2020-2021 Application and Verification Guide

Application and Verification Guide

2020¨C2021

Introduction.................................................................................................. 1

CHANGES FOR 2020¨C2021............................................................................................................................... 1

Chapter 1: The Application Process: FAFSA to ISIR............................... 3

TYPES OF APPLICATIONS................................................................................................................................ 3

FAFSA online, myStudentAid mobile app featuring myFAFSA, FAA Access to CPS Online,

Paper (PDF) FAFSA, FAFSA on the phone, FSA ID, Renewal FAFSA, FAFSA filers under the age of 13

PROCESSING THE FAFSA.................................................................................................................................. 5

OUTPUT DOCUMENTS: THE SAR AND ISIR.................................................................................................. 6

DEADLINES.......................................................................................................................................................... 7

Websites for students, Resources for schools

Chapter 2: Filling Out the FAFSA.............................................................. 9

STEP ONE: GENERAL STUDENT INFORMATION.......................................................................................... 9

Questions 1¨C31, IRS Data Retrieval Tool, Definitions, No income reported on the FAFSA,

Married filing separately, EFA or not?

STEPS TWO AND FOUR: INCOME AND ASSETS........................................................................................ 16

Questions 32¨C44 (and questions 79¨C94 for parents), Qualified education benefits,

Reporting ¡°take-back¡± mortgages, Reporting trust funds, Ownership of an asset

STEP THREE: DEPENDENCY STATUS............................................................................................................ 27

Questions 45¨C57, Who does and does not count as a parent on the FAFSA?, Other sources of support

for children and other household members, Veteran match, Documentation of foster youth

STEP FOUR: PARENTS¡¯ INFORMATION (DEPENDENT STUDENTS ONLY)............................................. 34

Questions 58¨C78, 83 (see Step Two for discussion of questions 79¨C82, 84¨C92); Reporting information

in cases of death, separation, divorce, and remarriage

STEP FIVE: INDEPENDENT STUDENT DATA............................................................................................... 39

Questions 93¨C100

STEP SIX: SCHOOL INFORMATION............................................................................................................... 40

Questions 101

STEP SEVEN: SIGNATURE(S).......................................................................................................................... 40

Questions 102¨C106, Signatures for electronic applications, Signature requirements chart

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Chapter 3: Expected Family Contribution (EFC).................................. 45

GENERAL INFORMATION............................................................................................................................... 45

SIMPLIFIED FORMULA.................................................................................................................................... 45

AUTOMATIC ZERO EFC...................................................................................................................................46

DEPARTMENT OF DEFENSE MATCH AND IRAQ AND AFGHANISTAN SERVICE GRANT................... 47

ALTERNATE EFCS.............................................................................................................................................. 47

THE EFC WORKSHEETS...................................................................................................................................47

Negative AGI or zero?

FORMULA A¡ªDEPENDENT STUDENTS...................................................................................................... 48

Parents¡¯ contribution, Student¡¯s contribution from income, Student¡¯s contribution

from assets, Alternate EFCs for other than nine-month enrollment

FORMULA B¡ªINDEPENDENT STUDENT WITHOUT DEPENDENTS

OTHER THAN A SPOUSE ................................................................................................................................ 51

Contribution from available income, Contribution from assets, Alternate EFCs for other

than nine-month enrollment

FORMULA C¡ªINDEPENDENT STUDENT WITH DEPENDENTS

OTHER THAN A SPOUSE ................................................................................................................................ 53

Available income, Contribution from assets, Calculation of student¡¯s EFC, Alternate EFCs

for other than nine-month enrollment

EFC WORKSHEETS........................................................................................................................................... 57

Formula A, Formula B, Formula C

Chapter 4: Verification, Updates, and Corrections................................ 85

REQUIRED POLICIES AND PROCEDURES................................................................................................... 85

Verification selection and PJ

APPLICATIONS AND INFORMATION TO BE VERIFIED.............................................................................. 86

School-selected verification, Verification tracking groups, Changing tracking groups,

Reporting results for groups V4 and V5, Verification exclusions, Verification following disasters,

HEROES Act modifications

DOCUMENTATION........................................................................................................................................... 91

Documenting AGI, taxes paid, and other tax data with the DRT; Using the tax transcript;

Using a joint return to figure individual AGI and taxes paid; Rollovers and verification;

Using the tax return; If a W-2 is not available; Immigrants and tax filing; Special situations;

Household size; Number in college; High school completion; ATB alternatives for

high school completion; Identity and statement of educational purpose

INTERIM DISBURSEMENTS..........................................................................................................................103

Overpayments from interim disbursements, Schools that can¡¯t make interim disbursements

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UPDATING INFORMATION...........................................................................................................................104

Parent remarriage after applying

CORRECTING ERRORS...................................................................................................................................104

CHANGES IN A SELECTED APPLICANT¡¯S FAFSA.....................................................................................105

Campus-based and DL changes, Pell changes, Selection after disbursement,

Disbursing unsubsidized aid, After documentation is complete

HOW TO SUBMIT CORRECTIONS AND UPDATES...................................................................................106

Using the online FAFSA, Submitting changes via FAA Access to CPS Online or EDE,

Using the SAR to make corrections, Adding schools and changing a student¡¯s address,

Corrections by phone limited to processor errors, Signatures

DEADLINES AND FAILURE TO SUBMIT DOCUMENTATION..................................................................108

Campus-Based and DL, Pell Grants, Other considerations, Late disbursements,

Verification status codes

SUGGESTED VERIFICATION TEXT...............................................................................................................110

2020¨C2021 Suggested verification text

Chapter 5: Special Cases.......................................................................... 125

PROFESSIONAL JUDGMENT........................................................................................................................125

Entire text of the HEA section on PJ, Students without parent support,

Refusing or reducing a loan

DEPENDENCY OVERRIDES...........................................................................................................................129

Unable to provide parent data, Overrides and professional judgment

CONFLICTING INFORMATION.....................................................................................................................131

Subsequent ISIRs, Discrepant tax data, Marital and tax filing status,

Resolution of conflicting information

REFERRAL OF FRAUD CASES.......................................................................................................................132

Office of Inspector General address and phone numbers, FSA Feedback Center

UNACCOMPANIED HOMELESS YOUTH.....................................................................................................133

Homeless youth definitions, Confirmation not required

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Introduction

C i

This guide is intended for college financial aid administrators and

counselors who help students begin the aid process¡ªfiling the Free

Application for Federal Student Aid (FAFSA?) form, verifying information, and making corrections and other changes to the information reported on the FAFSA.

T

hroughout the Federal Student Aid Handbook we use ¡°college,¡± ¡°school,¡±

and ¡°institution¡± interchangeably unless a more specific use is given.

Similarly, ¡°student,¡± ¡°applicant,¡± and ¡°aid recipient¡± are synonyms. ¡°Parents¡±

in this volume refers to the parents of dependent students, and ¡°you¡± refers

to the primary audience of the Handbook: financial aid administrators at

colleges. ¡°We¡± indicates the U.S. Department of Education (the Department,

ED), and ¡°federal student aid¡± and ¡°Title IV aid¡± are synonymous terms for

the financial aid offered by the Department.

We appreciate any comments that you have on the Application and

Verification Guide, as well as all the volumes of the FSA Handbook. We

revise the text based on questions and feedback from the financial aid community, so please write us at fsaschoolspubs@ about how to improve

the Handbook so that it is always clear and informative.

CHANGES FOR 2020¨C2021

Throughout the volume, we moved notes in the margins to the body of

the page, and we updated the text to account for the elimination of IRS forms

1040A and 1040EZ and the changes to the 1040 form.

On the bottom of page 8 we noted that in February 2020 the FSAdownload site was retired and the entire IFAP website was modified, which may

require schools to update links they have on their own sites.

On pages 18 and 19 we added a section explaining what to do when,

in some foreign countries and in the employment of some international

organizations, people do not have to file a tax return even though they earn

incomes that under normal circumstances in the U.S. would require a return

to be filed.

We added a sentence on page 21 stating that ABLE (Achieving a Better

Life Experience) accounts are not included as an asset on the FAFSA.

FSA HB May 2020

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