NEW VERIFICATION QUESTIONS AND ANSWERS

The Office of Postsecondary Education maintains a website containing Q&As that pertain to the Program Integrity final regulations that were published on October 29, 2010. Six years later, they continue to update the Q&A whenever the U.S. Department of Education’s policy folks respond to interesting questions from schools that they feel needs to be released to the FA community. I’ve consolidated the recent updates for you here:

Q – Must an institution complete verification for a selected applicant who is eligible for both subsidized and unsubsidized Title IV student aid when the applicant chooses not to accept the subsidized aid?

A – An applicant who is eligible for subsidized and unsubsidized Title IV student aid may not avoid completing verification by accepting only the unsubsidized Title IV student aid. In such a case, the institution must complete verification for the applicant to be eligible for any Title IV student aid.

However, except for applicants who are in Verification Tracking Group V4 or V5, an institution may, on a case by case documented basis, disburse unsubsidized Title IV aid to only those applicants who are in Verification Tracking Group V1 or V6 if the institution has determined that there will be a delay in the completion of verification. Also refer to Electronic Announcement dated October 31, 2016.

Q – May an institution disburse unsubsidized Title IV student aid, i.e., Direct Unsubsidized Loans and PLUS Loans, prior to completing verification for a selected applicant who is eligible for both subsidized and unsubsidized Title IV student aid?

A – Except for applicants who are in Verification Tracking Group V4 or V5, an institution may, on a case by case documented basis, disburse unsubsidized Title IV aid to only those applicants who are in Verification Tracking Group V1 or V6 if the institution has determined that there will be a delay in the completion of verification. When determining the amount of the unsubsidized aid to be disbursed, the institution must ensure that the subsidized aid the applicant is estimated to receive is considered. After verification is completed, the institution must ensure that both the subsidized assistance and the unsubsidized assistance are adjusted, if necessary.

Q – For verification of nontax filer wages, are institutions required to collect both the W-2(s) from all employers and the signed statement certifying that the individual has not filed and is not required to file an income tax return, listing all income and sources?

A – Yes. For nontax filers, an institution is required to collect a signed statement certifying that the person is not required to file an income tax return and including the sources and amounts of any income earned from work. In addition, copies of an IRS W-2 form for each source of income earned from work must also be collected. The Department’s suggested verification text will assist an institution in accomplishing this. Institutions that do not use the Department’s suggested verification text must collect the documentation necessary to account for all sources of income.

Beginning with the 2017-2018 award year, nontax filers must also provide confirmation of nonfiling as specified in the applicable annual Federal Register notice. A confirmation of nonfiling can be obtained from the IRS using Form 4506-T and checking box 7. If appropriate, a similar confirmation from another taxing authority (e.g., a U.S. territory or a foreign government) is also acceptable.

Q – Must an institution complete verification for students placed in verification groups V4 or V5 who are only eligible for unsubsidized student financial assistance and not subsidized student financial assistance?

A – An institution should complete verification for a student who is only eligible for unsubsidized student financial assistance who was placed in Verification Tracking Groups V4 or V5. Verifying the student’s high school completion status and identity/statement of educational purpose will help ensure that only eligible students receive aid and improve the integrity of the Title IV, HEA programs.

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