FAFSA & Verification Updates TASFAA Spring Conference April - PDF document

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates FAFSA & Verification Updates TASFAA Spring Conference April 25-27, 2016 David Bartnicki U.S. Department of Education 2 College List • Issue: FSA has received requests from public to stop sharing full list of colleges on student’s FAFSA with every school listed. • Resolution: ISIR sent to colleges will only include the Federal School Code and associated housing code for the school to whom the ISIR is sent. • Applicants will continue to receive SARs that list all the Federal School Codes selected on each transaction in order • State grant agencies will continue to receive the full list of the colleges but, beginning with the 2017-2018 FAFSA that listing will be provided in a random order 3 For discussion purposes only 1

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates Guidance For Legal Guardianship • Issue: Applicants sometimes answer the legal guardianship question incorrectly. • Resolution: FAFSA question 55 has been reworded and help text has been modified. 4 Legal Guardianship Messaging 5 Other 2016-17 FAFSA Changes • Income threshold for an Automatic Zero EFC increased to $25,000 • Change tax line references in taxes paid questions • Updated the question to read, “Enter your (and spouse’s) income tax for 2015. Income tax amount is on IRS Form 1040 — line 56 minus line 46; 1040A — line 28 minus line 36; or 1040EZ —line 10.” • Excess Advance Premium Tax Credit Repayment and the Health Care Individual Responsibility line items should not be included as taxes paid for Title IV purposes • Reorder text in FAFSA questions 26, 28, 29, and 30 6 For discussion purposes only 2

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates 2017-2018 7 Paper FAFSAs  More than 99 percent of FAFSAs are filed electronically.  Beginning with the 2017-2018 FAFSA we will no longer print the FAFSA as a color packet.  PDF FAFSA available on-line to be printed  Call 1-800-4FEDAID to request a copy 8 2017-2018 Application • 2017-2018 Processing Announcements – Beginning with 2017-2018, the FAFSA cycle will begin October 1 instead of January 1 • 2017-2018 FAFSA filing will begin October 1, 2016 • Gives more time to review, submit & update FAFSA data – Beginning with 2017-2018, FAFSA income information will come from the “prior, prior year” • 2017-2018 FAFSA will collect tax year 2015 income information – Added an applicant’s receipt of Medicaid as a qualification for the Simplified Needs Test (SNT) 9 For discussion purposes only 3

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates FAFSA CHANGES FOR 2017-18 Questions? Early FAFSA/Prior-Prior Year: Issues We’ve heard your concerns about…. • Outreach – Early FAFSA Webpage (right-hand side of IFAP) • http://ifap.ed.gov/EarlyFAFSA/indexV1.html • Periodic EAs, DCLs, training, Resources on IFAP • Q & As recently added – Student websites, publications, communications will be updated appropriately and as timely as possible – "Early FAFSA" mailbox for the community to contribute thoughts, ideas, and concerns on the implementation of the 2017-2018 Early FAFSA • "Early FAFSA" mailbox - EarlyFAFSAFeedback@ed.gov 11 Early FAFSA/Prior-Prior Year: Issues We’ve heard your concerns about…. • Professional Judgement (GEN-16-03) • Reminded schools of their ability to use PJ and encourages schools to use PJ when appropriate (and properly document) • ED acknowledges likely increase in use of PJ • ED will modify risk-based compliance models to account for PJ increase • Reminded schools to set Professional Judgment Flag to 1 (EFC Adjustment Processed) to indicate that the CPS submission was the result of a PJ determination 12 For discussion purposes only 4

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates Early FAFSA/Prior-Prior Year: Issues We’ve heard your concerns about…. • Verification • May be some changes but overall process will be the same • In most cases financial data processed by IRS • Conflicting information (16/17 vs. 17/18 data) • ED working to determine how to handle conflicting information during transitional year (e.g. 2015 financial data) • 2/18/16 EA encourages use of IRS DRT in 16/17 and 17/18 to reduce likelihood of conflicting information • Further conflicting information guidance with be shared though IFAP in the near future 13 Early FAFSA/Prior-Prior Year: Q & As G-Q8: Will institutions have to review all of their students 2016-17 and 2017-2018 ISIRs to determine if there might be conflicting information since supposed to be completed using same 2015 income and tax information? G- A8: No….the Department has developed a process where CPS will review a 2016-2017 FAFSA if filed for a 17-18 applicant. CPS will flag only those 2017-2018 ISIRs where any potential conflict, could have a significant impact on the student’s 2017 - 2018 EFC… …The most effective ways to prevent conflicting information from occurring is for the FAFSA applicant to use the IRS Data Retrieval Tool (IRS DRT) when completing both their 2016-2017 and 2017- 2018 FAFSAs. [April 12, 2016] 14 Early FAFSA/Prior-Prior Year: Items Electronic Announcement #4 - March 18, 2016 • Outlines income related items on FAFSA that will be based on 2015 data (prior-prior year) • Tax filing status, tax return status, type of return, return eligibility, AGI, taxes paid, exemptions, income earned from work, income exclusions, untaxed income • FAFSA items current at time FAFSA completed or for current award year (Not prior-prior year data) • Dislocated worker, household size, number in college, assets, certain means-tested benefits 15 For discussion purposes only 5

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates Prior-Prior Year – What ISN’T changing… • When Pell amounts are finalized/announced • When Pell charts are released Sec. 482 of the HEA • When Pell origination/disbursement records can be sent to COD • When Pell funds will be available in G5 • When award letters may be sent to students 16 17 2016-17 Verification – Overview • Same data elements as for 2015-2016 award year • Some modifications and clarifications to acceptable documentation • Eliminated Child Support Paid (V3) as a separate verification group • In limited circumstances, an applicant’s Verification Tracking Group could change 7 For discussion purposes only 6

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates 2016-17 Verification - Changes Verification Tracking Group changes: • Verification Tracking Group V3 (Child Support Paid) has been removed • Applicants placed in V1, V4, V5, and V6 must still verify child support paid if reported on ISIR 19 2016-17 Verification - Changes Verification Tracking Group changes: • Applicants may be moved from previously assigned Groups V1, V4, and V6 to Verification Tracking Group V5 – Applicant is only required to verify the additional items in V5 that were not previously verified – If the applicant is moved to Verification Tracking Group V5, no additional disbursements of any Title IV aid may be made until verification is satisfactorily completed 20 2016-17 Verification - Changes Verification Tracking Group changes: • Applicants moved to Verification Tracking Group V5 – If Title IV aid had been disbursed prior to receiving an ISIR with the new V5, and the applicant does not complete verification, the applicant is liable for the full amount of TIV aid disbursed for 2016-2017 – The institution is not liable • Except school must return any Title IV funds as required in any R2T4 calculations 21 For discussion purposes only 7

TASFAA Spring Conference April 25-27, 2016 FAFSA & Verification Updates 2016-17 Verification - Changes Applicants moved to Verification Tracking Group V5 • Verification can be set on the application or correction • Verification Selection Change Flag • Y: indicates verification was not set and now record is selected for verification • C: indicates the verification tracking group has changed – This “C” is transaction specific 22 2016-17 Verification Income Information for Non-IRS Tax Filers • Tax filers who filed an income tax return with a taxing authority in a U.S. territory (Guam, American Samoa, the U.S. Virgin Islands) or commonwealth (Puerto Rico and the Northern Mariana Islands) or with a foreign central government , must submit a copy of a transcript of their tax information – A signed copy of the applicable 2015 income tax return that was filed with the taxing authority is only acceptable if tax filers are unable to obtain a free copy of a transcript of their tax information 23 2016-17 Verification Income Information for Non-IRS Nontax Filers • Residents of the Freely Associated States (Republic of the Marshall Islands, the Republic of Palau, the Federated States of Micronesia), and a U.S. territory or commonwealth or a foreign central government who are not required to file an income tax return under that taxing authority’s rules must submit: – a copy of their Wage and Tax Statement (or equivalent documentation) for each source of employment income and – a signed statement identifying all of the individual’s income and taxes 24 For discussion purposes only 8