DCLPublicationDate: 4/1/95 DCLID: GEN-95-19 AwardYear: Summary: 1995-96 Verification Changes; Updated Verification Worksheets; Signature Requirement Chart April 1995 GEN-95-19 SUBJECT: 1995-96 Verification Changes Updated Verification Worksheets Signature Requirement Chart REFERENCES: Chapter 2 of the 1995-96 Federal Student Financial Aid Handbook; Student Assistance General Provisions Regulations, 34 CFR Part 668. Dear Colleague: Changes to the Student Assistance General Provisions regulations published in the Federal Register on November 29, 1994, simplified the verification process and reduced signature requirements for title IV student aid applicants. The purpose of this letter is to provide you with information that may help you in implementing the new provisions, thereby enhancing the opportunity for you and your students to benefit from the revised requirements. In addition, we are enclosing copies of the 1995-96 Verification Worksheets and a Signature Requirement chart. Effective Date Since the new simplified verification regulations are effective for award years beginning on or after July 1, 1995, they should be used for any application selected for verification for the 1995-96 award year, even if the application is processed before July 1, 1995. Unsubsidized Aid Applications for participation in the title IV unsubsidized Stafford or PLUS loan programs are not subject to the verification regulations. Consequently, an applicant with an expected family contribution (EFC) that is too high to qualify the applicant for any subsidized title IV assistance at the institution he or she is attending is not required to complete the verification process. 30 Percent Limitation Reappears - §668.54 Because of a change in law, for the 1994-95 award year, institutions are required to verify 100 percent of all applications selected for verification by the Secretary's edits, if those applications were processed on or after July 1, 1994 (see Dear Colleague Letter GEN 94-41). Beginning with the 1995-96 award year, institutions must verify all selected applicants, except that no institution will be required to verify more than 30 percent of its total Federal student aid applicant pool in any award year. Applications not selected for verification by the Secretary's edits, but verified by the institution, cannot be included as verified for the purpose of determining when the institution has met its 30% verification requirement. Institutionally Selected Applications If an institution selects applicants for verification not selected by the Secretary, the institution may verify any data element(s) it chooses and may use the tolerance options provided under §668.59. Updating Change - §668.55 Beginning with the 1995-96 award year, Title IV applicants are no longer required to sign updating statements at the time they submit SARs or other documents to their school. Please note that this change does not impact the provision requiring applicants to update application information if there is a change in household size, a change in the number of household members attending postsecondary educational institutions, or a change in dependency status, unless those changes result from a change in the applicant's marital status. Also, please note that it is the applicant's responsibility, and not the institution's, to update the above information. Social Security Benefits - §668.57 Institutions are not required to verify or document receipt of Social Security benefits simply because there is an amount indicated on the application. Documentation is only required if the institution has reason to believe that benefits were received and were not reported, or that the applicant has incorrectly reported the amount of Social Security benefits. Signature Requirement Change - §668.57 Beginning with the 1995-96 processing year, verification documents, other than copies of tax returns, require the signature of the applicant and at least one parent who completed the Free Application for Federal Student Aid (FAFSA) of a dependent student, without regard to which parent's income was used in calculating the applicant's EFC. If an independent student is married, both applicant and spouse must sign any document necessary to verify the number of family members in the household and the number of family household members enrolled in postsecondary institutions. Adjusted gross income, income earned from work, and U.S. taxes paid will continue to be verified using a copy of a tax return signed by at least one of the filers of a joint return, by the preparer of the return, or stamped with the name and address of the preparer of the return. Faxed or photocopied signatures on verification documents are acceptable assuming that they are legible. The current verification regulations do not require original signatures on documents used to verify application information. Please refer to Chapter Two, Required Verification Items and Acceptable Documentation, in The Verification Guide. Tolerance Change - §668.59 The separate $200 Federal Pell Grant and $800 Stafford Loan and campus-based verification tolerances have been eliminated for the 1995-96 award year. Instead, one $400 tolerance will be used for verification for all title IV programs. This $400 tolerance is a net tolerance. The tolerance amount is the difference between the corrected sum of AGI plus untaxed income minus U.S. taxes paid and the uncorrected sum of AGI plus untaxed income minus U.S. income taxes paid. If the net difference is greater than $400, then the applicant's EFC must be recalculated. The example below will further clarify the use of the $400 tolerance option: Example: A student's $2500 AGI is corrected to read $3000, and the student's $300 entry for U.S. income taxes paid is corrected to read $400. The student's untaxed income remains the same in both calculations at $300. Therefore, the student's corrected sum of AGI plus untaxed income minus U.S. income taxes paid is $2900, and the student's uncorrected sum using the same calculation is $2500, leaving a net difference of $400, which is within the allowable tolerance. In this example, recalculation of the EFC is not required and a Verification Status Code "T" can be used when Federal Pell Grant payment information is reported to the Department. Of course, institutions may recalculate an applicant's EFC instead of using the verification tolerance if they so choose. 1995-96 Verification Worksheets The 1995-96 Verification Worksheets for dependent and independent students have been enclosed for your convenience. Signature Requirements A Signature Requirement Chart for use beginning with the 1995-96 delivery system process is enclosed. For further information concerning the material listed above, please contact Lorraine Kennedy of my staff on (202) 708-7888. Sincerely, William L. Moran Director Student Financial Assistance Program Enclosures [[ The Enclosures "Signature Requirements for the 1995-96 Delivery System", Independent Student 1995-96 Verification Worksheet" and "Dependent Student 1995-96 Verification Worksheet" are currently unavailable for viewing. Please reference your paper document for additional information.]] |