear Colleague:

On October 29, 2010, the Secretary published final regulations related to program integrity issues in the Federal Register. Those regulations included changes to the verification requirements for applicants for student financial assistance under the Title IV Higher Education Act (HEA), programs. Recognizing that many institutions needed additional time to modify their processing systems and policies to comply with the revised verification requirements in 34 CFR 668.51 through 34 CFR 668.61, the Secretary delayed the effective date of the final verification regulations until the 2012-2013 award year.

The new regulations include a provision that the Secretary publish a Federal Register notice announcing, for each award year, the Free Application for Federal Student Aid (FAFSA) information that an institution and an applicant may be required to verify for an applicant selected for verification, and the acceptable documentation for that information (see 34 CFR 668.56 and 668.57). On July 13, 2011, the Secretary published the required notice in the Federal Register for the 2012-2013 award year.

2012-2013 FAFSA Information to be Verified

The following is a listing, as included in the July 13, 2011 Federal Register notice, of the FAFSA information that may need to be verified for applicants who complete a FAFSA for the 2012-2013 award year. Information is to be verified for the applicant and, if appropriate, his or her parent(s) or spouse.

Information for All Applicants Selected for Verification

  • Number of household members.

    • Verification is not required if the -

      • Applicant is dependent and the applicant’s parent’s marital status is single, separated, divorced, or widowed, and the family size reported on the FAFSA is two.

      • Applicant is dependent and applicant’s parents’ marital status is married, and the family size reported on the FAFSA is three.

      • Applicant is independent and the applicant’s marital status is single, separated, divorced, or widowed, and the family size reported on the FAFSA is one.

      • Applicant is independent and the applicant’s marital status is married, and the family size reported on the FAFSA is two.

  • Number of household members enrolled at least half-time in eligible postsecondary institutions.

    • Verification is not required if the number in college reported on the FAFSA is one.

  • Food Stamps - Supplemental Nutrition Assistance Program (SNAP) - if receipt is indicated on the 2012-2013 FAFSA.

  • Child Support Paid - if reported on the 2012-2013 FAFSA.

  • Information for Tax Filers When Applicant Selected for Verification

    • Adjusted Gross Income (AGI).

    • U.S. income tax paid.

    • Untaxed Income - only the following untaxed income if reported on the 2012-2013 FAFSA -

      • Untaxed IRA distributions.

      • Untaxed pensions.

      • Education credits.

      • IRA deductions.

      • Tax exempt interest.

  • Information for Non-Tax Filers When Applicant Selected for Verification

    • Income earned from work.

    Acceptable Documentation

    As required by the regulations, the July 13, 2011, Federal Register notice includes the acceptable documentation for the FAFSA information that may need to be verified for applicants who complete a FAFSA for the 2012-2013 award year. Institutions should carefully review the Federal Register notice to determine what documentation, including information from the IRS Data Retrieval Process, the Secretary has determined is acceptable to meet the verification requirements of the regulations.

    2012-2013 Verification Selection Process and ISIR Flags

    The Department’s long-term verification goal is to develop a customized FAFSA information selection approach based on information provided by each applicant when the FAFSA was completed. When fully implemented, this process will identify for a selected applicant only the FAFSA information that requires verification based upon that applicant’s data, in contrast to the current process, which requires verification of a single set of items for all applicants selected for verification. However, due to the need for sufficient historical FAFSA data to properly develop the customized verification model, we are not implementing a fully customized verification process for the 2012-2013 award year. Instead, for the 2012-2013 award year, we will implement a variation of the current process, as described below.

    For the 2012-2013 award year, data-based statistical analysis will continue to be used to select for verification those applicants with the highest probability of error on their FAFSA submissions. Student Aid Reports (SARs) and Institutional Student Information Reports (ISIRs) will continue to include only one verification flag to indicate if the applicant has been selected for verification. An applicant whose ISIR is so flagged must verify the FAFSA information included in the July 13, 2011, Federal Register notice and summarized earlier in this letter. Note that, as discussed more fully below, information retrieved using the Internal Revenue Service (IRS) Data Retrieval Process and not subsequently changed, is considered acceptable documentation for IRS-related information.

    IRS Data Retrieval Process

    Applicants selected for verification who retrieve and transfer their income tax return information using the IRS Data Retrieval Process - either when initially completing the FAFSA using FAFSA on the Web (FOTW) or through the corrections process of FOTW - will be considered to have verified the FAFSA IRS information (AGI, taxes paid, and any of the applicable untaxed income items). However, if changes were made to the transferred information or if the institution has reason to believe that the information transferred is inaccurate, the applicant must provide other acceptable documentation as included in the Federal Register notice.

    IRS Tax Return Transcript Required

    Under certain conditions, some applicants who were selected for verification will need to submit to their institution an IRS Tax Return Transcript of 2011 tax year information for the applicant, his or her spouse, and his or her parents, as applicable. These conditions are as follows -

    • When the applicant (or parent) did not use the IRS Data Retrieval Process - either at initial FAFSA filing or though the FOTW correction process.

    • When information included on the FAFSA using the IRS Data Retrieval Process was subsequently changed.

    • When a married independent applicant and spouse filed separate tax returns.

    • When the parents of a dependent student filed separate tax returns.

    • When an applicant or applicant’s parent had a change in marital status after the end of the tax year on December 31, 2011.

    • When the applicant, or parent or spouse, as applicable, filed an amended tax return.

    While encouraged, IRS Tax Return Transcripts submitted to the institution for verification need not be signed by the tax filer.

    See the attachment to this letter for information on the options tax filers may use to request an IRS Tax Return Transcript from the IRS.

    In limited circumstances, if an institution determines that obtaining an IRS Tax Return Transcript is not possible, the institution may accept a signed copy of a 2011 income tax return, but it must document the reason for allowing an applicant to do so. One of those limited circumstances is if the applicant or parent or spouse, as applicable, filed a foreign or Puerto Rican tax form.

    It is important to communicate to applicants that using the IRS Data Retrieval Process, either when initially completing a FAFSA or by using the corrections functionality of FOTW, provides them with the fastest, easiest, and most secure solution for meeting verification requirements.

    With your support, we are confident that the changes to the verification process for the 2012-2013 award year will help to reduce burden on applicants, their families, and on institutions, while also maintaining the integrity of the Title IV federal student aid programs.

    Sincerely,

    David A. Bergeron
    Deputy Assistant Secretary for
    Policy, Planning, and Innovation
    Office of Postsecondary Education

    Attachments/Enclosures:

    GEN-11-13: 2012-2013 Award Year: FAFSA Information to be Verified, and Acceptable Documentation in PDF format, 231KB, 7 Pages

    ATTACHMENT TO GEN-11-13: IRS Tax Return Transcript Request Process in Microsoft Word format, 32KB, 3 Pages

       

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