FALL 2013 DE-DC-MD CONFERENCE
2014-15 VERIFICATION UPDATES
1. Formula Changes
2. FAFSA Changes
3. Verification Changes
4. ISIR Processing Changes
1. Formula Changes –
a. Happy to report there are none!
b. Auto 0 EFC is still at $24,000 or less AGI and must be eligible for simplified formula; independents without dependents other than a spouse are not eligible for this. The ISIR shows if the student qualified – “Auto Zero EFC Indicator”
c. Important to know which formula or Auto Zero EFC to know if ISIR must be returned for correction.
d. 6 Formulas – which formula student qualifies for determines if student/parents must complete the asset sections of the FAFSA or was required to complete but did not.
Dependent / Simplified / RegularIndependent With Dependents Other than a Spouse / Simplified / Regular
Independent Without Dependents Other than a Spouse / Simplified / Regular
e. What does SIMPLIFIED Formula mean? Assets are not included in the calculation of the EFC.
f. For dependent student’s family to qualify:
· Someone counted in the dependent student’s HH size received one of the means tested benefits (SSI; SNAP; Free/Reduced Lunch; TANF, or WIC) OR
· Parents filed or were eligible to file 1040A or EZ or were not required to file OR
· One of the parents is a dislocated worker
AND
· Parents income is $49,999 or less (AGI or total of all W-2 forms)
g. For the independent student to qualify:
· Anyone counted in the student’s HH size received one of the means tested benefits (SSI; SNAP; Free/Reduced Lunch; TANF, or WIC) OR
· Student and Spouse (if applicable) filed or were eligible to file 1040A or EZ or were not required to file OR
· The student is a dislocated worker
AND
· The student’s and spouse’s income is $49,999 or less (AGI or total of all W-2 forms)
h. It is important to know this so that you can make sure the student completed the FAFSA correctly and the correct EFC was calculated. Can determine which formula is used by looking at the ISIR – Field “SNT FLAG”
2. FAFSA Changes – include DRAFT FAFSA in packet – FAFSA Draft from 10.24.13. FAFSA is marked with the changes, too, in case you want to follow along with that.
a. Q. 8 – Q is the same but changed explanation of SSN’s starting with 666.
Notes for question 8 (page 3)
Enter your Social Security Number (SSN). If you are a resident of the Freely Associated States (i.e., the Republic of Palau, the Republic of the Marshall Islands, or the Federated States of Micronesia) and were issued an identification number beginning with “666” when submitting a FAFSA previously, enter that number here. If you are a first-time applicant from the Freely Associated States, enter “666” in the first three boxes of the SSN field and leave the remaining six positions blank and we will create an identification number to be used for federal student aid purposes.
b. Q. 16 – Q is the same but added to the explanation – this is the student’s marital status
Notes for questions 16 and 17 (page 3)
Report your marital status as of the date you sign your FAFSA. If your marital status changes after you sign your FAFSA, check with the financial aid office at the college. Consistent with the Supreme Court decision on the Defense of Marriage Act (DOMA), same-sex couples must report their marital status as married if they were legally married in a state or other jurisdiction (foreign country) that permits same-sex marriage.
c. Q. 34 – New Question – for the student.
34. For 2013, what is or will be your tax filing status according to your tax return?
Single ......
Head of Household…………………………….
Married—filed joint return...... ………
Married—filed separate return...... ……..
Qualifying widow(er)...... …..
Don’t know......
Untaxed Income Information for the student:
d. Q. 45a. – added language to exclude Code DD on W-2 Form. This is listed on most W-2 forms and is the amount the employer pays for the employee health benefits. (Also under parent section.)
e. Q. 45i. – added language to include “untaxed portions of health savings accounts from IRS Form 1040 – Line 25.” (Also under parent section.)
f. Q. 45j – added language to include money provided by the other parent of a dependent student if the parents do not live together and the other parent is providing financial support to the student and that support is not part of a legal child support agreement. (GEN 13-12) Also, added language about 529 Plans:
Money received, or paid on your behalf, also includes distributions to you (the student beneficiary) from a 529 plan that is owned by someone other than you or your parents (such as your grandparents, aunts, and uncles). You must include these distribution amounts in question 45j.
**If parents own plan, count under parent. If student owns plan and is dependent, count under parent. If someone other than this owns the plan and the student received a distribution from the plan, count under the student.**
g. Dependency Questions: New Language added:
1. Q. 51 - Do you now have or will you have children who will receive more than half of their support from you between July 1, 2014 and June 30, 2015?
2. Q. 56 - At any time on or after July 1, 2013, did your high school or school district homeless liaison determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless? See Notes page 9.
3. Q. 57 - At any time on or after July 1, 2013, did the director of an emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless? See Notes page 9.
**The Homeless questions are the most misunderstood questions on FAFSA – the intent is not about the student whose parents kicked them out or do not live at home or live with an aunt or uncle. The homeless condition must be verified by someone in one of the 3 conditions listed above.**
h. Parent Instructions: New language added in instructions and in Q. 59:
Step Four (Parent):
Answer all the questions in Step Four even if you do not live with your legal parents (your biological and/or adoptive parents). Grandparents, foster parents, legal guardians, aunts and uncles are not considered parents on this form unless they have legally adopted you. If your legal parents are married to each other or are not married to each other and live together, answer the questions about both of them. If your parent was never married or is remarried, divorced, separated or widowed, see Notes page 9 for additional instructions.
i. A new option for parents’ marital status:
Unmarried and both parents living together......
1. FAFSA will now require information on LEGAL parents who live together, regardless of marital status or gender.
2. Legal – defined as Biological parents OR Adoptive parents.
3. 2nd key – they must live together.
4. Folks selecting this option will NOT be eligible to do the IRS Data Retrieval process.
5. Before: we collected information on both parents only if they were married and were male/female.
6. Before: income was excluded from one of the legal parents if they were not married but living together.
7. Now: we are going to count both incomes if the legal parents live together even if they are not married.
8. Example: if mother lives with boyfriend who is not the student’s biological father and he has not adopted the student, do not use new option.
9. Example: if biological parents were married, and later divorced, but now live together, use new option.
10. Example: if your mother is married to or is living with her same sex partner and the partner has adopted the student, could use new option – we will likely see new guidance on this to file as married.
11. Example: if your mother is living with her same sex partner and that partner is not the student’s legal parent (adoptive), do not use new optiont.
12. The FAFSA will now call parents Parent 1 and Parent 2 – instead of father/mother.
GEN 13-12: No change in parent reporting unless the parents live together. If they live together, information will be collected from both of a dependent student’s legal parents, without regard to marital status or gender. This will result in income and asset information being used in the EFC calculation. Household size: for dependent students, HH size now includes both the student’s LEGAL parents (biological or adoptive) if the parents live together, again – regardless of marital status or gender.
j. FAFSA Updated Language in directions on who is considered a parent:
Notes for Step Four, questions 59–94 (pages 6 and 7)
Additional instructions about who is considered a parent on this form:
• If your parent was never married or is widowed and does not live with your other legal parent, answer the questions about that parent.
• If your legal parents (biological and/or adoptive) are not married to each other and live together, select “Unmarried and both parents living together” and provide information about both of them regardless of their gender. Do not include any person who is not married to your parent and who is not a legal or biological parent. Contact 1-800-4-FED-AID for assistance in completing questions 80-94. (We will talk about this in a moment.)
• If your parents are married, select “Married or remarried.” Consistent with the Supreme Court decision on the Defense of Marriage Act (DOMA), same-sex couples must report their marital status as married if they were legally married in a state or other jurisdiction (foreign country) that permits same-sex marriage. If your legal parents are divorced but living together, select “Unmarried and both parents living together.”
• If your parents are divorced or separated, answer the questions about the parent you lived with more during the past 12 months. (If you did not live with one parent more than the other, give answers about the parent who provided more financial support during the past 12 months or during the most recent year that you actually received support from a parent.) If this parent is remarried as of today, answer the questions about that parent and your stepparent.
• If your widowed parent is remarried as of today, answer the questions about that parent and
your stepparent.
(the last 2 bullets are not changed from 13-14)
13. The definition of a stepparent is not changing – it is still the opposite sex spouse of a legal parent. Cannot have a stepparent of the same sex as the other parent.
14. ED says the impact of this change will be minimal:
- 60% of FAFSA filers are independent students.
- 20% are dependent student but parents are married.
- We don’t have statistics to evaluate fully, but ED feels there will be few instances where both of the student’s legal parents are living together, but are unmarried or are of the same sex and whose marriage is recognized under State law but not Federal law.
- DOMA – federal law that banned same-sex marriages from being recognized for federal purposes even though they may be under state law – for example, the couples could not file a joint tax return. We know that DOMA was struck down by the Supreme Court this year; ED says there will be forthcoming additional guidance – reported on 10.23.13. This will likely mean that same-sex couples who were married in a state that allows same-sex unions will now have that marriage recognized by the federal government.
15. Impact on Independent Students:
- Under DOMA – On 10.23.13, ED announced a soon to be released Dear Colleague letter that would provide additional guidance – watch IFAP for it. The draft FAFSA directions say to mark the student as “married.” Q16.
k. FAFSA Guidance on this Issue: (I have not seen any FOTW information on this yet.)
If your answer to question 59 was “Unmarried and both parents living together,” contact 1-800-4-FED-AID for assistance with answering questions 80-94.
1. We will need to give guidance to students/parents on how to respond to the tax filing status question; how to calculate AGI and taxes paid, and how to count household size.
3. Verification Changes –
REVIEW:
Customized verification started in 2012-13; we are now into this for 3 years.
- 2012-13 – focus was a more targeted or customized verification based on statistics and metrics for groups of students in certain situations (i.e., students meeting this criteria are prone to errors here – so that is what needs verified).
-
- Were required to verify:
- HH size
-number in college
-SNAP benefits
-child support paid
-for tax filers: AGI, taxes paid, education credits, untaxed income
items (untaxed IRA, untaxed pension, IRA deductions, tax
exempt interest)
-for non-tax filers: income earned from work
For 2013-14: items to be verified were grouped and the student ISIR showed which verification group the student was in, called “Tracking Group.”