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(GEN-95-19) 1995-96 Verification Changes; Updated Verification Worksheets; Signature Requirement Chart

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.]]

Last Modified: 03/31/1995