72
Application and Verification Guide Introduction This guide is intended for college financial aid administrators and counselors who help students begin the aid process— filing the Free Application for Federal Student Aid (FAFSA ® ) form, verifying information, and making corrections and other changes to the information reported on the FAFSA. Throughout 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 (AVG), 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 reach out to us about how to improve the Handbook through the “Contact Customer Support ” feature in our Partner Connect’s Help Center clicking on “FSA Handbook” under the Topic section. Changes for 2022-2023 Throughout the AVG, all dates, pertinent tax return and schedule information, along with various resources and references have been updated to support the requirements associated with the 2022-2023 processing year and the 2020 base tax year. Also, where appropriate, links and publications associated with FSA’s new Partner Connect and Knowledge Center have been properly updated. We added information in Chapter 2 under the “Step One: General Student Information” section highlighting the FAFSA Simplification Act elimination of the Selective Service and drug-related conviction student eligibility requirements which started in the 2021–2022 award year. In Chapter 2, under “Assets” in the “Step Two and Four: Income and Asset” section, we provided information indicating that Bitcoins (virtual currency) are treated as an asset on the FAFSA form. In Chapter 3, we added a new section entitled “Children of Fallen Heroes Scholarship Act” briefly describing the EFC impact associated with Pell-eligible students who qualify for this benefit. We removed text from the beginning of Chapter 4 referring to the verification waivers afforded students and schools in the 2021-2022 award year as outlined in GEN-21-05 . If additional verification waivers are established specifically for the 2022-2023 award year due to the on-going COVID-19 pandemic, we will update the AVG accordingly. Throughout Chapter 4 we removed all references to high school completion status under V4 and V5 since it was removed as a verifiable item in the September 1, 2021, Federal Register notice . Under the “Reporting results for groups V4 and V5” section in Chapter 4, we updated the numeric codes to account for the removal of the high school completion status requirement under V4 and V5 as outlined in the September 1, 2021 electronic announcement . Under the “Professional Judgement” section in Chapter 5, we added a reference to GEN-21-02 reminding institutions of their ability to perform PJs during the current COVID-19 pandemic.

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Page 1: Application and Verification Guide

ApplicationandVerificationGuide

Introduction

Thisguideisintendedforcollegefinancialaidadministratorsandcounselorswhohelpstudentsbegintheaidprocess—

filingtheFreeApplicationforFederalStudentAid(FAFSA®)form,verifyinginformation,andmakingcorrectionsandother

changestotheinformationreportedontheFAFSA.

ThroughouttheFederalStudentAidHandbookweuse“college,”“school,”and“institution”interchangeablyunlessa

morespecificuseisgiven.Similarly,“student,”“applicant,”and“aidrecipient”aresynonyms.“Parents”inthisvolume

referstotheparentsofdependentstudents,and“you”referstotheprimaryaudienceoftheHandbook:financialaid

administratorsatcolleges.“We”indicatestheU.S.DepartmentofEducation(theDepartment,ED),and“federalstudent

aid”and“TitleIVaid”aresynonymoustermsforthefinancialaidofferedbytheDepartment.

WeappreciateanycommentsthatyouhaveontheApplicationandVerificationGuide(AVG),aswellasallthevolumesof

theFSAHandbook.Werevisethetextbasedonquestionsandfeedbackfromthefinancialaidcommunity,soplease

reachouttousabouthowtoimprovetheHandbookthroughthe“ContactCustomerSupport”featureinourPartner

Connect’sHelpCenterclickingon“FSAHandbook”undertheTopicsection.

Changesfor2022-2023

ThroughouttheAVG,alldates,pertinenttaxreturnandscheduleinformation,alongwithvariousresourcesandreferences

havebeenupdatedtosupporttherequirementsassociatedwiththe2022-2023processingyearandthe2020basetax

year.Also,whereappropriate,linksandpublicationsassociatedwithFSA’snewPartnerConnectandKnowledgeCenter

havebeenproperlyupdated.

WeaddedinformationinChapter2underthe“StepOne:GeneralStudentInformation”sectionhighlightingtheFAFSA

SimplificationActeliminationoftheSelectiveServiceanddrug-relatedconvictionstudenteligibilityrequirementswhich

startedinthe2021–2022awardyear.

InChapter2,under“Assets”inthe“StepTwoandFour:IncomeandAsset”section,weprovidedinformationindicating

thatBitcoins(virtualcurrency)aretreatedasanassetontheFAFSAform.

InChapter3,weaddedanewsectionentitled“ChildrenofFallenHeroesScholarshipAct”brieflydescribingtheEFC

impactassociatedwithPell-eligiblestudentswhoqualifyforthisbenefit.

WeremovedtextfromthebeginningofChapter4referringtotheverificationwaiversaffordedstudentsandschoolsin

the2021-2022awardyearasoutlinedinGEN-21-05.Ifadditionalverificationwaiversareestablishedspecificallyforthe

2022-2023awardyearduetotheon-goingCOVID-19pandemic,wewillupdatetheAVGaccordingly.

ThroughoutChapter4weremovedallreferencestohighschoolcompletionstatusunderV4andV5sinceitwasremoved

asaverifiableitemintheSeptember1,2021,FederalRegisternotice.

Underthe“ReportingresultsforgroupsV4andV5”sectioninChapter4,weupdatedthenumericcodestoaccountfor

theremovalofthehighschoolcompletionstatusrequirementunderV4andV5asoutlinedintheSeptember1,2021

electronicannouncement.

Underthe“ProfessionalJudgement”sectioninChapter5,weaddedareferencetoGEN-21-02remindinginstitutionsof

theirabilitytoperformPJsduringthecurrentCOVID-19pandemic.

https://fsapartners.ed.gov/help-center/contact-customer-support
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-07-13/changes-2021-2022-verification-requirements
https://fsapartners.ed.gov/knowledge-center/library/federal-registers/2021-09-01/verification-2022-2023-award-year-fafsa-information
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-09-01/implementation-high-school-completion-status-removal-verification-ea-id-verif-21-02
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-01-29/update-use-professional-judgment-financial-aid-administrators-updated-aug-16-2021
Page 2: Application and Verification Guide

Chapter1

TheApplicationProcess:FAFSAtoISIR

ThelawsgoverningtheFederalStudentAid(FSA)programsrequirethatapersonapplyforaidwithaformprovidedby

theU.S.DepartmentofEducation(ED)andthatnofeebechargedforprocessingit.ThisistheFreeApplicationfor

FederalStudentAid(FAFSA®)form.

Tobeconsideredforfederalstudentaid,astudentmustcompleteaFAFSAform.Itcollectsfinancialandotherinformation

usedtocalculatetheexpectedfamilycontribution(EFC)andtodetermineastudent’seligibilitythroughcomputer

matcheswithotheragencies.

TheFAFSAformistheonlyformstudentsmustfillouttoapplyforTitleIVaid.Aschoolcannotrequireextrainformation

fromstudentsexceptforverificationorresolutionofconflictinginformation.However,aschoolmayrequireadditional

informationforotherpurposes,suchaspackagingprivateorinstitutionalaid.Iftheschoolcollectsadditionalinformation

thataffectsTitleIVeligibility,itmusttaketheinformationintoaccountwhenawardingTitleIVaid.

TypesofApplications

MostFAFSAformsarefiledelectronically,butthereareotheroptions.

FAFSAonline

Students,parents,andpreparerscancompleteanapplicationonlineandsenditdirectlytotheCentralProcessingSystem

(CPS).TheycanalsocorrectpreviouslysubmitteddatathatwasnotimportedfromtheIRS.Helpisavailableforstudents

onlineorbycallingtheFederalStudentAidInformationCenter(FSAIC)at1-800-4-FED-AID(1-800-433-3243).Tomake

usingtheWebapplicationeasier,EDproducestheFAFSAontheWebworksheet,whichcanbeprintedfromthe

StudentAid.govwebsite.

myStudentAidmobileappfeaturingmyFAFSA

AnotherwaytoapplyisthroughtheFAFSAfeatureofthemyStudentAidappformobiledevices.Students,parents,and

preparersmayuseittobegin,complete,and/orsubmitaneworrenewalFAFSA.ThemyStudentAidappisavailableon

theAppStore(iOS)oronGooglePlay(Android).HelpisavailableintheapporbycallingFSAIC.

FAAAccesstoCPSOnline

Youcansubmitastudent’sapplicationdataatFAAAccesstoCPSOnline.Youcanalsoconnecttothesitethrough

EDExpress.

Beforesubmittingthedata,printthesignaturepage/FAFSAsummaryforthestudent(andparentifappropriate)tosign,or

havethestudentfilloutandsignapaperFAFSAform.AsnotedattheendofChapter2,youwillneedtoretaineitherthe

signedsignaturepage/summaryorsignedFAFSAformforyourrecords,evenifthestudentdoesn’treceiveaidorattend

yourschool.

Paper(PDF)FAFSAForm

Morethan99%ofapplicationsarefiledelectronically,sotheonlypaperoptionisthePDFFAFSAform,whichstudentscan

getatstudentaid.gov.TheycanprintthePDFandfillitoutbyhand,ortheycantypetheirdataonthePDFbeforeprinting

andmailingit.Ifneeded,theycanrequestsinglecopiesfromFSAICbycalling1-800-433-3243.

OtherthantheselimitedpaperFAFSAformoptions,FSAnolongerprintsormailsaid-relatedpublications,thoughtheyare

availableonlineforuserstodownloadandprint.Formoreinformationonelectronicversionsofpublications,factsheets,

onlinetools,andotherresources,pleasegotoFinancialAidToolkit.ed.gov/resourcesand/orStudentAid.gov/resources.

ApplyingelectronicallyisbetterthanusingthepaperFAFSAformbecauseofthefollowingadvantages:fasterprocessing;

https://studentaid.gov/h/apply-for-aid/fafsa
https://studentaid.ed.gov/sa/help/fafsa-worksheet
https://apps.apple.com/us/app/mystudentaid/id1414539145
https://play.google.com/store/apps/details?id=com.fsa.mystudentaid
https://faaaccess.ed.gov/FOTWWebApp/faa/faa.jsp
https://edit.fsapartners.ed.gov/knowledge-center/library/resource-type/EDExpress
https://financialaidtoolkit.ed.gov/tk/resources.jsp
https://studentaid.gov/resources
Page 3: Application and Verification Guide

theavailabilityofonlinehelp;skiplogic,whichallowsapplicantstoskipoverquestionsthatdon’tpertaintothem;and

fewererrorsandrejectedapplicationsbecauseinternalandend-of-entrydataeditsensurethatrequiredfieldsare

completedandconflictsareresolvedpriortosubmission.

FAFSAonthephone

StudentswhohavelimitedornoInternetaccessandfacepressingdeadlinescanchoosetocompleteandsubmittheir

applicationbycalling1-800-433-3243,tellingarepresentativetheywouldliketofillouttheirFAFSAformoverthephone

andprovidingtheirinformation.Thistypicallytakesabouthalfanhour.Studentswillreceiveapaperstudentaidreport

(SAR)7–10dayslater,whichthey(andtheirparents,ifappropriate)mustsignandreturn.Becausethisisnotthe

preferredmethodtoapplyforaid,itshouldbeusedsparinglyandonlybythosestudentsidentifiedpreviously.

FSAID

StudentsusetheFSAIDtologontotheFAFSAonlineandotherFSAwebsiteswithausernameandpasswordtheycreate.

AnFSAIDisalsoneededforstudents,parents,andpreparerstousetheFAFSAfeatureofthemyStudentAidmobileapp.

ParentsandstudentscanelectronicallysigntheFAFSAformbutmustdosowiththeirownFSAID.Averifiedemail

addressorcellphonenumbercanbeusedinsteadoftheusername.UserscancreateanFSAIDonlinequicklyand

securely.

RenewalFAFSA

AstudentwhohasreceivedanFSAIDandwhotheyearbeforehadanISIRwithasuccessfulmatchonSocialSecurity

number(SSN),name,anddateofbirthwiththeSocialSecurityAdministration(SSA)iseligibleforarenewalFAFSAform.

WhenthestudentlogsintotheelectronicFAFSAform,heorshewillbeaskedifheorshewantstopre-fillsomeofthe

applicationwithdatafromtheprioryear.Bychoosingthisoption,thestudentcanrevieweachpre-filleditem,updateitif

ithaschanged,andprovidenewinformationasneeded.Ifanaidadministrator’sschooldoesnotappearontherenewal

application,heorshecanusethestudent’sdatareleasenumber(DRN)toaccesstheapplicationinFAAAccesstoCPS

Online.

InOctober–November2021,studentswithavalidemailaddressintheCPSwhosubmittedFAFSAinformationforthe

2021-2022awardyearandhavenotyetdonesofor2022–2023willreceiveanemailencouragingthemtocompletethe

newapplicationearly.Inaddition,inJanuary-February2022,renewal-eligiblestudentswhostillhavenotsubmitted2022–

2023FAFSAinformationwillreceivearenewalreminderasinpreviousyears.

BecausestudentsfromPalau,theMarshallIslands,andMicronesia,knowncollectivelyastheFreelyAssociatedStates,are

noteligibleforanFSAID(forlackofanSSN),theycannotpre-filldataintheonlineFAFSAform.ButanFAAcanuseFAA

AccesstoCPSOnlinetoenterrenewalapplicationsforthesestudentsiftheymeettherenewalapplicationeligibility

requirements.

FAFSAfilersundertheageof13

BecausetheChildren’sOnlinePrivacyProtectionAct(COPPA)of1998prohibitsanyentity,includingagovernment

agency,fromelectronicallyconductingbusinessorcommunicatingwithapersonunderage13,applicantswhoare12or

youngercannotcompletetheFAFSAonline.Instead,whentheyapplyforfinancialaid,theyoraparentorlegalguardian,

financialaidadministrator,orhighschoolcounselorcanfillouttheappropriateawardyearPDFFAFSAandmailitto

FederalStudentAidPrograms

Attn:COPPA/CORRProcessBuilding1

1084SouthLaurelRoad

London,KY40744

Suchapplicantsarenottoprovideanemailaddressontheapplicationorwithanycorrectionthatmightfollow.Afterthe

FAFSAformissubmitted,itwillbeprocessedandapaperSARwillbesenttothestudentandaregularISIRwillbesentto

schools.SeetheAugust4,2016,announcementformoreinformation.

ProcessingtheFAFSA

https://studentaid.gov/fsa-id/create-account/launch
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2016-08-04/application-processing-subject-revised-special-handling-process-fafsar-filers-under-age-13
Page 4: Application and Verification Guide

ThePDFFAFSAformsgototheFAFSAprocessorfordataentryandthentotheCPS.Applicationsthataresignedand

submittedonlinegodirectlytotheCPS.Ifawebapplicantindicatedheorshewouldsignelectronicallylaterorsenda

papersignaturepage,hisorherFAFSAinformationgoestoasignatureholdfileforupto14days.Ifsometypeof

signatureisnotreceivedinthattime,theapplicationwillbesenttotheCPSbutwillberejected;itwon’tbeprocessed

againuntilasignatureisreceived.

TheCPSusesapplicationdatatocalculatetheEFCandtomatchagainstseveraldatabases:NSLDS,theDepartmentof

Defense,theDepartmentofJustice,theSSA,andtheDepartmentofVeteransAffairs,aswellastheDepartmentof

HomelandSecurity’sdatabaseofnoncitizensandtheSelectiveServiceSystem(SSS)registrationdatabase.(Notethatas

DCLGEN-21-04explains,2022–2023isthelastyearthattheSelectiveServicequestionshouldappearontheFAFSAform,

andfailuretoregisterwiththeSelectiveServicedoesnotaffectastudent’seligibilityforTitleIVaid.)

TheCPSalsocheckstheapplicationforpossibleinconsistenciesandmistakes.Forinstance,ifadependentstudent

reportedtheparents’maritalstatusasmarriedbutreportedthehouseholdsizeas“2,”theeditcheckswouldcatchthe

inconsistency.Evenwhendataisinconsistent,theCPSmaybeabletocalculateanEFCbasedonassumptions.For

applicationsthatyourschoolsubmitsthroughFAAAccess,youcananticipatecertainassumptionsandcorrectoroverride

informationonthestudent’sFAFSAformsubmission.Studentswhosubmitapplicationsonlinecanalsocorrectoroverride

someoftheCPSeditsbeforesubmittingtheapplication.

OutputDocuments:TheSARandISIR

Afterprocessingiscomplete,theCPSproducesoutputdocumentsthatshowtheinformationthestudentoriginally

provided,theEFC,theresultsoftheeligibilitymatches,andinformationaboutaidhistoryandaboutanyinconsistencies

identifiedthroughtheCPSedits.IftheCPSwasunabletocalculateanEFC,theoutputrecordwillnotshowone.

TheoutputdocumentsaretheInstitutionalStudentInformationRecord(ISIR),whichismadeavailableelectronicallytothe

schoolsthestudentlistedontheFAFSAform(oraddedlater)andtheirstateagency,andtheStudentAidReport(SAR),

whichissenttothestudentormadeavailabletohimorheronline.

YouwillreceiveanISIRforthestudentonlyifheorsheincludesyourschoolontheirFAFSAform.Ifyourschoolisnot

listed,youcanrequestanISIRforthestudentthroughFAAAccessbyaddingyourfederalschoolcodeifyouhavehisor

herDRN,whichauthorizesyouraccesstothestudent’sapplicationinformation.TheDRNappearsintheupperright

cornerofthefirstpageoftheSARandatthetopofsomeofthecorrectablepages.

YouarerequiredtoreceiveISIRsandtoacceptSARsfromstudents,butyoucannotrequirethemtosubmitSARsinorder

toreceiveaid.Ifyoudon’thaveanISIRforastudent,yourfederalschoolcodemustbeaddedtohisorherrecordsoan

ISIRissenttoyou.WerecommendmakingcorrectionselectronicallyviatheonlineFAFSA(thestudent)orFAAAccess(the

school);however,youcanrequirestudentstouseaSARtomakecorrections.Ifyoudon’thaveanISIRforastudentwho

providedaSARorSARAcknowledgement,youmustusetheSARortheacknowledgementtoawardanddisbursethe

studentaid.Again,youmustalsoensurethatyourschoolcodeisaddedtothestudent’sCPSrecord(seethe“Howto

SubmitCorrectionsandUpdates”sectioninChapter4).

TheSARarrivesinoneofthreeways.(1)Studentswhogiveavalidemailaddresswillreceiveanemailwithalinktoan

onlineSAR.(2)Studentswhodon’tgiveanemailaddressandwhoapplywithaPDFFAFSAformwillreceiveapaperSAR.

TheywillalsoreceiveapaperSARifastudentorparentsignatureismissing;thatSARmustbesignedandreturnedfor

processing.(3)Studentswhodon’tgiveanemailaddressandwhoapplyelectronicallywillreceiveapaperSAR

Acknowledgement,whichhasfewerandlessdetailedcommentsthantheSARandcan’tbeusedforcorrectionsasthe

SARcan.

TheSARsandISIRsincludecommentcodesandtextexplaininganyquestionableresultsfromthematchesandedits

describedhere.ForsomeofthesetherewillalsobeaCcode,whichyoumustresolvebeforepayingthestudentaid.For

instance,ifastudenthasdefaultedonafederalstudentloan,theSARandISIRwillnotethisinseveralplaces,including

commentstothestudentandtheNSLDSfinancialaidhistorypage.

Forotherproblems,theSARandISIRwillshowthattheFAFSAhasbeenrejectedandnoEFChasbeencalculated.The

SARwilltellthestudenthowtoremovetherejectbyprovidingsignatures,moreinformationorbycorrectingerrors.

RejectcodesaregivenintheFAAInformationsection,andacompletelistofthemisinTheISIRGuide2022–2023.

https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-06-11/early-implementation-fafsa-simplification-acts-removal-selective-service-and-drug-conviction-requirements-title-iv-eligibility
https://fsapartners.ed.gov/knowledge-center/library/handbooks-manuals-or-guides/2021-07-12/2022-2023-isir-guide
Page 5: Application and Verification Guide

AvalidSARorISIRisoneonwhichalltheinformationreportedonastudent’sFAFSAisaccurateandcompleteasofthe

datetheapplicationissigned(34CFR668.2).

Deadlines

Theapplicationprocessingcyclelasts21months.Forthe2022-2023awardyear,applicationsareacceptedbeginning

October1,2021,andwillbeacceptedthroughJune30,2023.

TheCPSmustreceiveastudent’selectronicFAFSAinformationbyJune30,2023.ApaperFAFSAformmustbelegible,

anditmustbemailedtotheFederalStudentAidProgramsaddresslistedontheFAFSAformintimefortheprocessorto

receiveitbyJune30,2023.Therearenoexceptionstothesedeadlines.Anelectronicapplicationcannotbereceived

beforeOctober1,2021,andifitisreceivedafterJune30,2023,itwillnotbeprocessed.Apaperapplicationreceived

beforeOctober1,2021,orafterJune30,2023,willbereturnedunprocessedwithaletterofexplanation.Ifitissigned

beforeandreceivedafterOctober1,2021,itwillbeaccepted,butthestudentwillreceivearejectedSARaskinghimor

hertodateandre-signtheSARandreturnitforprocessing.

Forotherdeadlinespertainingtocorrections,changes,disbursements,andverification,seetheofficialdeadlinenoticefor

the2022–2023awardyear.ItwillprovidealltheprocessingdeadlinedatesandwillbeavailableintheKnowledgeCenter

websiteunder“FederalRegisters.”Forthesedeadlines,thedatetheCPSprocessedtheISIRtransactionisconsideredto

bethedatetheinstitutionreceivedtheISIR.OntheSAR,SARAcknowledgement,andISIRprintout,theprocesseddateis

abovetheEFConthefirstpage.

Studentswhodon’tsubmittheFAFSAformtilllaterintheawardyearcanreceiveaidfortheentireyear,including

completedpaymentperiods,aslongastheywerenotineligibleatthetime.Seethesectiononretroactivedisbursements

forcompletedperiodsinVolume3.

Websitesforstudents

https://studentaid.gov/—Highereducationportalforstudentsthatnowcontainsfunctionspreviouslyhousedon

otherwebsites,suchastheFAFSAapplicationloaninformation,counseling,payment,andotherfeaturesformerly

ontheNSLDSstudents’website

https://studentaid.gov/fafsa—Submitanapplicationormakecorrectionstoone;getanonlineSAR;check

statusofanapplication

https://studentaid.gov/
https://studentaid.gov/h/apply-for-aid/fafsa
Page 6: Application and Verification Guide

https://fafsa.ed.gov/spa/fafsa4c/#/landing—useFAFSA4caster(clickonUnderstandAid>EstimateYour

FinancialAid),tohelpfuturecollegestudentsestimatewhattheirEFCmightbeandwhatkindoffederalstudent

aidtheymightbeeligibleforwhentheyapplyforaid

https://studentaid.gov/fsa-id/create-account/launch—CreateanFSAIDandaccount,whichallowsstudents

toaccesstheirFAFSAformandotherinformationontheportal.

Resourcesforschools

CPSWebapplicationsdemo—YoucanusetheFAFSAontheWebdemonstrationsitetotrainfinancialaidstaff

ortoshowstudentshowtousetheonlineapplication.Gotothebottomofhttps://fafsademo.test.ed.govand

choosethelinktotheFOTWdemo(thereisalsoanFAAAccessdemo).

2022–2023SummaryofChangesfortheApplicationProcessingSystem—Goto

https://fsapartners.ed.gov/knowledge-centerandselectResourceType(underLibrary)>Handbooks,

Manuals,orGuides>2022-2023>SummaryofChangesfortheApplicationProcessingSystemGuide.

CPStechnicalsupportandquestionsaboutEDconnect,EDExpress,andRenewalFAFSAs—Calloremail

CPScustomerservice:1-800-330-5947,[email protected]

Technicalsystempublications—GototheSoftwareandOtherToolspageontheKnowledgeCenterwebsite.

FSAcallcenters—GototheHelpCenterpageintheFSAPartnerConnectwebsitesforthecontactinformation

pertainingtokeyschoolservicecentersandFSASystems.

https://fafsa.ed.gov/spa/fafsa4c/#/landing
https://studentaid.gov/fsa-id/create-account/launch
https://fafsademo.test.ed.gov/webdemo.htm
https://edit.fsapartners.ed.gov/knowledge-center/topics/software-and-other-tools
https://fsapartners.ed.gov/help-center
Page 7: Application and Verification Guide

Chapter2

FillingOuttheFAFSA

TheFAFSAformisthefirststepinthefinancialaidprocess.Becauseit’simportanttocompletetheformcorrectly,this

chapterdiscussessomeofthemoredifficultquestionsthatarise.Whilethechapterfollowstheorganizationofthepaper

applicationandtheISIR,theguidanceappliesequallytotheFAFSAonline.ToseehowFAFSAdataareusedtocalculate

theexpectedfamilycontribution(EFC),pleaserefertoChapter3.

TheFAFSAformisorganizedassteps,eachconsistingofagroupofrelatedquestions.Therearealsoinstructionsonhow

tofillouttheform.Theguidanceinthischaptersupplementsthoseinstructionsandexplainswhysomeofthequestions

areneededontheFAFSAform.

StudentscangetadviceonfillingouttheFAFSAonlineathttps://studentaid.gov/resources.Youmaywanttolinkto

thisreferencefrompagesthatstudentsuseonyourwebsiteorusecertaingraphics,videosorpublicationsreferencedon

thesitewhenworkingwithyourstudents.

Theparentsmentionedarethoseofdependentstudents.Thenumbersinparenthesesarefortheitemsastheyappearon

theSAR,ISIR,paperFAFSA,andFAAAccesstoCPSOnline.AsofthedatetheFAFSAformissigned,itisconsidereda

“snapshot”ofthefamily’sinformationthatcanbeupdatedonlyincertaincircumstancesandonlyforcertainitems;see

Chapter4.

ThefollowingsectionsdiscussmanyoftheimportantquestionsfoundwithineachStepontheFAFSAform.

StepOne:GeneralStudentInformation

Thisstepidentifiesthestudentandestablisheshisorheraideligibilitybasedonfactorssuchascitizenshipand

educationallevel(seealsoVolume1:StudentEligibility).QuestionsinStepOneareincludedtohelptheschoolpackage

awardsandtoeliminatetheneedforstudentstofilloutaseparatestateorschoolfinancialaidform.

Pleasenote:AsdescribedinDearColleagueLetterGEN-21-04,theFAFSASimplificationActeliminatedtheprohibitionon

receivingTitleIVaidforstudentswithdrug-relatedconvictionsandtherequirement,forTitleIVeligibilitypurposes,that

malestudentsregisterwiththeSelectiveServicesystembeforetheageof26.TheDepartmentbeganimplementing

thesechangesstartingwiththe2021-2022awardyear.Forthe2022-2023awardyear,thoughinstitutionswillstillsee

CommentCodes30,33,or57forSelectiveServiceissuesandCodes53,54,56,or58fordrugconvictions,failingto

registerwiththeSelectiveServiceorhavingadrugconvictiondoesnotimpactastudent’sTitleIVaideligibilityandmust

beignoredbytheinstitution.Inaddition,forthe2022–2023awardyear,theDepartmentwillincludelanguageinthe

CommentCodesstatingthatnofurtheractionisnecessaryonthepartofthestudentortheinstitution.

Student’sname(1–3).Thename,withotheridentifyinginformation,isusedforseveraldatamatches.Becausethe

U.S.DepartmentofEducation(ED)matchesthestudent’snameandSocialSecuritynumber(SSN)withtheSocial

SecurityAdministration(SSA),thenamehereshouldmatchtheoneintheSSA’srecords,i.e.,asitappearsonthe

student’sSocialSecuritycard.

Permanentmailingaddress(4–7).Thisisthestudent’spermanenthomeaddress,withtwoexceptions:

incarceratedstudentsshouldusetheaddressofthefacilitytheyarein,andhomelessyouthshoulduseamailing

addresswheretheycanreliablyreceivemail.Thatcanbetheaddressofarelativeorfriendwhohasgiventhem

permissiontouseit,oritcanbetheirschool’saddressaslongastheyhavecontactedtheschoolforpermissionand

instructionsonhowmailtheyreceiveattheschoolwillreachthem.Assoonasincarceratedandhomelessstudents

havemorepermanenthousing,theyshouldupdatetheiraddressontheFAFSAform.

Student’sSSN(8).StudentsmusthaveanSSNtoapplyforfederalstudentaidexceptasnotedbelow.Ifthey

submitFAFSAinformationwithoutanSSN,theFAFSAformwillbereturnedunprocessed.TogetanSSNortofindout

whatthenumberisiftheylosttheirSocialSecuritycard,theymustcontactthelocalSSAoffice.ContacttheSSAat

1-800-772-1213orhttps://www.ssa.gov/ssnumber/formoreinformation.

StudentswhoenterthewrongSSNontheirFAFSAformcancorrectitinafewways:throughtheschool,by

submittingacorrectedpaperSAR,orbyfilinganewFAFSAform.Iftheydon’thaveacopyoftheirSAR,theycancall

theFederalStudentAidInformationCenter(1-800-433-3243)andhaveonesenttothem,whichtheycancorrectand

https://studentaid.gov/resources
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-06-11/early-implementation-fafsa-simplification-acts-removal-selective-service-and-drug-conviction-requirements-title-iv-eligibility
https://www.ssa.gov/ssnumber/
Page 8: Application and Verification Guide

mailtotheaddressontheSAR.However,correctingtheSSNthroughtheschoolorwiththeSARwillnotchangethe

numberinthestudent’sidentifier;thatwillremaintheoriginalSSNandmaylatercauseconfusion.Completingand

submittinganewFAFSAformsolvesthisproblem.Notethatthereareotherrareinstanceswhereastudentmust

submitaspecial“correctionapplication.”SeetheJune22,2017,announcement.

PersonsfromtheFreelyAssociatedStates(FAS)—theRepublicoftheMarshallIslands,theFederatedStatesof

Micronesia,andtheRepublicofPalau—typicallydonothaveSSNs.StudentswhoarecompletingaFAFSAformfor

thefirsttimeandwhoindicatethattheirstateoflegalresidenceisoneoftheabovePacificislandgroupsshould

enter“666”asthefirstthreedigitsoftheirSSNfieldandleavetheremainingsixdigitsblank.CPSwillthenassign

themanidentificationnumber.StudentsfromtheFASwhohavesubmittedaFAFSAformbeforeandwereissued

suchapseudo-SSNwillenteritintheSSNfield.Itisimportantthattheyusethesamenumberonall

subsequentFAFSAsbecauseitallowsformoreaccurateinformationonPellGrantLifetimeEligibilityUsed(LEU).

Ifastudentdoesnotusethesamepseudo-SSNacrossawardyears—ifonasubsequentFAFSAformheorsheeither

getsanewpseudo-SSNandusesthatorifheorsheusesarealSSNthatheorsheobtainedfromtheSSA—the

schoolmustcontacttheCODSchoolRelationsCentersothemultiplestudentrecordscanbemergedintooneand

thecorrectLEUcanbecalculated.Also,ifPacificislandstudentsfilewitharealSSN,schoolswillneedtohavean

alternateway,otherthanthepseudo-SSN,ofidentifyingthatpopulationtoensurethatthecorrectawardlimitations

describedinVolume1,Chapter2oftheHandbookareinplaceforthosestudents.

Student’semailaddress(13).Ifthestudentprovidesthisaddress,heorsheshouldgetanemailwithalinktohis

orheronlineSARdatawithinonetothreedaysaftertheCPSreceiveshisorherapplication.TheDepartmentwill

alsousethisemailaddresstocorrespondwiththestudentregardinghisorherapplication.

Citizenshipstatus(14).ExamplesofeligiblenoncitizencategoriesaregivenintheFAFSAinstructions,anda

detaileddiscussionofcitizenshipissuescanbefoundinVolume1:StudentEligibility.OnlyU.S.citizensorcertain

classesofnoncitizensareeligibleforTitleIVaid;however,otherstudentscanstillsubmittheFAFSAbecausethey

mightbeeligibleforaidfrominstitutional,state,orprivatesourcesthatdonothavethesamerequirementsbutuse

FAFSAinformation.

Student’smaritalstatus(16and17).Thisismaritalstatus“asoftoday”—thedaytheapplicationissigned.

Maritalstatuscannotbeprojected.Itcanbeupdatedinlimitedcircumstances;seeChapter4.

Same-sexmarriageandtheFAFSAform—In2013,inUnitedStatesv.Windsor,theSupremeCourtruledthat

Section3oftheDefenseofMarriageAct(DOMA)wasunconstitutionalbecauseitviolatestheprinciplesofdue

processandequalprotection.Asaresult,same-sexcoupleswhohavemarriedinadomesticorforeignjurisdiction

thatrecognizesthemarriageshouldcompletetheFAFSAasamarriedcoupleregardlessofwhetherthejurisdictionin

whichtheyresideorthestudentattendsschoolrecognizesthemarriage.Thisappliestoindependentstudentsandto

theparentsofdependentstudents.SeeDCLGEN-13-25formoreinformation.

Student’sstateanddateoflegalresidence(18–20).Thisisusedtofiguretheallowanceforstateandother

taxesfortheEFCcalculation.

Italsoindicateswhichstateagencyshouldreceivethestudent’sFAFSAinformation.Stateshavevaryingcriteriafor

determiningwhetherthestudentisaresidentforpurposesoftheirfinancialaid.However,residinginonestatefor

fiveyearswillmeetanystate’scriteria.Therefore,apersonanswering“Yes”toQuestion19willlikelymeetthe

residencyrequirementsofthestatereportedinQuestion18,whilethestateeligibilityforapersonanswering“No”

willdependonthedatereportedinQuestion20andthestate’srequirements.

Student’sgenderandSelectiveServiceregistration(21–22).Priortothe2021–2022awardyear,male

students(i.e.,thosewhowereassignedthesexofmaleatbirth)neededtohaveregisteredwiththeSelective

ServiceSystem(SSS)tobeeligibleforfederalstudentaid.TheDepartmentconductsamatchwiththeSSStoverify

thisrequirement.

However,asdescribedinDearColleagueLetterGEN-21-04,theFAFSASimplificationActeliminatedtherequirement,

forTitleIVeligibilitypurposes,thatmalestudentsregisterwiththeSelectiveServicesystembeforetheageof26.

TheDepartmentbeganimplementingthischangestartingwiththe2021–2022awardyear.

Forthe2022–2023awardyear,thoughinstitutionswillstillseeCommentCodes30,33,or57forSelectiveService

issues,failingtoregisterwiththeSelectiveServicedoesnotimpactastudent’sTitleIVaideligibilityandmustbe

ignoredbytheinstitution.Inaddition,forthe2022–2023awardyear,theDepartmentwillincludelanguageinthe

CommentCodesstatingthatnofurtheractionisnecessaryonthepartofthestudentortheinstitution.Formore

https://edit.fsapartners.ed.gov/electronic-announcements/06-22-2017-application-processing-subject-ssn-corrections-cps
https://fsapartners.ed.gov/help-center/fsa-customer-service-center/service-centers-for-schools
https://edit.fsapartners.ed.gov/dear-colleague-letters/12-13-2013-gen-13-25-subject-supreme-court-ruling-defense-marriage-act-and
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-06-11/early-implementation-fafsa-simplification-acts-removal-selective-service-and-drug-conviction-requirements-title-iv-eligibility
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informationaboutthisstudenteligibilitymodification,pleaseseeVolume1,Chapters1and5.

Convictionforpossessingorsellingillegaldrugs(23).Priortothe2021–2022awardyear,studentsconvicted

ofafederalorstateoffenseofsellingorpossessingillegaldrugsthatoccurredduringaperiodofenrollmentwhile

theywerereceivingfederalstudentaidcouldloseaccesstoTitleIVfundingbutwerestillencouragedtocomplete

andsubmittheFAFSAformbecausetheymaybecomeeligibleforfederalaid,andeveniftheyarenoteligible,they

maybeeligibleforstateorinstitutionalaid.

AsdescribedinDearColleagueLetterGEN-21-04,theFAFSASimplificationActeliminatedtheprohibitionon

receivingTitleIVaidforstudentswithdrug-relatedconvictions.TheDepartmentbeganimplementingthischange

startingwiththe2021–2022awardyear.

Forthe2022–2023awardyear,thoughinstitutionswillstillseeCommentCodes53,54,56,or58fordrug

convictions,havingadrugconvictiondoesnotimpactastudent’sTitleIVaideligibilityandmustbeignoredbythe

institution.Thismeans,regardlessofhowthestudentanswersquestion#23ontheFAFSAform,thestudent’sTitle

IVeligibilitywillnotbeaffectedbyhavingadrugconviction.Forthe2022–2023awardyear,theDepartmentwill

includelanguageintheCommentCodesstatingthatnofurtheractionisnecessaryonthepartofthestudentorthe

institution.

Formoreinformationaboutthisstudenteligibilitymodification,pleaseseeVolume1,Chapters1and5.

Highestlevelofschoolcompletedbystudent’sparents(24and25).Somestateagenciesusethis

informationtoawardgrantsandscholarships.Fatherandmotheraredefinedhereasthestudent’sbirthoradoptive

parentsbutnotstepparents,guardians,orfosterparents.Thisdefinitionisuniquetothesequestions—allothersuse

thedefinitionfoundunderthe“WhodoesanddoesnotcountasaparentontheFAFSAform”sectiondescribedlater

inthischapter.

IRSDataRetrievalTool

TheIRSDataRetrievalTool(DRT)allowsstudentsandparentswhousetheonlineFAFSAortheFAFSAfeatureof

myStudentAidmobileappandwhohavealreadysubmittedtheirfederaltaxreturntoelectronicallyretrievetheir

taxdatafromtheIRSdatabase.TheISIRwillshowthatdatawasimportedandifitwasaltered.Allstudentsand

parentsofdependentstudentswhoindicateontheapplicationthattheyhavealreadyfiledafederaltaxreturn

andwhoareotherwiseeligibletousetheDRTwillbedirectedtodoso.

TheDRTwillautomaticallyanswerthequestionaboutwhetherornotataxfilerfiledaSchedule1.Theanswerwill

bebasedonallcurrentexceptionsforfilingaSchedule1andthetransferreddatafortheSchedule1fieldswillbe

handledthesameasotherdatatransferredusingtheIRSDRT.

Theactualvaluesoftheimporteddataarenotviewablebystudentsandparents(thoughtheystillappearonthe

ISIR).Thisistoenhancesecurityandprivacyandtopreventthemisuseofsensitivedata.Becauseaidofficersand

otherofficialswillbeabletoseethetransferreddata,andinkeepingwiththeexpectationthattheyprotectthe

confidentialityofdataassociatedwiththeTitleIVprograms,theymustnotdiscloseincomeandtaxinformation

fromtheFAFSAformwiththeapplicant,theapplicant'sspouse,ortheapplicant'sparentsunlesstheycan

authenticatetheiridentity.Forexample,astudentappearinginpersonandpresentinganunexpired,valid,

government-issuedphotoIDsuchasadriver’slicensewouldbeaneffectivewaytoauthenticatehisorher

identity.SeetheSeptember5,2017,announcementformoreinformation.

AsaresultofIRSdatabeingmasked,studentsandparentswillnotbeabletochangeitontheFAFSA;the

financialaidofficewillneedtomakecorrections.Also,rolloverswillbehandleddifferently.IftheDRTtransfersa

non-zeroamountintotheuntaxedpensionorindividualretirementaccount(IRA)distributionfield,theapplicant

willbeaskedifanyofitisduetoarollover.Ifheorsheanswersyes,heorshewillthenentertherollover

amount,whichtheCPSwillsubtractwhencalculatingtheEFC.Andbecauseofthedatamasking,studentsand

parentswhofileajointtaxreturnwillnotbeabletotransfertheirincomeearnedfromworkbutwillhaveto

manuallyenterthoseamounts.Theincomeearnedfromworkofsinglepersonswill,however,continueto

transfer.SeetheAugust7,2017,announcement.

https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-06-11/early-implementation-fafsa-simplification-acts-removal-selective-service-and-drug-conviction-requirements-title-iv-eligibility
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2017-09-05/general-subject-reminder-institutions-higher-education-and-state-agencies-regarding-privacy-and-security-data-free-application-federal-student-aid
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2017-08-07/application-processing-subject-changes-irs-data-retrieval-tool-process-2018-19-fafsa-form
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Highschoolcompletionstatus(26).Thestudentindicatesoneofthefollowing:highschooldiploma,General

EducationalDevelopment(GED)certificateorstatecertificate,homeschooled,ornoneoftheabove.Noneofthe

aboveincludesthosewhohavetherecognizedequivalentofahighschooldiploma(asdefinedin34CFR600.2)

otherthanaGEDcertificateorastatecertificateorwhomayqualifyundertheAbility-to-Benefit(ATB)alternatives;

seeVolume1,Chapter1,foranexplanationofthoseoptions.Typicallyaforeignsecondaryeducationcredential

countsasahighschooldiploma;seeFHD-Q1ontheprogramintegritywebsite.

Astatecertificateiswhatstudentsreceiveafterpassinga“stateauthorizedexamination,”asreferredtoin34CFR

600.2.ThisincludestestscomparabletotheGED—i.e.,thosecreatedanddistributedbyatestpublisher—suchas

theHighSchoolEquivalencyTest(HiSET)ortheTestAssessingSecondaryCompletion(TASC),aswellasthose

establishedbystates,forexample,theCaliforniaHighSchoolProficiencyExam(CHSPE).Californiaconsidersa

passinggradeontheCHSPEtobeequivalenttoadiploma.

Highschool(27).Thisquestionasksforthenameofthehighschoolwherethestudentreceivedorwillreceivehis

orherdiploma,aswellasthecityandstate(orFCforforeigncountry)whereitislocated.OntheFAFSAwebsite,the

studentcanchoosethenamefromthedropdownlist,or,ifitisnotonthelist,thestudentwillentertheschool

name,city,andstatedirectlyontheFAFSAform.SeeVolume1,Chapter1,regardingaschool’spolicyabout

checkingthevalidityofahighschooleducation.

WhentheISIRshowsanIRSRequestFlagvalueof06or07,schoolswillneedtocontactthestudentorparent.A

valueof06indicatesthataftertheDRTwasusedandtheFAFSAwassubmitted,thestudentorparentchangedan

itemontheFAFSA(e.g.,thedateofmarriage)thatwouldhavemadethepersonineligibletousetheDRT.The

schoolmustcontactthestudentorparenttodetermineifallofthetransferreddatawascorrectorifitneedsto

becorrected.Avalueof07isanindicationfromtheIRSthatthestudentorparentusedtheDRTbutalsohasfiled

anamendedtaxreturnfortherelevantyear(includesamendedreturnsgeneratedbyIRSadjustments).Because

thedatathatwastransferredwillbefromtheoriginalreturnandnottheamendedone,theschoolmustcontact

thestudentorparentandmakeanyapplicablecorrectionstoFAFSAitems,regardlessofwhethertheapplication

wasselectedforverification.

TheISIRwilldisplayIRSDataFieldflagsthatindicateifanyindividualitemwastransferredfromtheIRSandifit

wassubsequentlychanged.Aflagvalueof1willindicatethattheitemwastransferredandwasnotchanged.

Suchitemsdonotneedtobeverifiedifthestudentisselectedforverification.However,whenthereisaRequest

Flagvalueof06or07,theaboveguidancemustfirstbefollowed.TheAugust7announcementhasmore

information.

AlsoduetotheIRSdatamasking,therearetwocommentcodesthatschoolsmustrespondto:code400for

parentsand401forstudents.WhenanISIRindicateseitherofthesecodes,theschoolmustchecktheFAFSAto

seeifanyofthefollowingconditionsexistandmakenecessarycorrections:

1. ThestudentorparentisataxfilerandtheAGItransferredfromtheIRSiszero,butthetotalincomeearned

fromworkisgreaterthanzero.

2. Thetotalofthetaxableincomeoffsets(seethe“taxableincomeoffsetssectionlaterinthischapter)forthe

studentorparentsisgreaterthantheAGItransferredfromtheIRS.

3. Anyoftheuntaxedincomeitems(seethe“Untaxedincome”sectionlaterinthischapter)forthestudentor

parentisgreaterthanorequaltotheAGItransferredfromtheIRS.

Theschoolmayneedtocontactthestudentorparentforanexplanationofoneoftheaboveconditionsandto

determineifanyoftheassociatedFAFSAitemsneedtobecorrected.Also,commentcodes400and401canbe

consideredresolvedif(V1orV5)verificationiscompletedforthesameISIR.Again,seetheAugust7

announcementformoreinformation.

Definitions

https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/hsdiploma.html#fhd
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Firstbachelor’sdegree(28).Thestudentindicateswhetherheorshewillhaveafirstbachelor’sdegreebefore

beginningthe2022–2023yearbecauseeligibilityforPellandFederalSupplementalEducationalOpportunitygrants

(FSEOGs)isalmostexclusivelyrestrictedtostudentswhohavenotreceivedabachelor’sdegreeorcompletedthe

requirementsforone.See“PellGrants”inChapter6ofVolume1regardingdegreesfromunaccreditedandforeign

schools,whichcancountasbachelor’sdegreesforPellandFSEOGeligibility.

Student’scollegegradelevelatthestartoftheschoolyear(29).Thisisnotbasedonthenumberofyears

thestudenthasattendedcollegebutonworkcompletedtowardthedegree/certificate.Forinstance,afull-time

studentmightattainsecond-yeargradelevelafteroneyearofstudy,whileahalf-timestudentwouldtaketwoyears

toreachthatlevel.

Interestinwork-study(31).ThestudentindicateswhetherheorsheisinterestedinreceivingFederalWork-Study

(FWS).Thishelpstheschoolinpackagingthestudent'saward.IfthestudentisunsureaboutwantingFWS,heorshe

shouldanswer“don’tknow”tostillbeconsideredforit;laterheorshecandeclineanyaidheorshedoesnotwant.

Undergraduatestudent—Onewhoisenrolledinaprogramthatusuallydoesnotexceedfouracademicyearsor

alongerprogramthatleadstoafirstdegreeatthebaccalaureatelevel.Studentsinprogramslongerthanfive

yearsareconsideredundergraduatesforonlythefirstfouryears.

FortheFSEOG,Pell,andTEACHGrantprograms,astudentisanundergraduateonlyifheorshehasnotearned,

orcompletedtherequirementsfor,abachelor’sorprofessionaldegree.Studentsenrolledinapostbaccalaureate

programasdescribedin34CFR686.2(d)and690.6arestillundergraduatesforreceivingTEACHandPellgrants

butnotFSEOG.

Studentsindualdegreeprogramsthatconferabachelor’sdegreeandeitheragraduateorfirstprofessional

degreeareundergraduatesforatleastthefirstthreeyearsoftheprogram.Theschooldeterminesatwhatpoint

afterthreeyearstheyceasetobeundergraduates.[34CFR668.2(b)]

Graduateorprofessionalstudent—Onewho(1)isnotreceivingaidasanundergraduateforthesameperiod

ofenrollment;(2)isenrolledinaprogramabovethebachelor’sdegreeleveloroneleadingtoaprofessional

degree;and(3)hascompletedtheequivalentofatleastthreeyearsoffull-timestudy,eitherbeforeentranceinto

theprogramoraspartofit.

Measuredincredithours,threeyearsoffull-timestudymustbeatleastthreetimestheannualminimumforfull-

timestudy:72(24x3)semesterortrimesterhoursor108(36x3)quarterhours.[34CFR668.2(b)]

Simplifiedneedstest—Thelawprovidesa“simplifiedEFC”calculationforastudentwhomeetscertainincome

andtaxfilingrequirements.IftheapplicantiseligiblebasedontheinformationontheFAFSAform,theCPSwill

automaticallyexcludeassetsfromtheEFCcalculation.However,somestatesandschoolsrequirethisinformation

fortheirownaidprograms.

NoincomereportedontheFAFSAform

Occasionallyanapplicantwillreportnoincomeforthebaseyear.Thiscanoccurwhenthefamilyhastaxwrite-

offsthatproduceanegativeAGIorwhentheapplicantneglectedtoreportuntaxedassistance.IftheCPSdoesnot

selectthestudentforverification,youmaystillchoosetoaskhimorherforfurtherinformationabouthisorher

meansofsupportduringthebaseyear.Also,youmayuseprofessionaljudgment(PJ)toadjusttheincomeline

itemstoreflectincomethefamilyreceivesthatdoesn’tappearonthetaxreturn.

Anycashsupportforthestudent,otherthansupportfromaparentforadependentstudent,countsasuntaxed

incomeandmustbereported.In-kindhelp(seethe“Incomeandbenefitsnottobeincluded”sectionlaterinthis

chapter)fromafriendorrelativeisnotconsidereduntaxedincomeandwouldnotappearontheFAFSAform,

however,youmayusePJtoaccountforthevalueofthatin-kindsupportintheCOA.Forexample,youcould

adjusttheroomandboardcomponentoftheCOAforastudentwholiveswithhisorherauntandeatsmealswith

hisorherfamily.

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StepsTwoandFour:IncomeandAssets

StepTwo(questions32–44)askforthestudent’sandspouse’sincomeandassets[HEASec.480(a),(b),(f),(g)].StepFour

(questions58–92)collectssimilarinformationaboutparentincomeandassets,sothefollowingdiscussionalsoappliesto

parentsaswell.

Ifthestudentorhisorherparentwasnotmarriedin2020butismarriedwhentheapplicationissigned,thestudentalso

needstoprovideincomeandassetinformationforthenewspouse.Ifthestudentortheirparentwasmarriedin2020but

isseparated,divorced,orwidowedwhentheapplicationissigned,thestudentorparentexcludestheincomeandassets

forthatspouseeventhoughtheinformationmaybeonthe2020taxforms.

TheFAFSAformasksforincomeandtaxespaidaccordingtolinesontheIRStaxformsfor2020,the“baseyear”for

2022–2023.Datafromthecompletedtaxyearisusedasapredictorofthefamily’sfinancialsituationforthecurrentyear.

Intherareinstancethat2020taxdataisnotavailableyet,bestestimatescanbeusedontheapplication.However,the

studentisaskedtocorrectthisinformationlaterwhenthetaxreturnisfiled.

InformationfromtheincometaxreturnsrequiredbythetaxcodesoftheCommonwealthofPuertoRico,Guam,American

Samoa,andtheU.S.VirginIslandsisreportedontheFAFSAforminthesamemannerasU.S.taxinformation,andcopies

oftheseformscanbeusedforverificationinthesamewayasU.S.taxformsare.AmountsarealreadyreportedinU.S.

dollars,andtheschoolshouldlookattaxreturnlineitemsthatarecomparabletotheIRSlineitemsforverification.

WhenastudentorparenthasreturnsfrombothaforeignnationandtheUnitedStatesforthesametaxyear,theyshould

usethedatafromtheU.S.returnwhenfillingouttheFAFSAform.

TheFAFSAapplicationalsocollectsinformationforcertaininvestmentsandotherassets.Applicantsonlyreportthenet

worthofassetsinsteadofreportingthevalueanddebt.Theyshouldreportassetamountsasofthedatethe

applicationissigned.

Taxreturnfiledandtaxfilingstatus(32–35,79–82forparents).Thesequestionsaskifa2020taxreturnwas

completed,whichreturnwasorwillbefiled,whatthefilingstatuswasorwillbe,andwhetherthestudentorparents

filedaSchedule1ordidsoonlytoclaimoneormoreofthefollowing:unemploymentcompensation,anAlaska

Marriedfil ingseparately

Whenastudentandspouseoradependentstudent’sparentsfileseparateanddifferenttypesofreturns,what

typeshouldbeindicatedinQuestion33or80?Insuchcases,IRSForm1040andforeigntaxreturnsare

consideredcomparableandtakeprecedenceovertaxreturnsfromthefiveinhabitedU.S.territories:PuertoRico,

Guam,theU.S.VirginIslands,theNorthernMarianaIslands,andAmericanSamoa.Forexample,ifastudentfiled

aforeignreturnandhisorherspousefiledaPuertoRicanreturn,thestudentwouldanswerforeigntaxreturnfor

question33.Whencomparablebutdifferentreturnsarefiled,theIRSreturntakesprecedenceandisindicated.If

theabovestudentfileda1040returnandhisorherspousefiledaforeignreturn,thestudentwouldanswerIRS

1040tothequestion.

Ifonespousefilesseparatelyandtheotherdoesnotfileareturnbuthassomeincome,howdoyoufigurethe

AGI?Addtheincomeearnedfromwork(e.g.,earningsfromtheW-2formoranyotherearningstatements)ofthe

spousewhodoesnotfileareturntotheAGI(asgivenonline11ofForm1040)ofthespousewhodoesandenter

thesumontheappropriateAGIlineoftheFAFSA.

EFAornot?

Sometimesitisdifficulttoaccountforanoutsidefinancialaward.Ifastudentreceivestheawardbecauseof

postsecondaryenrollment,itcountsasestimatedfinancialassistance(EFA)ifitisnotconsideredwagesfor

employmentaccordingtofederalorstaterules,orifitisconsideredwagesandisbasedonneed.Anyamount

thatappearsasincomeonthetaxreturnwillalsobeincludedontheappropriatelineofitem43or91onthe

2022–2023FAFSAform.Iftheawardisconsideredwagesforemploymentbutisnotbasedonneed,thenitisnot

EFAanditremainsinincome.

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PermanentFunddividend,educatorexpenses,anIRAdeduction,orthestudentloaninterestdeduction.Theanswers

areusedinparttoidentifyifthestudentiseligibleforthesimplifiedneedstestortheautozeroEFCandtofind

inconsistenciesbetweentheFAFSAformandthetaxreturn.

Adjustedgrossincome(AGI),incometax,andincomeearnedfromwork(36–39,84–87forparents).

Theseitemsarereportedfordependentstudents,theirparents,andindependentstudents.Eachquestiongivesthe

linereferencetothe2020IRStaxforms.

ThoughstudentsandparentsmaymanuallyentertheirIRSdataintheFAFSA,theyarestronglyencouragedto

transferitwiththeDRTbecausethatmethodisaccurate,efficient,andusefulforverification.

Thosewhofileajointreturnandthenaredivorced,separated,orwidowedbeforetheapplicationissignedwon’tbe

Qualifiededucationbenefits

Qualifiedtuitionprograms(QTPs,alsoknownassection529plansbecausetheyarecoveredinsection529ofthe

IRStaxcode)andCoverdelleducationsavingsaccountsaregroupedtogetherinthelawasqualifiededucation

benefitsandhavethesametreatment:theyareanassetoftheowner(notthebeneficiarybecausetheownercan

changethebeneficiaryatanytime)exceptwhentheownerisadependentstudent,inwhichcasetheyarean

assetoftheparent.Whentheownerissomeotherperson(includinganoncustodialparent),distributionsfrom

theseplanstothestudentcountasuntaxedincome,as“moneyreceived.”Whenaparentownsaplanforachild

andtheparentisfilingaFAFSAapplicationasastudentforhimselforherself,theplancountsasanassetonthe

parent'sFAFSAform.

States,theiragencies,andsomecollegessponsorqualifiedtuitionprograms.TheIRSmentionstwotypesofQTPs

thatarecommonlycalledprepaidtuitionplansandcollegesavingsplans.Statesmayofferbothtypes,but

collegesmayonlysponsorprepaidtuitionplans.

Prepaidtuitionplansallowapersontobuytuitioncreditsorcertificates,whichcountasunitsofattendance.The

numberofunitsdoesn’tchangeeventhoughtuitionwilllikelyincreasebeforethebeneficiarygetstousethe

tuitioncredits.Theyareanassetoftheplanowner,andtheirworthistherefundvalueofthecreditsor

certificates.

Collegesavingsplansallowabenefactortodepositmoneyintoanaccountthatwillbeusedforthebeneficiary’s

collegeexpenses.Thebuyerdoesnotpre-purchasetuitioncreditsaswithaprepaidtuitionplan.Rather,thistype

ofplanisessentiallyasavingsaccount,anditsvalueasanassetisthecurrentbalanceoftheaccount.

Coverdelleducationsavingsaccounts,orESAs,areanothertax-advantagedsavingsvehicleforcollegeeducation.

Theyaretreatedthesameascollegesavingsplans:thecurrentbalanceisanassetoftheaccountowner.

AslongasdistributionsfromQTPsandESAsdonotexceedthequalifiededucationexpensesforwhichtheyare

intended,theyaretax-free,sotheywillnotappearinthenextyear’sAGI.Theyshouldnotbetreatedasuntaxed

income(exceptinthecasesmentionedabove)orasestimatedfinancialassistance.Formoreinformationon

thesebenefits,seetheIRS’sPublication970,TaxBenefitsforEducation.

Reporting“take-back”mortgages

Inatake-backmortgage,thesellerofahousefinancesaportionofitscostforthebuyer,whorepaysthis

additionalmortgagetotheseller.Thesellerreportstheinterestpartofanypaymentsreceivedfromthebuyeron

ScheduleBofIRSForm1040.Therefore,ifastudentorhisorherparentsreportsuchinterestonthetaxreturn,it

likelyindicatesanassetthatshouldbereportedontheFAFSAform:thevalueofthetake-backmortgage.There

wouldbenodebtreportedagainstthisasset.Forexample,ifadependentstudent’sparentssoldtheirhousefor

$200,000andfinancedatakebackmortgageof$40,000tothebuyer,theparentsshouldreport$40,000asthe

networthoftheinvestment.Theworthwilldecreaseeachyeardependingonhowmuchoftheprincipalthebuyer

paidbackthatyear.Thisconceptappliestootherformsofsellerfinancingofthesaleofahomeorotherproperty.

Page 14: Application and Verification Guide

abletosimplycopytheinformationfromthetaxformsortransferdatawiththeDRT.Instead,theymustfigureout

howmuchoftheincomeandtaxespaidisattributabletothemandnottheirspouse.Formoreonthiscalculation,

see“UsingajointreturntofigureindividualAGIandtaxespaid”inChapter4.

Ifthestudent,spouse,orparentswerenotrequiredtofileataxreturn,thestudentshouldstillreportanyincome

earnedfromworkinquestions38–39(studentandspouse)andquestions86–87(parents).TheW-2formandother

recordsofworkearningsshouldbeusedtodeterminetheseamounts.Donotincludecombatpay;becauseitisnot

countedasuntaxedincomeandisremovedfromtheAGIwhenitistaxable,itshouldnotbeincludedintheincome

earnedfromwork.

TheFAFSAforminstructstheapplicanttoaddline1ofthe1040formtolines3and6ofSchedule1andbox14(code

A)ofScheduleK-1(Form1065)asanoptionfordeterminingtheincomeearnedfromwork.Butwhenthevaluesof

lines3or6orbox14arenegative,thiswillreducethetotalandcanwronglyaffecttheSocialSecurityallowance.If

valuesfromlines3or6orbox14arenegative,treatthemaszerowhendeterminingtheincomeearnedfromwork.

IncomeearnedfromworkisusedtocalculateallowancesfortheSocialSecurityandMedicaretax(akatheFederal

InsuranceContributionsActorFICAtax)andfortheaddedcostsincurredbytwoworkingspouses.Fornon-taxfilers

itwillalsobeusedinplaceofAGIandwillcausetheapplicationtoberejectedifitisabovethetaxfilingthreshold.

Forafiscalyear(ratherthancalendaryear)taxreturn,informationshouldbeusedfromthereturnthatincludesthe

greaternumberofmonthsin2020.

Example:Owen’sparentsfileafiscalyeartaxreturn.TheirfiscalyearbeginsinSeptember.Thereturntheyfiledfor

thefiscalyearstartinginSeptember2019includeseightmonthsin2020.Thereturntheyfiledforthefiscalyear

startinginSeptember2020onlyincludesfourmonthsof2020.Therefore,theyshouldusetheinformationfromthe

returnforthefiscalyearthatbeganinSeptember2019.

IfthestudentorparentsfiledataxreturnusingsomethingotherthananIRSform,suchasaforeignorPuertoRican

taxform,thestudentshouldreportontheFAFSAformtheamounts(convertedtoU.S.dollars)fromthelinesofthe

formthatcorrespondmostcloselytothoseonthecommonIRSforms.

Non-taxfilers,foreigncountries,andinternationalorganizationsInsomecountriesthetaxsystemdoesnot

operateasitdoesintheU.S.,andpeopleinthosecountriescanearnasubstantialamountofincomeandpaytaxes

withouthavingtofileareturn.Insuchacasethepersonwouldcorrectlyindicatethatheorshedidnotfileatax

return,andnothingwillbereportedforAGIorincometaxpaid.Whenthathappens,heorsheshouldreportanynet

incomethatisearnedfromworkinQuestion38,39,86,or87,asappropriate,oftheFAFSAformandnotasuntaxed

incomeinQuestion44hor92h,whichiswhereuntaxedforeignincomenotearnedfromworkshouldbereported.

ThisensuresthattheincomeisproperlyincludedintheEFCcalculation;fornon-taxfilers,incomeearnedfromwork

isusedinplaceoftheAGIandtodetermineeligibilityforthesimplifiedneedstest(SNT)andautomaticzeroEFC.

Asnotedearlier,whenincomeearnedfromworkexceedstheU.S.taxfilingthresholdandthepersonindicatesheor

sheisnotgoingtofileareturn,theFAFSAformwillberejected.TheaidofficemustoverridetherejectinFAAAccess

toCPSOnlinesothatanEFCwillbegenerated.

Whathappenswhenonespousefilesareturnbuttheotherspousedoesnotfileareturnbuthasforeignearned

incomeasdescribedabove?Becauseonespousefiledareturn,theFAFSAformshouldindicateinQuestion33or80

whatreturnwasorwillbefiled,andtheCPSwillusetheAGIforincomeandtodetermineeligibilityfortheSNTand

auto-zeroEFC.Asabove,theforeignincomeisstillreportedasincomeearnedfromwork,butitisalsoaddedtothe

AGIofthetaxfilingspouse,asourguidanceinstructsunderthe“marriedfilingseparately”sectiondescribedearlier

inthischapter.

Insomeinstances,employeesofcertaininternationalorganizations,suchastheUnitedNations,theInternational

MonetaryFund,theWorldBank,andothers,mightnotberequiredtofileareturn,whichresultsinsituationssimilar

tothosedescribedabove.Followthesameguidance—anon-taxfilerwillreportincomefromthatemploymentas

incomeearnedfromworkonly,whileapersonwhoismarriedtoataxfilerwillreportitasincomeearnedfromwork

andaddittotheAGIofthetax-filingspouse.

NotethattheguidanceinthissectiondoesnotpertaintotheForeignEarnedIncomeExclusion,whichisreportedon

theU.S.taxreturnandisexcludedfromtheEFCcalculationbytheHEA.

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Assets(40–42,88–90forparents).Anassetispropertythatthefamilyownsandhasanexchangevalue.The

FAFSAformcollectscurrentdata(asofthedayofsigningtheFAFSAform)aboutcash,savingsandchecking

accounts,investments,businesses,andinvestmentfarms.Mostassetsareinvestmentssuchascollegesavings

plans,Coverdelleducationsavingsaccounts,realestate,installmentandlandsalecontracts(includingmortgages

held),trustfunds,mutualfunds,moneymarketfunds,UniformGiftsandUniformTransferstoMinors(UGMAand

UTMA)accounts,certificatesofdeposit,stocks,stockoptions,bonds,commodities,andpreciousmetals.Iftheasset

isn’tabusinessorinvestmentfarm,itisreportedasaninvestment.

TheFAFSAformasksforthenetworthofinvestments,whichistheirtotalcurrentmarketvalueminustheir

associateddebts.Iftheirnetworthisnegative,zeroshouldbereported.

Similarly,forabusinessorinvestmentfarm,thecurrentnetworth(thecurrentmarketvalueminusthedebt

owedonit)isreportedforland,buildings,machinery,equipment,livestock,andinventories.Businessorfarmdebt

meansonlythosedebtsforwhichthebusinessorfarmwasusedascollateral.

Rentalpropertiesareanasset.Aunitwithinafamilyhomethathasitsownentrance,kitchen,andbath(therefore

arentedbedroomwouldnotcount)andthatisrentedtosomeoneotherthanafamilymembercountsasanasset.

Tocalculateitsnetvalue,multiplythenetvalueoftheentirestructurebythefractiontherentedspacerepresents.

Similarly,ifafamilyowneda10-unitapartmentbuildingandlivedinoneoftheapartments,9/10or90%ofthenet

valueofthebuildingwouldbeanasset.

Attimesastudentorparentwillclaimrentalpropertyasabusiness.Generally,itmustbereportedasrealestate

instead.Arentalpropertywouldhavetobepartofaformallyrecognizedbusinesstobereportedassuch,andit

usuallywouldprovideadditionalserviceslikeregularcleaning,linen,ormaidservice.

VirtualcurrencysuchasBitcoinisconsideredanasset.Ifastudent,student’sspouse,orparent(asapplicable)

holdsBitcoin,theymustreportitsvalueinU.S.dollars(asofthedaytheFAFSAformiscompleted)asanasseton

theFAFSAform.IfthestudentorparentsellsBitcoinandhasacapitalgainfromthesale,thetaxableportionwillend

upintheAGIfortheyearitisreportedonthetaxreturn,andtheAGIwillthenbeincludedontheassociatedFAFSA

form.FormoreinformationonhowtheIRStreatsvirtualcurrencies,pleaseseetheIRSvirtualcurrencywebpage.

UGMAandUTMAaccounts:TheUniformGiftsandUniformTransferstoMinorsActs(UGMAandUTMA)allowthe

establishmentofanaccountforgiftsofcashandfinancialassetsforaminorwithouttheexpenseofcreatingatrust.

Becausetheminoristheowneroftheaccount,itcountsashisorherassetontheFAFSAform,nottheassetofthe

custodian,whoisoftentheparent.

Excludedassets—thefollowingareNOTreportedontheFAFSAForm:

Possessionssuchasacar,astereo,clothes,orfurniture

Afamily’sprincipalplaceofresidence,evenifitispartofabusiness

Afamilyfarm(includingequipment,livestock,etc.)if

itistheprincipalplaceofresidencefortheapplicantandhisorherfamily(spouseor,fordependent

students,parents),and

theapplicant(orparentsofadependentstudent)materiallyparticipatedinthefarmingoperation

Family-ownedandcontrolledsmallbusinesses(whichcanincludefarms)thathave100orfewerfull-time

orfull-timeequivalentemployees.“Family-ownedandcontrolled”meansthatmorethan50%ofthebusinessis

ownedbypersonswhoaredirectlyrelatedorare(orwere)relatedbymarriage.(Familymembersdonothave

tobecountedinthehouseholdsizeforthisquestion.)

RetirementandlifeinsuranceplansandABLEaccounts.AnABLEaccountisatax-advantagedsavings

accountforadisabledpersonandhisorherfamily;itsvaluedoesnotcountasanassetontheFAFSAform.The

valueofretirementplans—401(k)plans,pensionfunds,annuities,noneducationIRAs,Keoghplans,etc.—alsois

notcountedasanasset,butdistributionsdocountasincome;theyappearintheAGIiftaxableandin

Questions44and92ifuntaxed.Similarly,thecashvalueorequityofawholelifeinsurancepolicyisn’treported

asanasset,butaninsurancesettlementdoescountasincome.

Thefullamountofthedistributionisreported,whetheritwasalumpsumorannualdistribution,anditwill

countastaxableoruntaxedincome,asappropriate.Anexceptiontoreportingpensiondistributionsiswhen

theyarerolledoverintoanotherretirementplaninthesametaxyear(rollover).

https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies
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ExcludedassetsforNativeAmericanstudents.Thelaw(seeHEASec.479C)excludesreportingany

incomeandassetof$2,000orlessperindividualpayment(anyamountover$2,000isreportedasuntaxed

income)receivedunderthePerCapitaActortheIndianTribalJudgmentFundsUseorDistributionAct.Italso

excludesanyincomereceivedundertheAlaskaNativeClaimsSettlementActortheMaineIndianClaims

SettlementAct.PercapitadistributionsortheproceedsreceivedfromtheLandBuy-BackProgramforTribal

Nations—atribalpurchaseoffractionatedlandsasaresultoftheCobellsettlementundertheClaimsResolution

Actof2010(42U.S.C.1305)—shouldalsobeexcluded.

Reportingtrustfunds

Trustfundsinthenameofastudent,spouse,orparentshouldbereportedasthatperson’sassetonthe

application,generallyevenifthebeneficiary’saccesstothetrustisrestricted.Ifthesettlorofatrusthas

voluntarilyplacedrestrictionsonitsuse,thenthestudentshouldreportitspresentvalueasanasset,as

discussedbelow.Ifatrusthasbeenrestrictedbycourtorder,however,thestudentshouldnotreportit.An

exampleofsucharestrictedtrustisonesetupbycourtordertopayforfuturesurgeryforthevictimofacar

accident.

Howthetrustmustbereporteddependsonwhetherthestudent(ordependentstudent’sparent)receivesorwill

receivetheinterestincome,thetrustprincipal,orboth.Inthecaseofadivorceorseparationwherethetrustis

ownedjointlyandownershipisnotbeingcontested,thepropertyandthedebtareequallydividedbetweenthe

ownersforreportingpurposesunlessthetermsofthetrustspecifysomeothermethodofdivision.

Interestonly

Ifastudent,spouse,orparentreceivesonlytheinterestfromthetrust,anyinterestreceivedinthebaseyear

mustbereportedasincome.Iftheinterestaccumulatesandisnotpaidout,therecipientmustreportanasset

valuefortheinterestheorshewillreceive.Thetrustofficercanusuallycalculatethevalueoftheinterestthe

personwillreceivewhilethetrustexists.Thisvaluerepresentstheamountathirdpersonwouldbewillingtopay

fortheinterestincome.

Principalonly

Thepersonwhowillreceiveonlythetrustprincipalmustreportasanassetthepresentvalueofhisorherrightto

thatprincipal.Forexample,ifa$10,000principalrevertstoadependentstudent’sparentswhenthetrustendsin

10yearsandthestudentisreceivingtheinterest,heorshewouldreporttheinterestreceivedasincomeand

reportasaparentalassetthepresentvalueofhisorherparents’rightstotheprincipal.Thepresentvalueofthe

principalcanbecalculatedbythetrustofficer;it’stheamountthatathirdpersonwouldpayfortherightto

receivetheprincipal10yearsfromnow—basically,theamountthatonewouldhavetodepositnowtoreceive

$10,000in10years.

Bothprincipalandinterest

Ifastudent,spouse,orparentreceivesboththeinterestandtheprincipalfromthetrust,thestudentshould

reportthepresentvalueofbothinterestandprincipal,asdescribedinthediscussionofprincipalonly.Ifthetrust

issetupsothattheinterestaccumulateswithinthetrustuntilitends,thebeneficiaryshouldreportasanasset

thepresentvalueoftheinterestandprincipalthatheorsheisexpectedtoreceivewhenthetrustends.

Ownershipofanasset

Insomecasestheownershipofanassetisdividedorcontested,whichcanaffecthowthestudentreportsthe

asset.

Partownershipofasset

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Taxableincomeoffsets(43and91).Thesequestionstotalcertaintypesofincomeandothermoniesthatare

excludedfromincomeintheneedanalysis.TheCPSsubtractstheseexcludedamountsfromtheAGIwhen

calculatingtheEFC.

a.Educationtaxcredits.ThesearetheAmericanOpportunityandLifetimeLearningtaxcredits(AOTCand

LLC);theFAFSAformreferstoSchedule3line3onthe1040form.PartoftheAOTCcanberefundable,thatis,

payabletotaxfilerseveniftheydonotoweanyfederalincometax.Thenonrefundablepartappearsonthe

samelinesofthetaxreturnandtheFAFSAformastheLLC.Therefundableportionappearsonline29ofthe

1040form.ItdoesnotappearonthelinesoftheFAFSAformfortheeducationtaxcredits,nordoesitcountas

untaxedincome.

b.Childsupportpayments.Countpaymentsmadeduring2020becauseofdivorce,separation,orlegal

requirementbythestudent,spouse,orparentwhoseincomeisreportedontheFAFSAform.Don’tinclude

supportforchildreninthehousehold.Also,don’tcountchildsupportreceivedforachildinthehouseholdsize;

thatappearsasuntaxedincomeonline44cor92c.

Example:Stevenandhiswifeeachhaveachildfromapreviousrelationshipwhodoesnotlivewiththemand

forwhomtheypaychildsupport.BecauseStevenprovidesoverhalfofhisdaughter’ssupportthroughhis

payments,hecountsherinhishouseholdsize.Therefore,hedoesn’treporttheamountofchildsupporthepays

onhisFAFSAform.Steven’swifeisn’tprovidingoverhalfofherson’ssupport,soheisn’tincludedinSteven’s

householdsize.Therefore,Stevencanreporttheamountofchildsupporthiswifepays.

c.Taxableearningsfromneed-basedworkprograms.ThisincludesearningsfromFederalWork-Studyand

need-basedemploymentportionsoffellowshipsorassistantships.ThestudentusesW-2sorotherrecordsheor

shereceivedforthisincome.

d.Studentgrantandscholarshipaid.Astudentreportsonlytheamountofgrantsandscholarships

receivedthatwasreportedastaxableincomeonthereturn.Thisincludesgrantandscholarship(not

employment)portionsoffellowshipsandassistantships,aswellastaxablestipendsandemployertuition

reimbursements.IncludealsoAmeriCorpsbenefits(awards,livingallowances,andinterestaccrualpayments)

exceptthoseforhealthcareorchildcare.Thefilerusuallywritesthetaxableamountofthegrantorscholarship

separatelyonthetaxformnexttothelinewherewagesandotherearningsarereported.Iftheamountwas

reportedthisway,thestudentcancopyitfromthetaxform.

Reimbursementsandstipends—Employersoftenhelpwitheducationcostsbypayingstipendsor

reimbursingemployeesforclassestaken.Thesebenefitscountasestimatedfinancialassistance(orreducethe

costofattendance)eveniftheyaren’treceiveduntiltheendoftheclass(es)andarecontingentonearninga

Iftheparentorstudenthasonlypartownershipofanasset,thestudentshouldreportonlytheownedpart.

Generally,thevalueofanassetanddebtsagainstitshouldbedividedequallybythenumberofpeoplewhoshare

ownershipunlesstheshareoftheassetisdeterminedbytheamountinvestedorthetermsofthearrangement

specifysomeothermeansofdivision.

Contestedownership

Assetsshouldn’tbereportediftheownershipisbeingcontested.Forinstance,iftheparentsareseparatedand

can’tsellorborrowagainstjointlyownedpropertybecauseit’sbeingcontested,theparentreportingFAFSA

informationwouldnotlistanynetworthfortheproperty.However,iftheownershipofthepropertyisnotbeing

contested,theparentwouldreportthepropertyasanasset.Ifownershipofanassetisresolvedaftertheinitial

applicationisfiled,thestudentcan’tupdatethisinformation.

Lienagainst,andimminentforeclosureof,anasset

Ifthere’salienagainsttheasset,thenetvalueoftheassetisdeterminedbysubtractingfromitstotalvalueany

associateddebtaswellastheamountofthelien.Ifforeclosureofanassetisimminent,thenetvalueoftheasset

wouldstillbereporteduntilthepartymakingtheforeclosurecompleteslegalactiontotakepossessionofthe

asset.Ifthestatusofthepropertychangesaftertheapplicationisfiled,thestudentcan’tupdatetheasset

information.

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minimumgrade.AnytaxableportionreceivedintheprioryearandappearingintheAGIisenteredinQuestion

43or91.

e.Combatpayorspecialcombatpay.EnteronlytheportionthatwasincludedinAGI.Thisshouldbezero

forenlistedpersonsandwarrantofficers(includingcommissionedwarrantofficers)becausetheircombatpayis

entirelynontaxable.Forcommissionedofficersgenerally,combatpayinexcessofthehighestenlistedperson’s

pay(plusimminentdanger/hostilefirepay)istaxable.Todeterminethetaxableamount,findthetotalcombat

payfromtheserviceperson’sleaveandearningsstatementsandsubtracttheuntaxedportion,whichis

reportedinbox12oftheW-2formwithcodeQ.SeeIRSPublication3,ArmedForces’TaxGuide,formore

information.

f.Collegecooperativeeducationprogramearningsfromwork.ThestudentusesW-2sorotherrecords

heorshereceivedfortheseearnings.

Untaxedincome(44and92).Thesequestionstotaltheuntaxedincome,someofwhichisreportedonthetax

formeventhoughitisn’ttaxed.Astudentwhohasn’tfiledareturnwillhavetoestimatetheseamounts,and

studentsorparentsmayneedtoseparateinformationfromajointreturn.

a.Paymentstotax-deferredorshelteredpensionandsavingsplans(paiddirectlyorwithheldfrom

earnings).Thisincludesuntaxedportionsof401(k)and403(b)plans.Thesetypesofpaymentsarelistedin

boxes12athrough12doftheW-2andwillhaveoneofthefollowingcodes:D,E,F,G,H,orS.Notethat

employercontributionstotheseplansshouldn’tbereportedasanuntaxedbenefit.

b.DeductibleIRAorKeoghpayments.PaymentstoanIRAorKeoghplanthatareexcludedfromtaxation

arereportedasuntaxedincome.Theseamountsappearonthe1040formschedule1lines15and19.

c.Childsupportreceivedforallchildren.

d.Tax-exemptinterestincome.Certaintypesofinterest,suchasinterestonmunicipalbonds,aretax-

exempt.Thisamountisonline2aonthe1040form.

e.UntaxedIRAdistributionsandpensionorannuitypayments.Ataxfilerdetermineshowmuchofhisor

herIRAdistributionorpensionorannuitypaymentistaxablewhenheorshecompleteshisorhertaxreturn.

Theapplicantreportstheuntaxedportion,whichisdeterminedfromthetaxreturn,butshouldnotinclude

rollovers(transfersoffundsfromoneIRAtoanother).Theseamountscanbefoundonthe1040form—(lines4a

+5a)minus(lines4b+5b).

f.Housing,food,andotherlivingallowances.Somepeople,suchasclergy,receivetheseallowancesas

compensationfortheirjobs.Moneyreceivedtopayforrentshouldalsobereported,asshouldthefreeuseofa

houseorapartment(therentormarketvalueofacomparablehouseorapartmentcanbeused).Similarly,ifthe

studentreceivedfreeroomorboardin2020forajobthatwasnotawardedasstudentfinancialaid(including

residentadvisorpositionsthatprovidefreeroomandboardaspartofthestudent’snon-need-based

employmentcompensation),heorshemustreportthevalueoftheroomandboardasuntaxedincome.

MembersoftheU.S.militaryreporttheirbasicallowanceforsubsistence(BAS)butnottheirbasicallowancefor

housing(BAH).

g.Veterans’noneducationbenefits.Thisincludesdisability,thedeathpension,DependencyandIndemnity

Compensation(DIC),andVeteransAffairs(VA)educationalwork-studyallowances.

h.Anyotheruntaxedincomenotreportedelsewhere.Thisincludesdisabilitybenefits(butnotSocial

Securitydisability),worker’scompensation,tax-freecontributionstoHSAs(seebelow),interestincomeon

educationIRAs,untaxedportionsofRailroadRetirementbenefits,blacklungbenefits,refugeeassistance,the

untaxedportionofcapitalgains,alimony/maintenancepayments/spousalsupportandforeignincomethat

wasn’ttaxedbyanygovernment,wasn’tearned,andwasn’tpartoftheForeignEarnedIncomeExclusion.

Healthsavingsaccounts(HSAs)resembletax-deferredpensionandsavingsplansmorethanflexible

spendingarrangements.Forexample,thebalanceinanHSApersistsfromyeartoyear,whilethatinaflexible

spendingarrangementmustbespentonqualifiedexpensesbytheendoftheyear.Therefore,treattax-free

contributionstoanHSAasuntaxedincome;thesewillappearonline12ofSchedule1ofForm1040.The

balanceintheaccountdoesnotcountasanasset,norwoulddistributionsfromitcountasuntaxedincome

whentheyareusedforqualifiedmedicalexpenses.Distributionsnotusedforqualifiedexpensesaresubjectto

incometax(andapossiblepenalty)andwillbecountedintheadjustedgrossincome.

Extendedfostercarepayments:Fosterchildrenwhomeetcertaincriteriacanreceivebenefitsuntilage21.

IftheseextendedpaymentsareundertheauthorityofTitleIV,PartE,oftheSocialSecurityAct,theyarenot

reportedontheFAFSAform.Iftheyarepaidundersomeotherauthority,e.g.,astatefosteryouthsupport

Page 19: Application and Verification Guide

program,theyarereportedasuntaxedincometothestudentinQuestion44hofthe2022–2023FAFSAform.

SeeDCLGEN-13-18.

i.Moneyreceived(44only).Thestudentreportsanycashsupportheorshereceived,butifdependentheor

shedoesnotcountsupportreceivedfromhisorherparents,withoneexception:moneyfromanoncustodial

parentthatisnotpartofalegalchildsupportagreementisuntaxedincometothestudent.Cashsupport

includesmoney,gifts,housing,food,clothing,carpaymentsorexpenses,medicalanddentalcare,college

costs,andmoneypaidtosomeoneelseorpaidforonhisorherbehalf.Forexample,ifafriendorrelativepays

astudent’selectricbillorpartofhisorherrent,thestudentmustreporttheamountasuntaxedincome.Ifheor

sheislivingwithafriendwhopaystherentandthestudent’snameisonthelease,therentpaidonhisorher

behalfcountsascashsupportbecausethestudentisresponsibleforpaymentsthathisorherfriendismaking.

Notethatonlythestudentreportsthisitem—itdoesnotappearintheparents’untaxedincomesection.

Tipsonreportingbenefits:Thestudentreportstheactualamountofbenefitsreceivedduringtheyear,evenifit

isanunderpaymentoranoverpaymentthatwillbecorrectedinthenextyear.However,iftheunderpaymentor

overpaymentwasadjustedinthesameyear,onlythenetamountreceivedduringthatyearwouldbereported.

BenefitsthestudentorparentsreceiveonbehalfofanyoneincludedintheirFAFSAhouseholdsizecountasincome

tothemunlessthepersonisanadult(notachild),e.g.,agrandmother,whoreceivesthebenefitsinhername.Such

apersonisnotincludedinthehouseholdsizeifbenefitsinhernametotalmorethanhalfofhersupport.

Box14itemsontheW-2:Schoolsarenotrequiredtoreviewincomelistedinbox14oftheIRS’sW-2form.There

areafewreasonsforthis.SeveraloftheitemstheIRSsuggestscouldbereportedinbox14arecapturedalreadyon

theFAFSAform(inadjustedgrossincomeforinstance);also,employerscouldincludeinbox14certainnonelective

pensionplancontributions,andnonelectivecontributionsshouldnotbecountedintheneedanalysis.Finally,

becausenoemployerisrequiredtoprovideinformationinbox14,itisunlikelythatemployerswillbeconsistentin

whattheyreportthere.Butifyouareawarethatabox14itemshouldbereported—i.e.,ifitrepresentsdiscretionary

income—youshouldcountitonthepertinentline.Forexample,clergyparsonageallowancesoftenappearinbox14,

andyouwouldcountthatonlinefofQuestion44or92.

IncomeandbenefitsNOTtobeincluded:

**Studentaid**isaccountedforinpackaging(seeVolume3:CalculatingAwardsandPackaging);itdoesnot

countasincomeinthecalculationoftheEFC.Studentaidincludestuitionbenefitsaparentreceivesfora

dependent,suchasthosefromtheparent’semployer.StudentaidthatwasincludedintheAGIisreported

separatelyontheFAFSAformasanexclusionsothatitcanbesubtractedfromincome(43dand91d).

Veterans’educationbenefits.AppendixAinChapter7ofVolume3for2022–2023hasthelistofexcluded

benefits.SeealsothepertinentAugust13,2009electronicannouncement.

Thevalueofon-basehousingortheBAHforstudentsorparentsintheU.S.military.However,theBASdoes

countasuntaxedincome.

Rentsubsidiesforlow-incomehousing.

Paymentsandservicesreceivedfromstatesforfostercareoradoptionassistance,underPartAor

PartEofTitleIVoftheSocialSecurityAct(e.g.,Wisconsin’sAdoptionAssistanceProgram,whichfacilitatesthe

adoptionofchildrenwithspecialneeds).

PercapitapaymentstoNativeAmericans.See“Assets”sectionearlierinthischapter.

Heating/fuelassistance.ThisincludespaymentsorallowancesreceivedundertheLow-IncomeHomeEnergy

AssistanceAct(LIHEA).PaymentsundertheLIHEAaremadethroughstateprogramsthatmayhavedifferent

names.

Flexiblespendingarrangements.Theseareemployeebenefitprograms,sometimescalled“cafeteriaplans.”

Neithercontributionstonorpaymentsfromtheseprogramsshouldcountasuntaxedincome.

Welfarebenefits,untaxedSocialSecuritybenefits,andtheearnedincomeandadditionalchildtax

credits.Welfarebenefitsaremeans-testedstateorfederalsupplementaryassistance.Examplesarebenefits

fromMedicaid(includingtheChildren’sHealthInsuranceProgram),theSupplementalNutritionAssistance

Program(SNAP),andTemporaryAssistanceforNeedyFamilies(TANF).

Combatpay,ForeignEarnedIncomeExclusion,andcreditforfederaltaxonspecialfuels.

In-kindsupportissupportotherthanmoney,forexample,friendsorrelativesgivingthestudentfoodor

allowinghimorhertolivewiththemrent-free.Thatsupportisn’tincludedasuntaxedincome,thoughyoumay

useprofessionaljudgment(e.g.,byreducingthecostofattendanceorincreasingincome)withstudentswho

https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2013-07-03/gen-13-18-subject-extended-foster-care-payments
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2009-08-13/general-subject-guidance-federal-veterans-education-benefits-purposes-title-iv-student-assistance-programs
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receivesuchin-kindsupport.Thisisnotthesameashousingandotherallowancesreceivedascompensation

forajob,which,asstatedearlier,mustbereported.Ifthestudentislivingwithsomeonewhoispayingliving

expenses,itcanbedifficulttodeterminewhetherthesupportiscashsupportorin-kindsupport.Thebasicrule

is:ifsomeonepaysacostthestudentisobligatedtopay,theamountcountsascashsupport.

Example:Independentstudentwithparentalsupport

Dougisagraduatestudent,sohe’sindependenteventhoughhestillliveswithhisparentsandhasnoincome

ofhisown.AlthoughtheFAAathisschoolcan’tmakehimadependentstudent,theFAAcandecidetouse

professionaljudgmenttoaddanamounttohisuntaxedincometoaccountforthein-kindsupporthisparents

provide.

StepThree:DependencyStatus

Purpose:ThelawgoverningtheFSAprogramsisbasedonthepremisethatthefamilyisthefirstsourceofthestudent’s

support,andthelawprovidesseveralcriteriathatdecideifthestudentisconsideredindependentofhisorherparentsfor

aideligibility.Notethatastudentreachingtheageof18or21orlivingapartfromhisorherparentsdoesnotaffecthis

dependencystatus.Forthe2022–2023year,astudentwhomeetsanyofthefollowingcriteriafromHEASec.480(d)is

independent—ifheorshe:

wasbornbeforeJanuary1,1999;

ismarriedasofthedateheorsheapplies;

willbeagraduateorprofessionalstudentwhentheawardyearstarts;

iscurrentlyservingonactivedutyforpurposesotherthantraining;

isaveteranoftheU.S.ArmedForces;

hasdependentsotherthanaspouse;

wasanorphan,fosterchild,orward/dependentofthecourtatanytimesincetheageof13;

isanemancipatedminororinlegalguardianshiporwaswhenthestudentreachedtheageofmajorityinhisorher

state;or

wasdeterminedatanytimesinceJuly1,2021,tobeanunaccompaniedyouthwhowashomelessorself-supporting

andatriskofbeinghomeless.

Ifastudentisconsideredadependentofhisorherparents,theparents'incomeandassetsmustbeincludedonthe

FAFSAform.TheCPSwillcalculateaparentcontributionandaddittothestudent’scontributiontoderiveanEFC.

Inunusualcasesanaidadministratorcandeterminethatastudentwhodoesn’tmeetanyoftheindependencecriteria

shouldstillbetreatedasanindependentstudent.(See“DependencyOverrides”inChapter5.)

Example:Survivingparentandstepparent

Al’sparentsdivorcedwhenhewasfive.Hismotherremarried,andAllivedwithherandhisstepfather,whodidnotadopt

him.Hismotherdiedlastyear,buthisfatherisstillliving.Aldoesn’tmeetanyoftheindependencecriteria,sohe’sa

dependentstudent.Becausehisfatherishisonlyparent,Alneedstoreporthisfather’sinformationontheFAFSAform,

eventhoughhe’sstilllivingwithandbeingsupportedbyhisstepfather.

Example:Studentlivingwithrelatives

Millie’sfatherisdead,andhermothercan’tsupporther,sosheislivingwithhergrandmother.Hermotherdoesn’tpay

anymoneyforhersupport.Milliedoesn’tmeetanyoftheindependencecriteria,soshehastoprovideparental

information.Becausehergrandmotherhasn’tadoptedher,hergrandmotherisn’therparent.Milliewillhavetoprovide

informationabouthermotherontheformunlessthereareunusualcircumstancesthatwouldwarrantadependency

overrideorherreceivingonlyunsubsidizedloans.Inanycase,theschoolmightusePJtoaccountforthegrandmother’s

support.

WhodoesanddoesnotcountasaparentontheFAFSAform?

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Married(46).ThestudentmustanswerthisquestionaccordingtohisorhermaritalstatusatthetimetheFAFSA

formissigned;afterthat,thestudentcannotupdateFAFSAinformationforchangesinhisorhermaritalstatus

Iftheapplicantanswers“No”toquestions45–57,thenheorsheisdependentandmustreportparental

informationinStep4ontheFAFSAform.Inmostcasesit’sclearwhotheparentsarebutnotalways.

Count:Biological,adoptive,andstepparents

Aparentisabiologicaloradoptiveparentorapersonthatthestatehasdeterminedtobeaparent(forexample,

whenastateallowsanotherperson’snametobelistedasaparentonabirthcertificate).Astepparentis

consideredaparentifmarriedtoabiologicaloradoptiveparentandifthestudentcountsintheirhouseholdsize.

Biologicalandadoptive(whetheroftheoppositeorsamesex)parentswhoareunmarriedandlivingtogethergive

thatastheirstatusinQuestion58,andbothreporttheirinformationontheFAFSAform.SeeDCLGEN-13-12.

However,astepparentwhodidnotadoptthestudentcannotbethesoleparentfordeterminingdependency

status.Iftheotherparentdies,thestudentisstilladependentoftheremainingbiologicalparent,notthe

stepparent.Ifnobiologicalparentremains,thestudentanswers“Yes”toQuestion52andisindependent.

Donotcount:Fosterparents,legalguardians,andrelatives

AfosterparentoralegalguardianisnottreatedasaparentforFSApurposes.Ifatanytimesincetheageof13

bothofthestudent’sparentsweredead(andheorshedidnothaveanadoptiveparentatthattime)orthe

studentwasinfostercare,heorsheisindependent.Ifthestudentisnow,orwaswhenheorshebecamean

adult,anemancipatedminororinlegalguardianship(seetheexceptionsunderQuestion54),thestudentis

independent.

Ifastudentislivingwithhisorhergrandparentsorotherrelatives,theirdatashouldnotbereportedontheFAFSA

formasparentaldataunlesstheyhaveadoptedthestudent.Anycashsupportfrompersonsotherthanthe

student’sparentsshouldbereportedasuntaxedincome,asdiscussedinStep2.Theschoolmayalsoconsider

otherkindsofsupportaspartofthestudent’sfinancialresourcesanduseprofessionaljudgmenttoincludethe

supportundertheitemforstudent’suntaxedincome(seeChapter5onprofessionaljudgment).

Othersourcesofsupportforchildrenandotherhouseholdmembers

Ifthestudentisreceivingsupporttoraisehisorherchild,isthechildstillconsideredalegaldependent?Ifoneor

bothofthestudent’sparentsaredirectlyorindirectlyprovidingmorethan50%supportincashorother

assistancetothechild,thenthestudentwouldanswer“No”totheFAFSAquestionaboutlegaldependents.

“Indirectsupport”tothechildincludessupportthataparentgivestothestudentonbehalfofthechild.Ifthe

studentislivingwithaparentwhoispayingformostofthehouseholdexpenses,theparentwouldusuallybe

consideredtheprimarysourceofsupporttothechild,andthestudentwouldanswer“No”tothequestionabout

legaldependents.However,theremaybesomecaseswherethestudentcandemonstratethatheorsheprovides

morethanhalfoftheirchild’ssupportevenwhilelivingathome,inwhichcaseheorshewouldanswer“Yes”to

thequestionaboutlegaldependents.

Whenthestudentreceivesmoneyforthechildfromanysourceotherthanhisorherparents,thestudentmay

countitaspartofhisorhersupporttothechild.Sourcesincludechildsupportandgovernmentprograms,suchas

TANFandSNAP(formerlythefederalFoodStampProgram),thatprovidebenefitsfordependentchildren.Soa

studentmaybeconsideredindependentwhenthebenefitheorshereceivesistheprimarysupportforherchild.

Forexample,ifastudentwholivesalonewithherchildreceivescashfromherboyfriendthatamountstomore

than50%supportforthechild,thenshewouldbeabletocountthechildasadependentandinherhousehold

size,andshewouldbeindependent.Iftheboyfriendisthefatherofthechildandastudenthimself,thenhe

wouldalsobeabletocountthechildasadependentandinhishouseholdsize,andhewouldbeindependenttoo.

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exceptinlimitedinstances;seeChapter4.

Astudentwhoisonlyengagedanswersasunmarriedunlessheorshewaitsuntilaftertheweddingtocompletethe

FAFSAform.Forthisquestionastudentisconsideredmarriedifheorsheisseparatedorplanningtodivorceorifhe

orshehasarelationshipthatmeetsthecriteriaforcommon-lawmarriageintheirstate.Astudentwhowas

independentonlybecauseheorshewasmarriedbecomesdependentforthenextawardyearifheorshedivorces

andcannotanswer“Yes”toanyofthedependencyquestions.

Graduateorprofessionalstudy(47).TheFAFSAformasksifthestudentwillbeworkingonamaster’s,

doctorate,orgraduatecertificateprogramatthebeginningoftheschoolyear.Astudentwhoisagraduateor

professionalstudentisindependentforpurposesofTitleIVaid.

GraduateandprofessionalstudentsarenoteligibleforPellgrants,soastudentwhoincorrectlyanswers“Yes”tothis

questionmustsubmitacorrectionbeforeheorshecangetaPellgrant,evenifheorsheisindependentforanother

reason.

StudentsshouldfillouttheFAFSAformbasedontheirexpectedgradelevelatthebeginningoftheawardyear.Ifa

dependentstudentcompleteshisorherundergraduateprogramduringtheyearandbeginsgraduateschool,heor

shecanupdatetheanswertothedependencyquestionsothattheCPScanreprocessthestudent’sapplication,or

theaidadministratoratthegraduateschoolcanrecalculatehisorherEFCanduseittopackagethestudent

graduateaid.

MemberorveteranoftheU.S.ArmedForces(48and49).

VeteransandpersonsonactivedutyintheU.S.ArmedForces(theArmy,Navy,AirForce,Marines,orCoastGuard)

forpurposesotherthantrainingareindependent.

Veteransarethosewhowereinactiveserviceandwerereleasedunderaconditionotherthan“dishonorable.”This

includesthosewhofraudulentlyenteredtheservice,aslongastheirentireperiodofservicewasnotvoided.Thereis

nominimumamountoftimethestudenthastohaveservedtobeaveteran—evenonedaycountsandevenbasic

training(bootcamp)counts—butitdoeshavetobeactiveservice.(Seethefollowingrulesforreservists.)Thisisless

stringentthantheVA’sdefinitionofaveteranforreceivingcertainVAbenefits.

TheFAFSAformalsotellsstudentstoanswer“Yes”tothequestionaboutveteranstatusiftheyaren’tyetaveteran

butwillbebyJune30,2023.

MembersoftheNationalGuardorReservesareonlyconsideredveteransiftheywerecalleduptoactivefederal

duty[asdefinedin10U.S.C.101(d)(1)]bypresidentialorderforapurposeotherthantraining.Itdoesnotmatter

howlongtheactivedutylastedorifthestudentreturnedtoreservestatusafterward,but,aswiththeother

qualifyingveterans,thestudentmusthavehadacharacterofservicethatwasnot“dishonorable.”

StudentswhoattendedaU.S.militaryacademyormilitaryacademypreparatoryschoolforatleastoneday

andwerereleasedunderconditionsotherthan“dishonorable”countasveteransforTitleIVpurposes.Iftheyare

dischargedpriortocommission(knownas“earlyexitcadets”),theymightnotbeveteransforVApurposes,andtheir

matchresultwilllikelyshowthattheyaren’tveterans.Aswithotherstudentswhoreceivethisresult,ifanearlyexit

cadetmeetsoneoftheothercriteriaforindependence,noresolutionisrequired.Butifheorshemeetsnoother

independencecriteria,thestudentmustprovidetheschoolwithdocumentationthatshowsheorshewasacadetof

amilitaryacademyoritspreparatoryschoolandwasreleasedunderaconditionotherthandishonorable.Students

servinginROTCorcurrentlyattendingaU.S.militaryacademyarenotveterans.

Militaryserviceacademiesandpreparatoryschools:

U.S.MilitaryAcademy(WestPoint)

U.S.NavalAcademy(Annapolis)

U.S.AirForceAcademy

U.S.CoastGuardAcademy

U.S.MerchantMarineAcademy

U.S.MilitaryAcademyPreparatorySchool

NavalAcademyPreparatorySchool

U.S.AirForceAcademyPreparatorySchool

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Veteranmatch(forQuestion49)

Ifthestudentanswers“Yes”tothequestionaboutveteranstatus,theCPSperformsamatchwithVArecordsto

confirmthatstatus.TheVAsendstheresultback,whichappearsasamatchflagintheFAAInformationsectionof

theoutputdocument.Forflags2,3,and4,acommentandaCflagwillappearontheSARonlyifveteranstatusis

thesolereasonthatthestudentwouldbeindependent.Seethe2022-2023SARCommentCodesandTextGuide

ontheKnowledgeCenter.

Successfulmatch(matchflag1)

Therewon’tbeanycommentsontheoutputdocumentiftheVAconfirmsthatthestudentisaveteran.

Notaveteran(matchflag2)

AstudentwillreceivethisflagiftheVAdatabaseindicatesheorsheisnotaveteran.Ifthestudentanswered

“Yes”tooneoftheotherdependencyquestions,thestudentisindependentbasedonthatquestionandcan

receivestudentaidwithoutresolvingtheirveteranstatus.

Ifthestudentanswered“No”toalltheotherdependencyquestionsandheorshebelievestheyareaqualifying

veteran,thestudentshouldprovidethefinancialaidofficeathisorherschoolacopyoftheirDD214(the

CertificateofReleaseorDischargefromActiveDuty,with“CharacterofService”asanythingbut“dishonorable”).

Ifitshowsthatthestudentisaveteran,heorshecanreceiveaidasanindependentstudent.Adependency

overrideisnotnecessarybecausetheCPSacceptsthestudent's“Yes”answertotheveteranquestion.Ifa

NationalGuardsmanorareservistwhoservedonactiveduty(forotherthantraining)didnotreceiveaDD214but

canobtainaletterfromasuperiorofficerthatdocumentsthecall-uptoactivedutyandthatclassifiesthe

characterofserviceasanythingbut“dishonorable,”thestudentwillbeconsideredaveteranforFSApurposes.If

thestudentturnsoutnottobeaveteran,heorshewillneedtochangehisorheranswertothequestionfrom

“Yes”to“No”andprovideparentinformation,includingaparent’ssignature.

IftheVAmatchproblemisduetoanerrorintheVA’sdatabase,thestudentshouldcontacttheVAandcorrectthe

error.AsubsequenttransactionwillthenredothematchwiththeVA.

Notindatabase(matchflag3)

MuchoftheguidanceaboveappliesforstudentsnotintheVAdatabase:ifthestudentisindependentfora

reasonotherthanbeingaveteran,heorshedoesn’tneedtoresolvetheproblembeforereceivingstudentaid,

althoughthestudentshouldhavetheVAcorrectitsdatabaseifit’swrong.Ifthestudentanswered“No”tothe

otherdependencyquestions,heorshemusteithercorrectanyproblemwiththeVA,providedocumentation

showingheorsheisaveteranorwillbeonebyJune30,2023,or,ifheorsheisnotaveteranandwillnotbeone

bythatdate,provideparentdataandchangetheirresponsetothequestionfrom“Yes”to“No.”

Activeduty(matchflag4)

Ifthestudentiscurrentlyonactiveduty,heorsheisn’taveteranyet,butifhisorheractivedutywillendbyJune

30,2023,heorshecountsasaveteranfordependencystatus.Becausethestudentshouldhaveanswered“Yes”

totheactivedutyquestion,heorshewouldbeindependentbythatcriterionandwouldn’thavetoresolvethis

situation.

Documentationoffosteryouth(forQuestion52)

Ifyouhavecausetorequiredocumentationfromstudentswhoindicatethattheywereinfostercaresinceturning

13,thefollowingareexamplesofdocumentsthatcouldattestthestudent’sformerfosteryouthstatus:acopyof

acourtorder;thestatementofastateorcountychildwelfareagency;thestatementofaprivateprovideragency

thatdeliverschildwelfareservices;orthestatementfromanattorney,guardianadlitem,orcourt-appointed

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Childrenandlegaldependents(50and51).Studentswhohavelegaldependentsareindependent.Legal

dependentscomprisechildren(includingthosewhowillbebornbeforetheendoftheawardyear)ofthestudentwho

receivemorethanhalftheirsupportfromthestudent,andotherpersons(exceptaspouse)wholivewithandreceive

morethanhalftheirsupportfromthestudentasoftheFAFSAsigningdateandwillcontinuetodosofortheaward

year.Thesamecriteriaapplytohouseholdsize.

Whenastudentappliesaftertheawardyearhasbegun,inordertocountapersonwhoisnotthestudent'schildasa

dependent,thesupportalreadygiventhatyearplusthefuturesupportmusttotalmorethan50percentforthe

wholeyear.SeeExample4below.

Legaldependentexamples

Example1:Stanislaw’suncleYvorliveswithhimandreceivesasmalldisabilitypaymenteachmonth.Thisamount

ispaiddirectlytoYvor,soStanislawdoesn’treportitasincomeontheFAFSAform.Thepaymentissmallenough

thatStanislawisstillprovidingmorethanhalfofYvor’ssupport,andbecauseheexpectstocontinuetoprovidemore

thanhalfsupportduringtheawardyear,heincludesYvorasadependentinhishouseholdsize.However,Yvor

expectstoalsostartreceivingapensionlatenextyear.Thecombinationofthepensionandthedisabilitypayment

willbeenoughthatStanislawwon’tbeprovidingmorethanhalfofhisuncle’ssupportandthereforewon’tbeableto

includeYvorinhishouseholdsizeafterthisawardyear.

Example2:LaurelisgoingtocollegeandishercousinPaul’slegalguardian.PaulreceivesSocialSecuritybenefits,

butbecausehe’saminor,thebenefitsarepaidtoLaurelonhisbehalf.Thesebenefitsprovidemorethanhalfof

Paul’ssupport.BecausePaulliveswithLaurelandwillbesupportedbyher(throughtheSocialSecuritybenefits)

throughouttheawardyear,Laurelanswers“Yes”tothelegaldependentquestion.IfPauldidn’tlivewithLaurel,she

wouldhavetoanswer“No”tothequestion.

Example3:Alanpays$4,000tosupporthisgirlfriend,Cathy,wholiveswithhim.Shehasearnedincomeof$3,000,

andshereceives$200amonth($2,400ayear)fromherparents.Sheusesallofthisforhersupport.Alancannot

considerCathyadependentsincethe$4,000heprovidesisnotmorethanhalfofhertotalsupportof$9,400.

Example4:InApril2022Anikaappliesforaidforboth2021–2022and2022–2023awardyears.Onemonthpriorto

that,hercousinBettinacametolivewithher.EventhoughAnikaprovidesallofhercousin’ssupport,themonthof

supportshehasgivenplusthetwomonthsleftintheawardyearwouldnotamounttomorethan50%for2021–

2022,soshecan’tconsiderBettinaherdependentforthatyear.IfBettinahadmovedinbeforethemidpointofthe

year,Anikawouldhavebeenabletocountherasadependentfor2021–2022.However,becausethetwoplantolive

togetheratleastthroughJune2023,AnikacancountBettinaasadependentfor2022–2023.

Orphan,fosterchild,orwardofthecourt(52).Astudentwhowasanorphan—bothhisorherparentswere

dead—when13orolderisindependentevenifthestudentwassubsequentlyadopted.Likewise,astudentwhowas

atanytimesincetheageof13afosterchildorawardofthecourtisindependentevenifhisorherstatus

changedlater.

Astudentisawardofthecourtifithasassumedlegalcustodyofthestudent.Insomestatesthecourtmayimpose

itsauthorityoverajuvenilewhoremainsinthelegalcustodyofhisorherparents;suchastudentisnotawardof

thecourt.Also,incarcerationofastudentdoesnotqualifythestudentasawardofthecourt.Insomestatesthe

phrase“wardofthestate”isused;aslongasitisnotduetoincarceration,thisisconsideredthesameasawardof

thecourtfordependencystatus.

Emancipationandlegalguardianship(53and54).Studentsareindependentiftheyare,orwereuponreaching

theageofmajority,emancipatedminors(releasedfromcontroloftheirparentorguardian)orinlegalguardianship,

bothasadjudicatedbyacourtofcompetentjurisdictionintheirstateoflegalresidenceatthetimeofthe

adjudication.Theemancipationmustbedeterminedbyacourt,notbyanattorney,thoughthebasisforitcanvary

bystate.

Studentsplacedinlegalguardianshiptotheirparents—e.g.,iftheyaredisabledadultsandundertheirparents’care

—arenotindependentforTitleIVprogrampurposesbythiscriterionandwouldanswer“No”toQuestion54.

Similarly,guardianshipofaperson’sestatedoesnotqualifyasalegalguardianshipforthispurpose;theFAFSAform

specialadvocatedocumentingtheperson’srelationshiptothestudentaswellasthelatter’sfosteryouthstatus.

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asks,“Doessomeoneotherthanyourparentorstepparenthavelegalguardianshipofyou”—i.e.,thestudent,nothis

orherestate.Sostudentswouldanswer“No”tothequestionifanotherpersonhasonlybeenappointedguardianof

theirestate.Theyshouldalsoanswer“No”andcontactyourschoolifcustodywasawardedbyacourtandthecourt

paperssay“custody”insteadof“guardianship.”Moststateshaveacleardefinitionoflegalguardianshipthatis

distinctfromcustody,butifagivenstatedoesnot,askyourschool’slegalcounselforhelpwiththisquestion.

Unaccompaniedhomelessyouth(55–57).AstudentisindependentifatanytimeonorafterJuly1,2021

(irrespectiveofwhetherheorsheiscurrentlyhomelessoratriskthereof),thestudentisdeterminedtobean

unaccompaniedyouthwhoishomelessorisself-supportingandatriskofbeinghomeless.Thisdeterminationcanbe

madeby:aschooldistricthomelessliaison,thedirector(ordesignee)ofanemergencyshelterortransitionalhousing

programfundedbytheU.S.DepartmentofHousingandUrbanDevelopment,orthedirector(ordesignee)ofa

runawayorhomelessyouthbasiccenterortransitionallivingprogram.Dependingonthedistrict,theseauthorities

maychoosetomakethisdeterminationonlyifthestudentisreceivingtheirprograms’servicesorif,inthecaseofa

schooldistricthomelessliaison,thestudentisinhighschool.AnFAAmayalsodeterminethis;seeChapter5.

Studentswhoare22or23yearsold,thoughnotdefinedasyouthintheMcKinney-VentoAct,mayalsoanswer“Yes”

tothesequestions.

StepFour:Parents’Information(DependentStudentsOnly)

Purpose:Questions58–78collectinformationaboutthestudent’sparentsandtheirhousehold.Questions79–92collect

taxandfinancialdatafortheparents,andbecausethesequestionsareansweredinthesamewayasforthestudent,

theywerediscussedearlier.

Parents’personalinformation(58–68).TheFAFSAformasksforparents’maritalstatus;themonthandyear

theyweremarried,remarried,separated,divorced,orwidowed;SSN;lastname;firstinitial;anddateofbirth.This

dataisusedfortheIRSDRTandhelpsthegovernmentestimateerroneousPellpayments.IftheSSN,lastname,and

birthdateforatleastoneparentarenotgiven,orifneitherparent’sSSNmatcheswiththeSSA,theapplicationwill

berejected.WhentheSSNdoesn’tmatch,thewrongnumbermustbecorrectedsothattheapplicationandSSA

agree.Foranameorbirthdatethatdoesn’tmatch,correcttheapplicationifit’swrongorre-entertheinformationif

it’scorrect.Iftheparentdoesn’thaveanSSN,enterallzeros(000-00-0000)topreventorremovearejectcode.Do

notuseanindividualtaxpayeridentificationnumberasanSSN.

Parents’stateofresidence(69–71).ParentswhodonotliveintheUnitedStatesshouldenter“FC”forQuestion

69.

Householdsize(72).ThisdeterminesthestandardlivingallowancethatoffsetsfamilyincomeintheEFC

calculation.Thefollowingpersonscountinthehouseholdsizeofadependentstudent’sparents:

Thestudentandparents,evenifthestudentisnotlivingwiththem.Excludeaparentwhohasdiedorisnot

livinginthehouseholdbecauseofseparationordivorce,butincludeaparentwhoisonactivedutyintheU.S.

ArmedForcesapartfromthefamily.

Thestudent’ssiblingsandchildren,iftheywillreceivemorethanhalftheirsupportfromthestudent’s

parent(s)fromJuly1,2022,throughJune30,2023.Siblingsneednotliveinthehome.Thisincludesunborn

childrenandsiblingsofthestudentwhowillreceivemorethanhalfsupportfromthestudent’sparent(s)from

birthtotheendoftheawardyear.Italsoincludessiblingswhowouldbeconsidereddependentbasedonthe

FAFSAdependencyquestions(i.e.,theyneednotbestudentsnorapplyforaid).

Forchildreninthehouseholdsize,the“supporttest”isusedratherthanresidencybecausetheremaybe

situationsinwhichaparentsupportsachildwhodoesnotlivewithhimorher,suchaswhentheparentis

divorcedorseparated.Iftheparentreceivesbenefits(suchasSocialSecuritypayments)inthechild’sname,

thesebenefitsmustbecountedasparentalsupportforthechild.

Otherpersonswholivewithandreceivemorethanhalftheirsupportfromthestudent’sparent(s)andwill

receivemorethanhalfsupportfortheentireawardyear.Whentheapplicationissubmittedafterthestartof

theyear,seetherelevantparagraphandexampleaboutlegaldependentsprovidedearlierinthischapterunder

the“Childrenandlegaldependents”section.

Example:Lydiaisadependentstudent,andherparentsaremarried.HerbrotherRonis26,buthisparentsstill

providemorethan50%ofhissupport,soheisincludedinthehouseholdsize.HersisterElizabethisattending

collegebutisanindependentstudentandisn’tsupportedbytheirparents,sosheisn’tincludedinthehousehold

size.HersisterSusanisnotattendingcollegebutisworkingandsupportingherself.However,ifSusanweretoapply

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forstudentaid,shewouldbeconsideredadependentstudent,sosheisincluded.Therefore,thehouseholdsizethat

Lydiareportsforherparentsisfive.

Fosterchildreninhouseholdsize:Typicallyfosterchildrendonotcountinthehouseholdsizeastheircostsare

coveredbyfostercarepayments.However,childrenin“kinshipfostercare”forwhomnobenefitsareprovidedcan

countinthehouseholdsizeiftheymeetthetestsforotherpersons,i.e.,iftheylivewithandreceivemorethanhalf

theirsupportfromtheirfosterparentsfortheawardyear.

NotethattherulesthatdecidewhethersomeoneiscountedinthehouseholdforFSApurposesaren’tidenticaltothe

IRSrulesfordeterminingdependentsorhouseholdmembers.

Reportinginformationincasesofdeath,separation,divorce,andremarriage

Deathofaparent

Ifone,butnotboth,ofthestudent’sparentshasdied,thestudentanswerstheparentalquestionsaboutthe

survivingbiologicaloradoptiveparentanddoesnotreportanyfinancialinformationforthedeceasedparent.If

bothparentsaredeadwhenthestudentcompletestheFAFSAform,heorshemustanswer“Yes”toQuestion52,

makinghimorherindependent.Rememberthatanadoptiveparentcountsasaparent,butalegalguardiandoes

not.IfthesurvivingparentdiesaftertheFAFSAformhasbeenfiled,thestudentmustupdatehisorher

dependencystatusandreportincomeandassetsasanindependentstudent.

Stepparent

Astepparentistreatedlikeabiologicalparentifthestepparenthaslegallyadoptedthestudentorifthe

stepparentismarried,asofthedateofapplication,toastudent’sbiologicaloradoptiveparentwhoseinformation

willbereportedontheFAFSAform.Therearenoexceptions.Aprenuptialagreementdoesnotexemptthe

stepparentfromprovidinginformationrequiredofaparentontheFAFSAapplication.Thestepparent’sincome

informationfortheentirebaseyear,2020,mustbereportedeveniftheparentandstepparentwerenotmarried

untilafter2020.Seeaboveforhowtofillouttheparentquestionswhenthestepparent’sspouse(thebiological

parent)dies;ifthestepparenthasnotadoptedthestudent,heorshewouldnolongerprovideparental

informationasbefore,butanyfinancialsupporttheygivetothestudentwouldbecountedasuntaxedincome.

Divorceofthestudent’sparents

Ifthestudent’sparentsaredivorced,heorsheshouldreporttheinformationoftheparentwithwhomtheylived

withlongerduringthe12monthspriortothedateheorshecompletestheapplication.Ifthestudentlivedequally

witheachparentordidnotlivewitheitherone,thenheorsheshouldprovidetheinformationfortheparentfrom

whomheorshereceivedmorefinancialsupportortheonefromwhomheorshereceivedmoresupportthelast

calendaryearforwhichitwasgiven.Notethatitisnottypicalthatastudentwilllivewithorreceivesupportfrom

bothparentsexactlyequally.Usuallyyoucandeterminethatthestudentlivedwithoneoftheparentsmorethan

halftheyearorthatheorshereceivedmorethanhalfsupportfromoneoftheparents.Example:Martais22and

doesn’tmeetanyoftheindependencecriteria.Herparentsdivorcedrecently,andshehasnotlivedwiththem

sinceshewas18.Also,neitherparentprovidedsupportinthepastyear.Thelasttimeshereceivedsupportfrom

herparentswaswhenshelivedwiththemandtheywerestillmarried.Becauseherfather’sincomewaslarger

andhecontributedmoremoneytotheoverallhouseholdexpenses,Martadeterminesthatthelasttimeshe

receivedsupport,mostofitwasfromherfather.SheprovideshisdataontheFAFSAform.

Ifbiologicaloradoptiveparentswhoaredivorcedstilllivetogether,theirstatusisunmarriedandlivingtogether

andbothwouldreporttheirinformationontheFAFSAform;see“Whodoesanddoesnotcountasaparentonthe

FAFSAform”sectionearlierinthischapterformoreinformation.Ifoneorbothofthemhavemarriedsomeone

elseandallliveinthesamehousehold(andpresumablythestudentlivedwithbothparentsanequalamountof

time),theparentandstepparent,ifapplicable,whoprovidedmoresupportinthepreviousyearwouldinclude

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Numberincollege(73).Theapplicantalwayscountsinthenumberincollege,butparentsdonot.Others

includedinthehouseholdsizearealsoincludedinthenumberincollegeiftheyareorwillbeenrolledatleasthalf

timeduringtheawardyearinanyeligibledegreeorcertificateprogramataschooleligibleforanyoftheFSA

programs.Thedefinitionofhalf-timeenrollmentforthisquestionmustmeetthefederalrequirementsevenifthe

schooldefineshalftimedifferently.(SeeVolume1:StudentEligibilityforenrollmentstatusrequirements.)

Serviceacademies,householdsize,andnumberincollege

StudentsatU.S.serviceacademieshavemostoftheireducationalexpensespaidforbythefederalgovernment.

Becauseofthis,theirfamiliescannot“reasonablybeexpectedtocontributetotheirpostsecondaryeducation”and

theyarenotcountedinthenumberincollegeinthefamiliesofeitherdependentorindependentstudents.Since

theywillnotreceivemorethanone-halfoftheirsupportfromanyperson,theyalsodonotcountinthehousehold

sizeofanyindependentstudentsandsomedependentstudents.However,ifaserviceacademyattendeeisasibling

ofadependentstudentandcananswer“No”toallthedependencystatusquestions,heorshewouldcountinthe

householdsizeofthatdependentstudent.[HEASec.474(b)(3);480(k),(l)]

Receiptofmeans-testedfederalbenefitsbyanyoneinthehousehold(74–78).Thisasanalternativeforthe

taxreturnrequirementofthesimplifiedneedsandautomaticzeroEFCtests.

Taxformsfiledbyparents,filingstatus,income,andassets(79–82,84–92).Refertotheearlierdiscussion

forthesequestions.

Dislocatedworker(83).Thisstatus,asdefinedintheWorkforceIn-novationandOpportunityActorWIOA,isan

alternativetothetaxreturnandmeans-testedfederalbenefitscriteriafordeterminingifapersonqualifiesforthe

simplifiedneedstestorautomaticzeroEFC.Apersonwouldanswer“Yes”tothisquestionifheorshemeetsthe

statutorydefinitionofdislocatedworkerbutdoesnotappeartobecauseofthegeneralnatureoftheFAFSA

theirinformationontheFAFSAform.SchoolsmayusePJtoaccountfortheotherparent’sfinancialcontribution

thatisnotalreadyproperlycountedaschildsupportonline44cormoneyreceivedonline44iofthe2022–2023

FAFSAform.

Separationofthestudent’sparentsorthestudentandspouse

Acoupleneednotbelegallyseparatedtobeconsideredseparated—theymaydeemthemselvesinformally

separatedwhenoneofthepartnershasleftthehouseholdforanindefiniteperiodandthemarriageissevered.

Foradependentstudent,usetherulesfordivorcetodeterminewhichparent’sinformationtoreport.Whilea

marriedcouplethatlivestogethercan’tbeinformallyseparated,insomestatestheycanbelegallyseparated.If

theirstateallowsthis,andiftheyarestilllivingtogetherandarelegallyseparated,thenthatistheirstatusonthe

FAFSAformunlesstheyaretheparentsofadependentstudent,inwhichcasetheirstatusisunmarriedandliving

togetherandbothwouldreporttheirinformation.

Common-lawmarriage

Ifacouplelivestogetherandhasnotbeenformallymarriedbutmeetsthecriteriaintheirstateforacommon-law

marriage,theyshouldbereportedasmarriedontheFAFSAform.Ifthestatedoesn’tconsidertheirsituationtobe

acommon-lawmarriage,thentheyaren’tmarried;parentsofadependentstudentwouldreportthattheyare

unmarriedandlivingtogether.Checkwiththeappropriatestateagencyconcerningthedefinitionofacommon-

lawmarriage.

Numberincollege

HEASec.474(b)(3)

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instructions.UndertheWIOA,adislocatedworkerissomeonewhofallsintoatleastoneofthesecategories:

Apersonwhomeetsallofthefollowingrequirements:

Heorshewasterminatedorlaidofffromemploymentorreceivedanoticeofterminationorlayoff.

Heorsheiseligiblefororhasexhaustedhisorherunemploymentcompensation,orheorsheisnot

eligibleforitbecause,eventhoughtheyhavebeenemployedlongenoughtodemonstrateattachmentto

theworkforce,heorshehadinsufficientearningsorperformedservicesforanemployerthatweren’t

coveredunderastate’sunemploymentcompensationlaw.

Heorsheisunlikelytoreturntoapreviousindustryoroccupation.

Apersonwhowasterminatedorlaidofffromemploymentorreceivedanoticeofterminationorlayoffasa

resultofanypermanentclosureof,oranysubstantiallayoffat,aplant,facility,orenterprise

Apersonwhoisemployedatafacilityatwhichtheemployermadeageneralannouncementthatitwillclose

within180days

Apersonwhoisemployedatafacilityatwhichtheemployermadeageneralannouncementthatitwillclose

Aself-employedperson(includingfarmers,ranchers,orfishermen)whoisunemployedbecauseofnatural

disastersorbecauseofgeneraleconomicconditionsinhisorhercommunity

Aspouseofanactive-dutymemberoftheArmedForceswhohasexperiencedalossofemploymentbecauseof

relocatingduetopermanentchangeindutystation

Aspouseofanactive-dutymemberoftheArmedForceswhoisunemployedorunderemployedandis

experiencingdifficultyinobtainingorupgradingemployment

Displacedhomemakerswhomeetallofthefollowingcriteria:

Theyhavebeenprovidingunpaidservicestofamilymembersinthehome.

Theyhavebeendependentontheincomeofanotherfamilymemberbutarenolongersupportedbythat

income.

Theyareunemployedorunderemployedandhavingtroublegettingorupgradingemployment.An

underemployedpersonisoneworkingparttimebutwhowantstoworkfulltimeorisworkingbelowthe

demonstratedlevelofhisorhereducationorjobskills.

Noteveryonewhoreceivesunemploymentbenefitswillmeetthedefinitionofdislocatedworker.Forexample,in

generalthosewhoquittheirjobsarenotconsidereddislocatedworkers,eveniftheyarereceivingunemployment

benefits.

Youarenotrequiredtoverifytheanswertothisquestion.Ifyouchoosetoverifyit,documentationcaninclude,as

appropriatetothecategory,aletteroralayofforterminationnoticefromtheemployer,unemploymentinsurance

(UI)systemverification,taxreturns,abusinesslicense,ornewspaperarticles.Youmayalsousedocumentsfromthe

stateworkforceagencyora“one-stopcareercenter,”thoughtheyarenotrequiredtoprovideyousuch

documentationandapersonmaymeetthedislocatedworkerdefinitionwithoutgoingtotheworkforceinvestment

systemforservices.Absentallotherevidence,self-certificationwillsuffice,suchasastatementsignedbytheperson

affirmingthatheorshemeetsthedefinitionofdislocatedworker.

Informationfromtheworkforceinvestmentsystem.ThelocalworkforceinvestmentsystemandstateUI

agencymaysupportfinancialaidadministratorsby

providinggeneralinformationtodislocatedworkers;

providinggeneralinformationtofinancialaidadministrators,suchastheWIOAdefinitionofdislocatedworkers

andappropriatesamplesofdocumentationthatfinancialaidofficescanrequestfromanindividualtoverify

dislocatedworkerstatus;

providingspecificinformationtodislocatedworkers.Apersoncanrequestdocumentationfromthecareer

centerorotherappropriateofficethatheorsheisreceivingdislocatedworkerservicesthroughtheworkforce

investmentsystem.Thatofficecangivethedocumentationtothestudent,orathisorherrequestitmay(butis

notobligatedto)givethedocumentationdirectlytothecollege.

Ifyoumustdetermineifsomeoneisadislocatedworker,youhavesoleresponsibilityandmustmakethe

determinationregardlessofwhetherthepersonhasproofofdislocatedworkerstatus—orisreceivingdislocated

workerservices—fromtheworkforceinvestmentsystem.

Notethataresponseof“Don’tknow”ontheFAFSAformistreatedas“No”bytheCPS.Ifapersongivesthis

responsetoQuestion83or100,youarenotrequiredtoverifyit,butyoumaywanttodetermineifheorsheisa

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dislocatedworkerandifthatwouldaffectthestudent’seligibilityforfederalaid.

StepFive:IndependentStudentData

Purpose:Questions93–100collectinformationaboutindependentstudents.Onlystudentswhoanswered“Yes”tooneor

morequestionsinStepThreecompletethisstep.

Student’shouseholdsize(93).Thefollowingpersonsareincludedinthehouseholdsizeofanindependent

student:

Thestudentandhisorherspouse,unlessthespousehasdiedorisnotlivinginthehouseholddueto

separationordivorce.

Thestudent’schildren,regardlessofwheretheylive,iftheywillreceivemorethanhalfoftheirsupportfrom

thestudent(andspouse)fromJuly1,2022,throughJune30,2023.Thisincludesthestudent’sunbornchildren

whowillbebornduringtheawardyearandwillreceivemorethanhalftheirsupportfromthestudentfrombirth

totheendoftheawardyear.

Otherpersonswholivewithandreceivemorethanhalftheirsupportfromthestudentandwillreceivemore

thanhalfsupportfortheentireawardyear.ForFAFSAformssubmittedafterthestartoftheyear,seethe

relevantparagraphandexampleaboutlegaldependentsprovidedearlierinthischapterunderthe“Children

andlegaldependents”section.

Example:Eddyisanindependentstudent.Hewasmarried,butnowheandhiswifehaveseparated.He’s

payingchildsupport,butitisn’tenoughtoprovidemorethanhalfhischildren’ssupport,sohecan’tincludehis

childreninhishouseholdsize.Eddy’snephewChavoliveswithhimandgetsmorethanhalfofhissupportfrom

Eddy(andwilldosofortheawardyear),sohecanbecountedinEddy’shouseholdsize,whichistwo.Having

justturned24,ChavoisalsoconsideredindependentonhisownFAFSAform,andhishouseholdsizeisone.

Numberincollege(94).Thestudentisalwaysincludedinthenumberincollege.Alsoincludedarethoseinthe

householdsizewhoareorwillbeenrolledatleasthalftimeduringtheawardyearinadegreeorcertificateprogram

ataTitleIV-eligibleschoolandwhocanreasonablybeexpectedtoreceiveaidfromthefamilyfortheireducation.

Thedefinitionofhalf-timeenrollmentforthisquestionmustmeetthefederalrequirementseveniftheschooldefines

halftimedifferently.

Example:Underthepreviousexample,Eddywouldreporttwointhehouseholdandtwoincollege,whileChavo

wouldreportoneinhishouseholdandoneincollege.

Receiptofmeans-testedfederalbenefitsbyanyoneinthehousehold(95–99).Thisisanalternativeforthe

taxreturnrequirementofthesimplifiedneedsandautomaticzeroEFCtests.

Dislocatedworker(100).SeetheexplanationofQuestion83discussedearlierunderStepFour.

StepSix:SchoolInformation

Purpose(101):TheseitemscollectinformationaboutwhichcollegesthestudentwantstoreceivehisorherFAFSA

information.Foracollegetobeabletoreceivethestudent'sdata,thestudentmustlistthecollege’sfederalschoolcode

(nottheOPEID)orenteritscompletename,address,city,andstate.Thereisafederalschoolcodesearchintheonline

FAFSAform,andtheentirelistofschoolcodesisavailableinExcelontheKnowledgeCenterwebsiteLibrarysection’s

“PublicationsbyResourceType”area.

Foreachschoolthestudentindicateswhetherheorsheexpectstoliveonoroffcampusorwithhisorherparents.This

informationisnotusedtocalculatetheEFC,butitisusefultoschoolsfordeterminingthecostofattendance.

ThestudentcanlistuptofourschoolsonthePDFFAFSAformand10ontheweb(atleastoneisrequired).Ifheorshe

wantstheirinformationtobeavailabletomoreschools,heorshecanchangetheschoolslistedonlineorusetheirSAR.

TheCPSwillsenddatatonomorethan10(fourwiththePDFFAFSAform)schoolsatatime.Chapter4explainshow

studentscanaddorchangeschools.

TheISIRwillonlydisplaythefederalschoolcodeandcorrespondinghousingcodeofthereceivingschool.Theinformation

ofotherschoolsthestudentincludedontheFAFSAformwillnotappearexceptontheSARandonISIRssenttostate

grantagencies.SeeTheISIRGuide2022–2023.

https://fsapartners.ed.gov/knowledge-center/library/resource-type/Federal%20School%20Code%20Lists
https://fsapartners.ed.gov/knowledge-center/library/handbooks-manuals-or-guides/2021-07-12/2022-2023-isir-guide
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StepSeven:Signature(s)

Purpose:BysigningtheFAFSAform,theapplicantisassumingresponsibilityfortheaccuracyoftheinformation

reported.

Dateandsignature(s)(102–103).InadditiontocertifyingthatthedataontheFAFSAformiscorrect,thestudent

isalsosigningastatementofeducationalpurpose,whichisrequiredtoreceiveFSAfunds.Amongotherthings,the

studentagreestospendFSAfundsonlyoneducationalexpensesandaffirmsthatheorsheisnotindefaultona

federalloanordoesnotoweagrantoverpayment.Ifthestudentisdependent,oneparentwhoseinformationis

reportedontheFAFSAformmustalsosign.

Substitutesforaparent’ssignature.Whileparentinformationmustbeprovidedforadependentstudent,ahigh

schoolcounselororacollegeaidadministratormaysigntheapplicationinplaceofaparentif:

theparentsarenotcurrentlyintheUnitedStatesandcannotbecon-tactedbynormalmeans,

thecurrentaddressoftheparentsisnotknown,or

theparentshavebeendeterminedphysicallyormentallyincapableofprovidingasignature.

Thesignermustprovidehisorhertitleinparenthesesnexttohisorhersignatureandbrieflystatethereason(only

oneisneeded)whyheorsheissigningfortheparents;ifthisisnotdone,theFAFSAformwillnotbe

processed.Thesignerassuresaminimumlevelofcredibilityinthedatasubmitted;however,heorshedoesnot

assumeanyresponsibilityorliabilityinthisprocess.IfthecounselororFAAfindsanyinaccuraciesintheinformation

reported,theyshoulddirectthestudenttosendtheSARthroughthenormalcorrectionprocessor,ifheorsheisan

FAA,theycansubmitcorrectionsthroughFAAAccesstoCPSOnline.Becausethisproxysigningisn’tpossible

electronically,itmustbedoneonapaperFAFSAoronthesignaturepage/FAFSAsummaryusedwithFAAAccess.

Preparer’sIDandsignature(104–106).Onlypersonswhoarepaidafeetohelpthestudentcompletethe

applicationareconsideredFAFSApreparers.Thosewhoadvisestudentswithoutchargingafee,suchashighschool

counselorsandFAAs,arenotpreparers.Apreparermustincludehisorhername,hisorhercompany’sname(if

applicable),hisorheraddressorthecompanyaddress,andeitherhisorherSSNorthecompanyemployer

identificationnumber(EIN,asassignedbytheIRS).WiththepaperFAFSAform,thepreparermustalsosignanddate

theform.

Preparershaveotherobligations.Intheiradvertisingandinitialcontactwithaconsumer,includingviatheInternetor

phone,theymustclearlyinformhimorherthattheFAFSAformisfreeandcanbecompletedelectronicallyoron

paperwithoutprofessionalhelp.Iftheyhaveawebsitefortheirservice,itmustlinktoFAFSAontheWeb.Theymay

notuseanyformotherthantheFAFSAformtoapplyforTitleIVaid.

Apreparerwhoknowinglyfalsifiesinformationontheapplicationissubjecttothesamepenaltiesasanapplicant.

Copiesofsigneddocuments

Whileyouwilloftenreceivedocumentswithoriginalor“wet”signaturesfromthestudent(e.g.,apaperFAFSAform

thatthestudenthasworkedonandsignedwhileinyouroffice),theremightbeanoccasionwherethestudentgives

youacopyorsendsyouafaxofasigneddocument.ExceptforacopiedFAFSAform,otherimagedversionsofthe

originalsigneddocumentarevalidandmayberetained.

AssistanceinpreparationoftheFAFSA

HEASec.483(d)

Signaturesforelectronicapplications

FAAAccesstoCPSOnline

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SignatureRequirements:ApplicationandVerificationforAllFSAPrograms

Application(FAFSA

online,myStudentmobile

app,PDFFAFSA,FAA

AccesstoCPSOnline)

IRSDocumentation(Transcriptorotherform

submittedforverification)

Verification

Document

Ifyouenterastudent’soriginalapplicationthroughFAAAccesstoCPSOnline,youmustobtainoriginalor“wet”

signaturesontheprintedsignaturepage/FAFSAsummaryoronacompletedpaperFAFSAform,andyoumust

keepthesigneddocumentintheschoolfilesevenifthestudentdoesnotreceivefederalstudentaidorattend

yourschool.Youmayelectronicallystoretheoriginaldocument,butyoumaynotacceptfaxedorcopied

signaturesfromthestudentfortheFAFSAform.(Youhavemorelatituderegardingverificationdocumentsand

changestotheapplication;seeChapter4)

FAFSAonline

StudentswhohaveanFSAIDcanelectronicallysigntheirFAFSAform.ParentswhohaveanFSAIDcanalso

electronicallysign.Whenallthenecessarysignaturesareprovidedelectronically,theapplicationwillbe

processedwithin72hours.StudentsandparentsalsousetheFSAIDtosigntheapplicationintheFAFSAfeature

ofthemyStudentAidmobileapp,buttheotheroptionsbelowarenotavailableintheapp.

Alternately,studentscanprintthesignaturepage,signit,andmailittotheprocessor.Iftheprocessordoesn’t

receivethesignaturepagewithin14calendardaysofreceivingtheapplicationdata,itwillmaila“reject16”

(missingstudentsignature)SARtothestudent,whichthestudentcansignandreturn.Ifthestudentchoosesnot

toprintandsendasignaturepage,orifnoprinterwasavailable,theprocessorwon’twait14daystoprinta

rejectedSARforthestudentbutwillgenerateonewithin72hoursofreceivingthedata.Seetheannouncementof

March18,2019,foralistofwhatarevalidandinvalidsignatures.

IfthestudentindicatedonanelectronicFAFSAformthatheorshewouldprint,sign,andmailinasignaturepage

buttheprocessorhasnotreceivedthesignaturepage,thestudentcancalltheFSAICandhavetheirrecord

releasedfromtheFAFSAholdfile.Becausenosignaturepagehasbeenreceived,theFAFSAprocessorwill

producearejectedSARandmailittothestudenttosignandreturn.Theprocessorwillacceptthefirstsignature

documentitreceives—eitherthesignedsignaturepageorthesignedSAR.

SchoolsandstatesreceiveISIRsforrejectedrecords.Astudent’sreject16SARandhisorherISIRwillreflectthe

datathatheorsheprovidedontheapplication;however,theCPSwon’tcalculateanofficialEFCforthestudent

(anunofficialEFCthatcannotbeusedtoawardordisburseaidwillappearontheISIR)ordoanydatabase

matchesuntilitreceivesasignedsignaturepage,asignedSAR,oranelectronicsignature.Aschoolcanalso

collecttherequired“wet”signaturesattheschool,eitherontheSARoradocumentthathastherequired

certificationstatements(FAAAccessallowsschoolstoprintoutasignaturepagefortheISIR).Theschoolcanthen

submitanelectroniccorrectionshowingthatthesignatureshavebeenprovided.

Whenaparentofadependentstudentdoesn’tsignwithhisorherownFSAID,thestudentcanprintasignature

pagefortheparent.Ifthestudentindicatesthatnoprinterwasavailable,theCPSwillgeneratea“reject15”

(missingparentsignature)outputdocumentforthestudentwithin72hours.Ifthestudentindicatedheorshe

wouldsendinasignaturepage,theprocessorwillwaitupto14calendardaystoreceivethesignedpage.Ifit

doesn’treceiveasignedsignaturepageafter14days,itwillgenerateareject15SARandsendittothestudent.

ThestudentmusthaveaparentsigntheSARandmustsenditbacktotheaddressontheSAR.Forreject15

records,astudent’sSARandISIRwillreflectthedataprovidedontheapplication,buttheprocessorwon’t

calculateanEFCforthestudentuntilitreceivestheparent’selectronicsignatureorthesignedSARorsignature

page.

SignaturerequirementsforchangesmadeaftertheFAFSAformisfiledwillbediscussedinChapter4.

https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2019-03-18/application-processing-subject-reminder-valid-signature-rules-printed-fafsar-signature-pages
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Student Mustsignstatementthat

dataareaccurateandother

conditionsaremet(onpaper

FAFSA,websummary,or

signaturepageorbyusing

theFSAID)

IRSDataRetrievalTool(DRT)ortaxreturn

transcript(whichdoesnotneedtobesigned).In

rareinstanceswhenthetaxreturnisused,itmust

besignedbythestudent(orspouse),orthetax

preparermustprovidehisorhernameandSSN,

EIN,orPTIN.

Mustsign

documents

usedto

verifyFAFSA

data

Parent(s)(if

studentis

dependent)

Oneparentmustsign

statementthatdataare

accurate(onpaperFAFSA,

websummary,orsignature

pageorbyusingtheFSAID)

DRTortaxreturntranscript(whichdoesnotneedto

besigned).Inrareinstanceswhenthetaxreturnis

used,itmustbesignedbyoneparent,orthetax

preparermustprovidehisorhernameandSSN,

EIN,orPTIN.

Oneparent

mustsign

documents

usedto

verifyFAFSA

data.

Aid

Administrator

Mustcertifyifoverriding

dependencystatusorusing

PJ(can’tbedoneinthe

FAFSAonline)

N/A N/A

SignatureRequirementsforChanges*

ChangesviaSARorCorrectionsontheWeb Changessubmitted

viaFAAAccess

Professional

Judgmentvia

FAAAccess

Student MustsigncorrectionsstatementontheSAR;onthe

webtheFSAIDservesasthestudent’ssignature.

N/A N/A

Parent(s)(if

studentis

dependent)

Ifparentdataarechanged,oneparentmustsign

withFSAIDontheweb,signthecorrections

statementontheSAR,orprintandsignthesignature

page.

N/A N/A

Aid

Administrator

N/A Schoolmusthave

signed

documentationfrom

studentandparent

Mustcertifyfor

PJ/FAAadjustments

ordependency

override

*TheserequirementsapplytoanysubmissionofchangestotheCPS,whetherrequiredbyregulation(forPellGrantrecipientsorcorrectionstodata

matchitems)oratthediscretionofthefinancialaidadministrator(forCampus-BasedaidandDirectLoans).See“SubmittingchangesviaFAAAccess

toCPSOnlineorEDE”inChapter4forafullerexplanationofwhatisrequiredwhensubmittingchangestotheCPS.

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Chapter3

ExpectedFamilyContribution(EFC)

TheEFCisameasureofhowmuchthestudentandhisorherfamilycanbeexpectedtocontributetothecostofthe

student’seducationforagivenawardyearandcanimpactastudents’eligibilityforcertaintypesoffederalstudentaid.

TheEFCiscalculatedaccordingtoaformulaspecifiedinthelaw,andexplainedindetailinthischapter.

GeneralInformation

AllthedatatheCentralProcessingSystem(CPS)usestocalculatetheEFCcomefromtheinformationstudentsprovideon

theFAFSAform.TheEFCformulausesmanyvariables,includingincome,assets,thenumberofpersonsinthehousehold,

andthenumberofthoseattendingcollegefortheawardyear.

EveryyeartheDepartmentpublishesupdatedtablesusedintheEFCcalculation.The2022-2023updatescanbefoundin

theJuly19,2021FederalRegister.AlsoupdatedeachyearistheDepartment’sEFCFormulaGuidewhichisavailableat

fsapartners.ed.gov/knowledge-centerintheLibrarysectionunderResourceType>Handbooks,Manuals,orGuides>

2022-2023ExpectedFamilyContribution(EFC)FormulaGuide.

Thelaw(seeHEASec.474–479)givesthreeregularEFCformulas:oneeachfordependentstudents,independent

studentswithoutdependentsotherthanaspouse,andindependentstudentswithdependentsotherthanaspouse

(FormulasA,B,andCrespectively).TherearetwovariantsoftheregularEFCcalculation:asimplifiedformulawithfewer

dataelementsforeachgroupabove,andanautomaticzeroEFCforFormulaAandCstudents.

SimplifiedFormula

Thesimplifiedformulaisbasicallythesameastheregularformulaexceptthatassetinformationisn’tconsideredinthe

calculation.Adependentstudentqualifiesforthesimplifiedcalculationif:

theparents’combined2020adjustedgrossincome(AGI,fortaxfilers)orincomeearnedfromwork(fornon-filers)

waslessthan$50,000,AND

either(1)theparentsdidnotfileSchedule1withtheirIRSForm1040,1(2)oneofthemisadislocatedworkeras

definedintheWorkforceInnovationandOpportunityAct(seeChapter2foradescriptionofdislocatedworker),or(3)

anyonecountedintheirhouseholdsize(asdefinedontheFAFSAformandinChapter2)receivedameans-tested

federalbenefitduring2020or2021.2

Anindependentstudentqualifiesforthesimplifiedcalculationif:

thestudent’sandspouse’scombined2020AGI(taxfilers)orincomeearnedfromwork(non-filers)waslessthan

$50,000,AND

either:(1)thestudentandspousedidnotfileSchedule1withtheirIRSForm1040,1(2)oneofthemisadislocated

workerasdefinedintheWorkforceInnovationandOpportunityAct(seeChapter2foradescriptionofdislocated

worker),or(3)anyonecountedinthehouseholdsize(asdefinedontheFAFSAformandinChapter2)receiveda

means-testedfederalbenefitin2020or2021.2

TheFAFSAwebsitehasathresholdquestionthatallowstheassetquestionstobeskippedwhenthestudentseems

eligibleforthesimplifiedformulaoranautomaticzeroEFC.Butinsomeinstances,suchaswhenusingapaperFAFSA

form,astudentwhoqualifiesforthesimplifiedformulawillprovideassetinformation.InthosecasestheCPSwillcalculate

twoEFCs:oneusingtheassetsandoneexcludingthem.TheEFCfromthesimplifiedformula(whichexcludesassets)is

calledtheprimaryEFCandisprintedonthefrontofthestudent’sSAR,whiletheEFCfromthefullcalculationiscalledthe

secondaryEFCandisprintedintheFAAInformationsection.Todeterminethestudent’sfederalaid,theschoolmustuse

theprimaryEFC,whichwillalwaysbelessthanorequaltothesecondaryEFC.Ifitturnsoutthatthestudentwasnot

eligibleforthesimplifiedformulaanddidnotprovideassetinformation,theschoolmustcorrectandsubmittherecord

andusetheEFCreportedontheresultingtransaction.

https://fsapartners.ed.gov/knowledge-center/library/federal-registers/2021-07-19/federal-need-analysis-methodology-award-year-ay-2022-23
https://fsapartners.ed.gov/knowledge-center/library/handbooks-manuals-or-guides/2021-08-25/2022-2023-expected-family-contribution-efc-formula-guide
https://fsapartners.ed.gov/knowledge-center
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1ThisincludesthosewhofiledaSchedule1onlytoreportoneormoreofthefollowing:unemploymentcompensation,AlaskaPermanentFund

dividends,educatorexpenses,IRAdeductions,orthestudentloaninterestdeduction.Italsoincludesthosewhowerenotrequiredtofilea1040

returnandthosewhofiledareturnforoneofthefollowingTrustTerritories:PuertoRico,Guam,AmericanSamoa,theVirginIslands,theRepublicof

theMarshallIslands,theFederatedStatesofMicronesia,orPalau.

2Themeans-testedfederalbenefitprogramsare:

Medicaid(includingtheChildren’sHealthInsuranceProgram)orSupplementalSecurityIncome(SSI)

SupplementalNutritionAssistanceProgram(SNAP)benefits,alsoknownasfoodstamps

TheFreeandReducedPriceSchoolLunchProgram

TemporaryAssistanceforNeedyFamilies(TANF)–mayuseadifferentnameindifferentstates

SpecialSupplementalNutritionProgramforWomen,Infants,andChildren(WIC)

Apersonneednothavereceivedthebenefitforanentireyear;receivingitatanytimeinthebaseorfollowingyearqualifies.Also,anFAAmayuse

professionaljudgment(PJ)tocountabenefitifapersondidnotreceiveitduringthose24monthsbutisreceivingitnow.

AutomaticZeroEFC

ThelawalsoprovidesforanautomaticzeroEFCforsomestudents.Therulesfordeterminingwhoqualifiesforthisvariant

arethesameasthoseforthesimplifiedformulawiththesedifferences:

Theincomethresholdis$27,000orlessinsteadoflessthan$50,000.

It(theautomaticzeroEFC)isnotavailabletoindependentstudentswithoutdependentsotherthanaspouse(those

whouseFormulaB).

SkiplogicintheonlineFAFSAformwillallowthesestudentstoanswerfewerquestions,andiftheyareselectedfor

verification,feweritemsarerequired.

DepartmentofDefenseMatchandIraqandAfghanistanServiceGrant

SchoolswillconsidertheEFCtobezeroforPell-eligiblestudentswithaparentorguardianwhowasamemberoftheU.S.

ArmedForcesandwhodiedasaresultofserviceinIraqorAfghanistanafterSeptember11,2001.Thesestudentsmust

havebeenlessthan24yearsoldorenrolledincollegewhentheparentorguardiandied.

TheCPSwillmatchapplicationsagainstafileprovidedbytheDepartmentofDefense(DOD).Ifamatchisfound,a

personalizedletterwillbesenttothestudentexplainingthepotentialincreaseinfunding,theDODmatchflagwillbeset

to“Y”ontheISIR,andadatewillappearintheparent’sdateofdeathfield(which,outofsensitivity,willnotbenotedon

theSAR).TheCPSwillcalculateanEFCnormally;theschoolshoulduseazeroEFCwhenpackagingqualifyingstudents.

StudentsinthissituationwhoarenotPelleligiblebecausetheirEFCistoohighwillbeabletoreceiveanIraqand

AfghanistanServiceGrant(seeVolume1,Chapter6).TheamountofthegrantwillbethesameasthatofthePellGrant

theywouldhavebeeneligibleforwithazeroEFCminusasetpercentage(seeChapter3ofVolume3forspecific

guidanceoncalculatinggrantawards).However,forthesestudentstheschoolusestheEFCcalculatedbytheCPSfor

packaginginsteadofzero.

ChildrenofFallenHeroesScholarshipAct

AutomaticzeroEFC

HEASec.479(c)

Page 35: Application and Verification Guide

UndertheChildrenofFallenHeroesScholarshipAct(CFH),anotherwisePell-eligiblestudentwhoseparentorguardian

diedasaresultofactiveserviceinthelineofdutyasaPublicSafetyOfficershallreceivethemaximumPellGrantifthe

studentwaslessthan24yearsoldwhentheparentorguardiandiedorwasenrolledataninstitutionofhighereducation

atthetimeoftheparentorguardian’sdeath.

AschoolmustuseanEFCof0topackageallfederalstudentaidifthestudentmeetingtheabovecriteriahasaPell-

eligibleEFC.ForstudentswhoareeligiblefortheChildrenofFallenHeroesbenefits,schoolsmustsettheeligibilityflag

402inFAAAccessforthestudent.PleasenotethatunliketheIraqandAfghanistanServiceGrant,ifastudentisnotPell

eligible,thestudentisnoteligibleforaseparateChildrenofFallenHeroesScholarship(noseparategrantfunds).

Formoreinformation,pleasereviewVolume1,Chapter6.

AlternateEFCS

ThelawspecifieshowtheEFCofadependentstudentismodifiedifthestudentisgoingtoenrollforotherthananine-

monthperiod.TheEFCfoundintheupperrightcornerofthefirstpageoftheoutputdocumentisbasedonanine-month

enrollmentperiodandshouldalwaysbeusedforawardingaPellGrant,evenifthestudentisattendingforalongeror

shorterperiod.ThesecondsectionoftheFAAinformationareahasatableofalternateprimaryandsecondaryEFCsfor1–

12monthsthatyoumustusetoawardaid(otherthanPellgrants)tostudentsattendingforotherthanninemonths.

TheEFCWorksheets

TofurtherassistschoolswiththeEFCcalculationprocess,the2022-2023EFCFormulaGuidecontainsEFCworksheetsand

tablesforeachformula(A,BandC),whichcanbeusedtomanuallycalculateanEFCortoseehowtheEFCisdetermined

foreachoftheformulas.ForitemstakenfromtheFAFSAform,theworksheetsindicatethecorrespondingFAFSA/SARline

numbers.Ontheworksheetsforthesimplifiedformula,thepartsofthecalculationthataren’tusedaregrayedout.

ThefollowinginformationprovidesadditionalinsightintotheEFCcalculationprocessandmayprovehelpfulwhen

reviewingtheEFCworksheetsintheEFCFormulaGuide.

NegativeAGIorzero?

TheFAFSAformasksfortheAGI(thatappearsonthetaxreturn),whichcanbeanegativenumber.Ifyouaredoinga

handcalculationoftheEFC,you’llnoticethatthefirstlineoftheworksheetforFormulaAcitestheFAFSAlinenumberand

instructsyoutosubstituteazeroiftheAGIisnegative.Thisdoesnotmeanthatthestudentorparentshouldreporta

negativeAGIasazeroontheFAFSAform.TheCPSwillchangethevaluetozero,anditmakesassumptionsthatyouwill

notmakewhencompletinganEFCworksheetbyhand.WhenfillingouttheFAFSAform,theapplicantshouldusetheAGI

asitappearsonthetaxreturn,evenifitisanegativenumber.

FormulaA-DependentStudents

TheEFCforadependentstudentiscalculatedusingtheFAFSAdataforthestudentandhisorherparents.TheCPS

calculatestheparents’contribution(whichincludestheirassets),thestudent’scontributionfromincome,andthe

student’scontributionfromassets;theEFCisthesumofthesethree.

Underthesimplifiedformula,theparents’contributiondoesn’tincludeassets,noristhestudent’scontributionfrom

assetscounted.

Parents’contribution

Theparents’availableincomeandcontributionfromassetsarefirstdetermined,andthentheseareusedwiththe

numberincollegetocalculatetheparents’contribution.

Parents’availableincome.Theparents’availableincomeiscalculatedbysubtractingcertainallowancesfromthe

parents’totalincome.Theseallowancesaccountforcertainnondiscretionaryexpenses,suchastaxesandbasicliving

expenses.Onceaminimumlevelofsupporthasbeenoffsetforthoseexpenses,theformulaassumesthattheremaining

incomeisavailablefordiscretionarypurposes,includingpayingforapostsecondaryeducation.Theavailableincomecan

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beanegativenumber.

Thetotalincomeisthesumofthetaxableanduntaxedincome,minusamountsreportedintheincomebutexcludedfrom

theformula.Iftheparentsaretaxfilers,theparents’AGIasreportedontheFAFSAformistheamountoftheparents’

taxableincomeusedinthecalculation.Iftheparentsarenottaxfilers,thecalculationusestheparents’reportedincome

earnedfromwork.Totalincomecanbeanegativenumber.

Thesumofthefollowingallowancesreducestheparents’totalincome:

U.S.incometaxpaid.UsetheamountreportedontheFAFSAform.Non-taxfilersdon’treceivethisallowance.If

thisisanegativeamount,itissettozero.

Stateandothertaxallowance.UseTable1.Thisallowanceisapercentageofparents’totalincomeand

approximatestheaverageamountpaidinstateandothertaxes.Thepercentagevariesaccordingtothestateand

accordingtowhethertheparents’totalincomeisbelow$15,000oris$15,000ormore.Thestateusedisthe

parents’stateoflegalresidencereportedontheFAFSAform.Ifthisitemisblankorinvalid,thestudent’sreported

stateoflegalresidenceisused.Ifbothareblankorinvalid,thestateinthestudent’smailingaddressisused.Ifall

threeareblankorinvalid,the"Other"rateshowninTable1forablankorinvalidstateisused(2%fortotalincome

below$15,000;1%fortotalincomeof$15,000ormore).Iftheallowanceisanegativeamount,it’ssettozero.

Parents’SocialSecuritytaxallowance.Theparents’SocialSecuritytaxesarecalculatedseparatelybyapplying

theratesshowninTable3tobothparents’incomeearnedfromworkin2020(asreportedontheFAFSAform).The

totalallowanceforSocialSecuritytaxesisneverlessthanzero.

Incomeprotectionallowance.UseTable4.Thisallowanceisforthebasiclivingexpensesofafamily.Itvaries

accordingtothenumberintheparents’householdandthenumberincollegein2022-2023,asreportedonthe

FAFSAform.Ingeneral,aschoolcanassumethat30%oftheincomeprotectionallowanceamountisforfood,22%

forhousing,9%fortransportationexpenses,16%forclothingandpersonalcare,11%formedicalcare,and12%for

otherfamilyconsumption.Theincomeprotectionallowanceusedforaparticularstudentisprovidedasoneofthe

intermediatevaluesintheFAAInformationSectionoftheoutputdocument(labeledas“IPA”).

Employmentexpenseallowance.Familieswithtwoworkingparentsandone-parentfamilieshaveextraexpenses

thatmustbeconsidered,suchashousekeepingservices,transportation,clothingandupkeep,andmealsawayfrom

home.Thisallowancerecognizesthoseextraexpenses.Fortwoworkingparents,theallowanceis35%ofthelesser

ofthefirstorsecondparent’sincomeearnedfromwork(questions86and87),butmaynotexceed$4,000.Forone-

parentfamilies,theallowanceis35%oftheparent’sincomeearnedfromwork,alsonottoexceed$4,000.Ifa

student’sparentsaremarriedandonlyoneparentreportsanincomeearnedfromwork,theallowanceiszero.The

employmentexpenseallowanceisneverlessthanzero.

Parents’contributionfromassets.Thefullformulausestheassetsofparentsofadependentstudentanddetermines

a“contributionfromassets.”Thisamountiscombinedwithavailableincometogiveanaccuratepictureofthefamily’s

financialstrength.Inthesimplifiedformulaassetsaren’tcounted.

First,theparents’networthiscalculatedbyaddingassetsreportedontheFAFSAform.Thenetworthofabusinessora

farmisadjustedtoprotectaportionoftheseassets.UseTable6tocalculatetheamounttobeused.

Second,theparents’discretionarynetworthiscalculatedbysubtractingtheeducationsavingsandassetprotection

allowance(Table7)fromtheparents’networth.Aswithincome,thisisdonetoprotectaportionoftheassets.The

allowancesforages40through65approximatethepresentcostofanannuitythat,whencombinedwithSocialSecurity

benefits,wouldprovideamoderateleveloflivingforaretiredcoupleorsinglepersonatage65.AsshowninTable7,the

allowanceincreaseswiththeageoftheolderparentasofDecember31,2022(asreportedontheFAFSAform)toindicate

thecostofpurchasingsuchanannuityatagivenage.Discretionarynetworthmaybelessthanzero.

Finally,thediscretionarynetworthismultipliedbytheconversionrateof12%togettheparents’contributionfrom

assets,whichrepresentstheportionofparentalassetsconsideredavailabletohelppayforthestudent’scollege

education.Ifthecontributionfromassetsisnegative,itissettozero.

Calculationofparents’contribution.Thisisthefinalstepindeterminingtheparents’contribution.Theparents’

availableincomeandcontributionfromassetsareaddedtogethertodeterminetheparents’adjustedavailableincome,

whichcanbeanegativenumber.Thetotalparents’contributionfromadjustedavailableincomeiscalculatedfromthe

amountsandratesinTable8andisthetotalamountparentsareexpectedtocontributetowardalloftheirfamily’s

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postsecondaryeducationalcosts.TheratesinTable8increasefrom22%to47%astheadjustedavailableincome

increases.Thisisbasedontheprinciplethatasincomeincreasesbeyondtheamountneededtomaintainabasic

standardofliving,theportionusedforfamilymaintenancedecreasesandtheportionavailablefordiscretionarypurposes

increases.Therefore,aprogressivelylargeramountofincomemaybecontributedtowardpostsecondaryeducational

costs.Ifthetotalparents’contributionfromadjustedavailableincomeisnegative,itissettozero.

Theparents’contributionfortheindividualstudentisthencalculatedbydividingthetotalparents’contributionfrom

adjustedavailableincomebythenumberincollegein2022-2023,asreportedontheFAFSAform.Parentsarenot

includedinthenumberattendingcollege.

Student’scontributionfromincome

Todeterminethestudent’scontributionfromincome,thestudent’savailableincome(AI)isfirstcalculatedbysubtracting

totalallowancesfromthestudent’stotalincome.TheAIisthenassessedatarateof50%toobtainthestudent

contributionfromavailableincome.Ifthestudentcontributionfromavailableincomeislessthanzero,it’ssettozero.

Aswiththeparents’incomeinformation,thestudent’stotalincomeiscalculatedusinginformationfromhisorherFAFSA

form.Thestudent’stotalincomeisthesumoftheirtaxableanduntaxedincome,minusamountsreportedintheincome

butexcludedfromtheformula(seeChapter2formoreontheseexclusions).Ifthestudentisataxfiler,hisorherAGIas

reportedontheFAFSAformistheamountoftaxableincomeusedinthecalculation.Ifthestudentisnotataxfiler,the

calculationuseshisorherreportedincomeearnedfromwork.Thetotalincomemaybeanegativenumber.

Theallowancesarecalculatedbyaddingthefollowing:

U.S.incometaxpaid.UsetheamountreportedontheFAFSAform.Non-taxfilersdon’treceivethisallowance.If

thisisanegativeamount,it’ssettozero.

Stateandothertaxallowance.UseTable2.Thisallowanceisapercentageofthestudent’stotalincomethat

variesaccordingtothestate.Thestatetobeusedisthestudent’sstateoflegalresidencereportedontheFAFSA

form.Ifthatitemisblankorinvalid,thestateinthestudent’smailingaddressisused.Ifbothitemsareblankor

invalid,theparents’stateoflegalresidenceisused.Ifallthreeitemsareblankorinvalid,the"Other"rateforablank

orinvalidstateinTable2isused(1%).Iftheallowanceisanegativeamount,it’ssettozero.

SocialSecuritytaxallowance.Thestudent’sSocialSecuritytaxesarecalculatedbyapplyingtheratesshownin

Table3tothestudent’sincomeearnedfromworkin2020(asreportedontheFAFSAform).Thetotalallowancefor

SocialSecuritytaxesisneverlessthanzero.

Incomeprotectionallowance.Theincomeprotectionallowanceforadependentstudentis$7,040.

Parent’snegativeAAI.Torecognizethatastudent’sincomemaybeneededtohelpsupportthefamily,theEFC

calculationallowsaparent’snegativeadjustedavailableincome(AAI)toreduceadependentstudent’scontribution

fromincome.Becausethestudent’scontributionfromincomecannotbenegative,thiswillnotaffectthestudent’s

contributionfromassets.

Student’scontributionfromassets

Thestudent’sassetsaretreatedthesamewayastheparents’assetswiththreedifferences:thereisnoadjustmenttothe

networthofabusinessorfarm,thereisnoeducationsavingsandassetprotectionallowance,andnetworthisassessed

attherateof20%.Rememberthatunderthesimplifiedformulathereisnostudentcontributionfromassets.

Thestudent’snetworthiscalculatedbyaddingassetsreportedontheFAFSAform(negativeamountsareconvertedto

zeroforthiscalculation).Thenetworthismultipliedby20%toobtainthestudent’scontributionfromassets,whichisthe

portionofassetsconsideredavailabletohelppayforhisorherpostsecondaryeducation.

Calculationofstudent’sEFC

Thestudent’sEFCisdeterminedbyaddingtheparents’contribution,thestudent’scontributionfromavailableincome,

andhisorhercontributionfromassets.Ifthestudentqualifiedforthesimplifiedformula,hisorhercontributionfrom

assetsisnotcounted,andtheparents’contributionisdeterminedwithoutusingtheirassets.

AlternateEFCsforotherthannine-monthenrollment

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Thestandardparents’contributionisforanine-monthenrollmentperiod.Forashorterperiod,theparents’contributionis

proratedaccordingtothenumberofmonthsofenrollment.Thestudent’scontributionfromavailableincomeisalso

proratedandthenaddedtothestudentassetcontribution,whichisnotprorated.Foranenrollmentofmorethannine

months,theparents’contributioniscalculatedbyadjustingthestandardnine-monthformulaonpage3ofWorksheetAof

theEFCworksheets,andthestudent’scontributionremainsatthenine-monthamount.

FormulaB—IndependentStudentWithoutDependentsOtherThanA

Spouse

TheEFCforanindependentstudentwithoutdependentsotherthanaspouseiscalculatedusingFAFSAdataforthe

studentandspouse.TheCPScalculatesacontributionfromavailableincomeandacontributionfromassets.Thesumof

thesetwoisdividedbythenumberincollegein2022-2023,asreportedontheFAFSAform.TheresultistheEFCforthe

2022-2023awardyear.Underthesimplifiedformula,thecontributionfromassetsisnotused.

Contributionfromavailableincome

Thestudent’savailableincome,whichcanbeanegativenumber,iscalculatedbysubtractingthetotalallowancesfrom

thetotalincome.Theseallowancesaccountforcertainnondiscretionaryexpenses,suchastaxesandbasicliving

expenses.Onceaminimumlevelofsupporthasbeenprovidedtomeetthoseexpenses,theformulaassumesthatthe

remainingincomeisavailablefordiscretionarypurposes,includingpayingforapostsecondaryeducation.Theavailable

incomeisthenassessedatarateof50%toobtainthestudent’scontributionfromavailableincome.

Totalincome.Thetotalincomeisthesumofthestudent’sandtheirspouse’s(ifthestudentismarried)taxableand

untaxedincome,minusamountsreportedintheincomeontheFAFSAformbutexcludedfromtheformula(seeChapter2

formoreontheseexclusions).Ifthestudentandspousearetaxfilers,theirAGIasreportedontheFAFSAformisthe

amountoftaxableincomeusedinthecalculation.Iftheyarenottaxfilers,thecalculationusesreportedincomeearned

fromwork.Untaxedincomeisincludedintheformulabecauseitmayhaveaconsiderableeffectonthefamily’sfinancial

strengthand,insomecases,maybethefamily’smainsourceofincome.Thetotalincomecanbeanegativenumber.

Allowancesagainstincome.Totalallowancesarecalculatedbyadding:

U.S.incometaxpaid.UsetheamountreportedontheFAFSAform.Non-taxfilersdon’treceivethisallowance.If

thisisanegativeamount,it’ssettozero.

Stateandothertaxallowance.UseTable2.Thisallowanceisapercentageofthestudentandspouse’stotal

income.Thepercentagevariesaccordingtothestate.Thestatetobeusedisthestudent’sstateoflegalresidence

reportedontheFAFSAform.Ifthatitemisblankorinvalid,thestateinthestudent’smailingaddressisused.Ifboth

itemsareblankorinvalid,the"Other"rateforablankorinvalidstateisused(1%).Iftheallowanceisanegative

amount,it’ssettozero.

SocialSecuritytaxallowance.Thestudentandspouse’sSocialSecuritytaxesarecalculatedseparatelyby

applyingthetaxratesshowninTable3tothestudent’sandspouse’sincomeearnedfromworkin2020(asreported

ontheFAFSAform).ThetotalallowanceforSocialSecuritytaxesisneverlessthanzero.

Incomeprotectionallowance.Theincomeprotectionallowanceis$10,950forsinglestudentsandformarried

studentswhosespouseisenrolledatleasthalftime.Theallowanceis$17,550formarriedstudentswhosespouse

isn’tenrolledatleasthalftime.

Employmentexpenseallowance.Familieswithtwoworkingspouseshaveextraexpensesthatmustbe

considered,suchashousekeepingservices,transportation,clothingandupkeep,andmealsawayfromhome.This

allowancerecognizesthoseextraexpenses.Ifthestudentisn’tmarriedorisseparated,theemploymentexpense

allowanceiszero.Ifthestudentismarriedbutonlyonepersonisworking(eitherthestudentorthestudent’s

spouse),theallowanceiszero.Ifboththestudentandhisspouseareworking,theallowanceis35%ofthelesserof

thestudent’sincomeearnedfromwork(Question38)orthespouse’sincomeearnedfromwork(Question39),butit

maynotexceed$4,000.

Contributionfromassets

Forstudentswhoqualifyforthesimplifiedformula,thereisnocontributionfromassets.Inthefullformula,theassetsof

anindependentstudentwithnodependentsotherthanaspouseareconsideredinordertofullymeasurethefamily’s

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abilitytocontributetowardpostsecondaryeducationalcosts.

First,thenetworthofthestudentandspouse’sassetsiscalculatedbyaddingassetsreportedontheFAFSAform.The

networthofabusinessorafarmisadjustedtoprotectaportionofthenetworthoftheseassets.UseTable6tocalculate

theamounttobeused.

Second,thestudentandspouse’sdiscretionarynetworthiscalculatedbysubtractingtheassetprotectionallowance

(Table7)fromthenetworth.TheallowanceincreaseswiththeageofthestudentasofDecember31,2022,whichmay

bedeterminedfromthestudent’sdateofbirthasreportedontheFAFSAform.Thisisdonetoprotectaportionofassets

thatmaybeneededforpurposesotherthaneducation,suchasemergenciesorretirement.Discretionarynetworthcan

belessthanzero.

Finally,thediscretionarynetworthismultipliedbytheconversionrateof20%toobtainthestudentandspouse’s

contributionfromassets,whichrepresentstheportionofthevalueoftheassetsthatisconsideredavailabletohelppay

forthestudent’scollegeeducation.Ifthecontributionfromassetsislessthanzero,it’ssettozero.

Calculationofstudent’sEFC

Thestudent’sEFCisdeterminedbyaddingthestudentandspouse’scontributionfromavailableincometotheir

contributionfromassetsandthendividingthesumbythenumberincollegein2022-2023,asreportedontheFAFSA

form.Ifthestudentqualifiedforthesimplifiedformula,thecontributionfromassetsisexcludedfromthecalculationof

theEFC.

AlternateEFCsforotherthannine-monthenrollment

ThestandardEFCisforanine-monthenrollmentperiod.Ifthestudentwillbeenrolledforlessthanninemonths,theEFC

issimplyproratedbydividingitbynineandthenmultiplyingtheresultbythenumberofmonthsthestudentwillbe

enrolled.Foranenrollmentofmorethanninemonths,however,theEFCremainsatthenine-monthamount.

FormulaC—IndependentStudentWithDependentsOtherThanASpouse

TheEFCforanindependentstudentwithdependentsotherthanaspouseiscalculatedusingtheinformationforthe

studentandspouseprovidedontheFAFSAform.Theformulaisalmostthesameastheformulafortheparentsofa

dependentstudent.Therearethreebasicsteps.First,thestudent’savailableincomeisdetermined.Then,thestudent’s

contributionfromassetsiscalculated.Finally,theEFCiscalculatedusingtheavailableincome,thecontributionfrom

assets,andthenumberincollege.

Availableincome

Availableincomeiscalculatedbysubtractingallowancesfromthestudent’stotalincome.Theseallowancesaccountfor

certainnondiscretionarycosts,suchastaxesandbasiclivingexpenses,andrepresentaminimumlevelofsupport.The

formulaassumesthattheremainingincomeisavailablefordiscretionarypurposes,includingpayingforapostsecondary

education.Theavailableincomecanbeanegativenumber.

Student’stotalincome.Thestudent’stotalincomeisthesumofthestudent’sandtheirspouse’s(ifthestudentis

married)taxableanduntaxedincome,minusamountsreportedintheincomeontheFAFSAformbutexcludedfromthe

formula(seeChapter2formoreinformationontheseexclusions).Ifthestudentandspousearetaxfilers,AGIasreported

ontheFAFSAformistheamountoftaxableincomeusedinthecalculation.Iftheyarenottaxfilers,thecalculationuses

reportedincomeearnedfromwork.Thetotalincomecanbeanegativenumber.

Allowancesagainstincome.Totalallowancesarecalculatedbyadding:

U.S.incometaxpaid.UsetheamountreportedontheFAFSA.Non-taxfilersdon’treceivethisallowance.Ifthisisa

negativeamount,itissettozero.

Stateandothertaxallowance.UseTable1.Thisallowanceisapercentageofthetotalincomeandapproximates

theaverageamountpaidinstateandothertaxes.Thepercentagevariesaccordingtothestateandaccordingto

whetherthetotalincomeisbelow$15,000oris$15,000ormore.Thestatetobeusedisthestudent’sstateoflegal

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residencereportedontheFAFSAform.Ifthisitemisblankorinvalid,thestateinthestudent’smailingaddressis

used.Ifbothitemsareblankorinvalid,the"Other"rateforablankorinvalidstateisused(2%fortotalincome

below$15,000;1%fortotalincomeof$15,000ormore).Iftheallowanceisanegativeamount,it’ssettozero.

SocialSecuritytaxallowance.Thestudent’sandspouse’sSocialSecuritytaxesarecalculatedseparatelyby

applyingthetaxratesshowninTable3tothestudent’sincomeearnedfromworkandthespouse’sincomeearned

fromworkin2020(asreportedontheFAFSAform).ThetotalallowanceforSocialSecuritytaxesisneverlessthan

zero.

Incomeprotectionallowance.UseTable5.Thisallowanceprovidesforthebasiclivingexpensesofafamily.It

variesaccordingtothenumberinthestudent’shouseholdandthenumberincollegein2022-2023,asreportedon

theFAFSAform.Ingeneral,aschoolcanassumethat30%oftheincomeprotectionallowanceisforfood,22%for

housing,9%fortransportationexpenses,16%forclothingandpersonalcare,11%formedicalcare,and12%for

otherfamilyconsumption.Theincomeprotectionallowanceusedforaparticularstudentisprovidedasoneofthe

intermediatevaluesintheFAAInformationSectionoftheoutputdocument(labeledas“IPA”).

Employmentexpenseallowance.Familieswithtwoworkingparentsandone-parentfamilieshaveextraexpenses

thatmustbeconsidered,suchashousekeepingservices,transportation,clothing,upkeep,andmealsawayfrom

home.Thisallowancerecognizesthoseextraexpenses.Whenboththestudentandspousework,theallowanceis

35%ofthelesserofthestudent’sincomeearnedfromwork(Question38)orthespouse’sincomeearnedfromwork

(Question39),butmaynotexceed$4,000.Ifthestudentisn’tmarried,theallowanceis35%ofthestudent’sincome

earnedfromwork,or$4,000,whicheverisless.Ifastudentismarriedandonlythestudentorthespouse(butnot

both)reportsanincomeearnedfromwork,theallowanceiszero.Theemploymentexpenseallowanceisneverless

thanzero.

Contributionfromassets

Inthefullformula,theassetsofanindependentstudentwithdependentsotherthanaspouseareconsideredinorderto

fullymeasurethefamily’sabilitytocontributetowardpostsecondaryeducationalcosts.Theformuladeterminesa

“contributionfromassets,”anamountthatiscombinedwithavailableincometogiveanaccuratepictureofthefamily’s

financialstrength.Inthesimplifiedformula,theassetsarenotcountedatall.

First,thenetworthofastudentandspouse’sassetsiscalculatedbyaddingassetsreportedontheFAFSAform.Thenet

worthofabusinessorfarmisadjustedtoprotectaportionoftheseassets.UseTable6tocalculatetheamounttobe

used.

Second,thestudentandspouse’sdiscretionarynetworthiscalculatedbysubtractingtheassetprotectionallowance

(Table7)fromthenetworth.TheallowanceincreaseswiththeageofthestudentasofDecember31,2022,whichmay

bedeterminedfromthestudent’sdateofbirthasreportedontheFAFSAform.Thisisdonetoprotectaportionofassets

thatmaybeneededforpurposesotherthaneducation,suchasemergenciesorretirement.Discretionarynetworthcan

belessthanzero.

Finally,thediscretionarynetworthismultipliedby7%toobtainthecontributionfromassets,whichistheportionof

thevalueofthestudent’sandspouse’sassetsconsideredtobeavailabletohelppayforthestudent’spostsecondary

education.Ifthecontributionfromassetsislessthanzero,itissettozero.

Calculationofstudent’sEFC

ThisisthefinalstepindeterminingtheEFCfortheindependentstudentwithdependentsotherthanaspouse.The

availableincomeandthecontributionfromassetsareaddedtogethertoobtaintheadjustedavailableincome.The

adjustedavailableincomecanbeanegativenumber.Thetotalcontributionfromadjustedavailableincomeiscalculated

fromusingTable8.Thisisthetotalamountthestudent’sfamilyisexpectedtocontributetowardfamilypostsecondary

educationalcosts.TheratesinTable8increasefrom22%to47%astheadjustedavailableincomeincreases.Therateis

basedontheprinciplethatasincomeincreasesbeyondtheamountneededtomaintainabasicstandardofliving,the

portionusedforfamilymaintenancedecreases,whiletheportionavailablefordiscretionarypurposesincreases.The

largertheincome,theeasieritisforafamilytocontributetowardpostsecondaryeducationalcostswithlesseffectonthe

maintenanceofthefamily.Ifthetotalcontributionfromadjustedavailableincomeisnegative,itissettozero.

Dividingthetotalstudent’scontributionfromadjustedavailableincomebythenumberincollege,asreportedonthe

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FAFSAform,yieldstheEFCforthe2022–2023awardyear.

AlternateEFCsforotherthannine-monthenrollment

ThestandardEFCisforanine-monthenrollmentperiod.Ifthestudentwillbeenrolledforlessthanninemonths,theEFC

issimplyproratedbydividingitbynineandthenmultiplyingtheresultbythenumberofmonthsthestudentwillbe

enrolled.Foranenrollmentofmorethanninemonths,however,theEFCremainsatthenine-monthamount.

Reminder

Toviewand/orworkthroughtheEFCworksheetsandtablesinordertomanuallycalculatea2022-2023EFCfor

anyoftheformulas(A,B,orC),pleaseremembertoreviewthe2022-2023EFCFormulaGuide(locatedinFSA’s

KnowledgeCenterintheLibrarysectionunderResourceType>Handbooks,Manuals,orGuides>2022-2023

ExpectedFamilyContribution(EFC)FormulaGuide).

https://fsapartners.ed.gov/knowledge-center/library/handbooks-manuals-or-guides/2021-08-25/2022-2023-expected-family-contribution-efc-formula-guide
https://fsapartners.ed.gov/knowledge-center
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Chapter4

Verification,Updates,andCorrections

Becausestudentssometimesmakeerrorsontheirapplication,thereisaprocessforverifyingapplicationsandmaking

corrections.TheCentralProcessingSystem(CPS)selectswhichapplicationsaretobeverified,butyoualsohavethe

authoritytoverifyadditionalstudents.

YoumustverifyapplicationsselectedbytheCPSofstudentswhowillreceiveorhavereceivedsubsidizedstudent

financialassistance,asdefinedbelow.Verificationisnotrequiredforstudentswhoareonlyeligibleforunsubsidized

studentfinancialassistance(however,seeVerificationexclusionslaterinthischapterforanimportantcaveat).While

graduatestudentsareineligibleformosttypesofsubsidizedTitleIVaid,theyareeligibleforFederalWorkStudyand

wouldneedtocompleteverificationiftheyareselectedandreceivethataid.Studentswhoareeligibleforbothsubsidized

andunsubsidizedTitleIVaidmaynotavoidverificationbyacceptingonlyunsubsidizedaid;theymustcomplete

verificationtoreceiveanyTitleIVaid(seethe“Disbursingunsubsidizedaid”sectionlaterinthischapterformore

information).

RequiredPoliciesandProcedures

Yourschoolmusthavewrittenpoliciesabout

thetimeperiodinwhichstudentsmustsubmitverificationdocumentation,

theconsequencesforfailingtosubmitthosedocumentsintime,

themethodyouusetonotifystudentsiftheirexpectedfamilycontribution(EFC)andTitleIVaidamountschange,

theproceduresyouorstudentsfollowtocorrectFAFSAdata,and

theprocedureyoufollowtoreferastudenttotheOfficeofInspectorGeneral(OIG)(seeChapter5).

Yourschoolmustprovide,inatimelymanner,studentsselectedforverificationaclearexplanationoftheirrole,including

whatdocumentstosubmit,deadlinestheymustmeet,andtheconsequencesoffailingtomeetthem.

TheFSAAssessments,locatedintheKnowledgeCenterunderthe“ResourceType”subpartoftheLibrarysection,

includesvariousverificationactivitiesundertheverificationassessmentthatyoucanusetohelpyouevaluateyour

verificationprocess.Inaddition,theDepartmenthasalistofquestionsandanswersaboutverificationlocatedwithinour

ProgramIntegrityQ&Awebsite.

Subsidizedstudentfinancialassistanceprograms

TitleIVprogramsforwhicheligibilityisdeterminedbytheEFC:thePellGrant,FederalSupplementalEducational

OpportunityGrant(FSEOG),FederalWork-Study(FWS),andDirectSubsidizedLoanprograms.

Unsubsidizedstudentfinancialassistanceprograms

TitleIVprogramsforwhicheligibilityisnotbasedontheEFC:theTeacherEducationAssistanceforCollegeand

HigherEducation(TEACH)Grant,DirectUnsubsidizedLoan,andDirectPLUSLoanprograms.

TheIraqandAfghanistanServiceGrantisanon-need-basedgrantandisnotsubjecttoverification.

https://fsapartners.ed.gov/knowledge-center/library/fsa-assessments/2019-03-05/verification
https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html
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Verificationselectionandprofessionaljudgement(PJ)

Youmustcompleteverificationforaselectedstudentbeforeyouexerciseprofessionaljudgment(PJ)toadjustanyvalues

usedtocalculatetheEFC.ButaPJadjustmentdoesnotrequireyoutoverifyanapplicationnotselected.

OncetheDepartmentselectsaFAFSAapplicationforverification,everysubsequenttransactionforthatawardyear,even

oneresultingfromPJ,willindicatethatthestudentisselectedforverification.

IfaFAFSAthatisnotselectedforverificationislatercorrected,thatcanresultintheapplicationbeingselected.However,

whenPJisused(andcodedcorrectly)toadjustanapplicationthatisnotselectedforverification,theCPSpreventsthe

subsequenttransactionfrombeingselectedforverification.

ApplicationsandInformationtobeVerified

TheDepartment’slong-termgoalisforacustomizedapproachtoverification.Amenuofpotentialverificationitemsfor

eachawardyearwillbepublishedintheFederalRegister,andtheitemstoverifyforagivenapplicationwillbeselected

fromthatmenuandindicatedontheSAR/ISIR.Thoseoutputdocumentswillcontinuetoincludeonlyoneverificationflag

toshowstudentswhowereselected,andtheywillneedtoverifyalltheFAFSAitemsbelowthatapplytothem.

SeetheSeptember1,2021,FederalRegisterfortheverificationitemsfor2022–2023.Pleasenotethatallofthe

verificationitemsarethesameaslastyear’sitemsexcepthighschoolcompletionstatushasbeenremoved:

Adjustedgrossincome(AGI)

U.S.incometaxpaid

Educationcredits

UntaxedportionsofIRAdistributions

Untaxedportionsofpensions

IRAdeductionsandpayments

Tax-exemptinterestincome

Incomeearnedfromwork

Householdsize

Numberincollege

Identity/statementofeducationalpurpose

Theverificationflagwillhaveavalueof“Y,”andnexttotheEFCwillbeanasteriskreferringtoacommentinthestudent

sectionoftheSARthattellsapplicantstheywillbeaskedbytheirschoolstoprovidedocumentation.Averification

trackingflagwillbesetontheapplicant’sInstitutionalStudentInformationRecord(ISIR)toindicateplacementinoneof

the2022–2023verificationtrackinggroups.

Policiesandprocedures

34CFR668.53

VerificationandPJ

34CFR668.53(c)

https://fsapartners.ed.gov/knowledge-center/library/federal-registers/2021-09-01/verification-2022-2023-award-year-fafsa-information
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School-selectedverification

Insomecasesyou,nottheCPS,willselectastudentforverification.Youmustverifyanyinformationyouhavereasonto

believeisincorrectonanapplication.Also,youmayatyourdiscretionrequireastudenttoverifyanyFAFSAinformation

andprovidereasonabledocumentationaccordingtoconsistentlyappliedschoolpolicies.Ineithercaseyoumay,butare

notrequiredto,includeanyoftheCPSverificationitemsnotalreadyincluded.Whetheryoudothatornot,studentswith

theseapplicationsareconsideredselectedforverificationand,aswithCPS-selectedapplications,allotherverification

requirements,suchasdeadlines,allowabletolerances,andinterimdisbursementrules,apply.

WhenschoolschoosetoverifyanitemotherthanthosetheDepartmentselects,theymaydelaydisbursingTitleIVaid

untilverificationiscompletediftheschool-selecteditemcanaffectthestudent’sTitleIVeligibility,suchasanitemabout

dependencystatus.ButschoolscannotdelaydisbursingTitleIVfundswhentheitemhasnobearingonTitleIVaid,for

example,iftheschoolisverifyinghomeequitytodeterminestudenteligibilityforschoolorstateaid.

Verificationtrackinggroups

StudentswhoareselectedforverificationwillbeplacedinoneofthefollowinggroupstodeterminewhichFAFSA

informationmustbeverified.

V1—StandardVerificationGroup.Studentsinthisgroupmustverifythefollowingiftheyaretaxfilers:

Adjustedgrossincome

U.S.incometaxpaid

UntaxedportionsofIRAdistributions

Untaxedportionsofpensions

IRAdeductionsandpayments

Tax-exemptinterestincome

Educationcredits

Householdsize

Numberincollege

Studentswhoarenottaxfilersmustverifythefollowing:

Incomeearnedfromwork

Householdsize

Numberincollege

V4—CustomVerificationGroup.Studentsmustverifyidentity/statementofeducationalpurpose(SEP).

V5—AggregateVerificationGroup.Studentsmustverifyidentity/SEPinadditiontotheitemsintheStandard

VerificationGroup(V1).

GroupsV2,V3,andV6arereservedforfutureusebytheDepartment.

Formoreinformationrelatedtotheremovalofthehighschoolcompletionstatusstartingin2022–2023,pleaseseeGEN-

21-06.

Changingtrackinggroups

AstudentmaymovefromVerificationTrackingGroupV1orV4togroupV5basedoncorrectionsmadetohisorherCPS

Verificationitems

34CFR668.56

https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-09-01/2022-2023-award-year-fafsar-information-be-verified-and-acceptable-documentation
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recordoronotherinformationavailabletotheDepartment.Ifverificationwasalreadycompletedforthepreviousgroup,

thestudentisonlyrequiredtoverifytheV5informationthatwasnotalreadyverified.Ifverificationwasnotcompletedfor

thepreviousgroup,thestudentneedstoverifyalloftheV5information.

NodisbursementsofTitleIVaidmaybemadeuntiltheV5verificationissatisfactorilycompleted.Ifthestudentdoesn’t

completeverification,theschoolisnotliableforanyTitleIVaiditdisbursedpriortoreceivingthegroupV5ISIR.The

studentisliableforthefullamountbecausewithoutverificationthereisnoevidenceheorshewaseligibleforthataid.

SeetheOctober31,2016,announcementformoreinformationaboutdisbursementsandpotentialreturnoffundswhen

studentsareselectedforverification.

ReportingresultsforgroupsV4andV5

Youmustreporttheverificationresultsofidentityforanystudentforwhomyou(1)receiveanISIRwithtrackingflagV4

orV5—asselectedbytheCPS,notyourschool—and(2)requestverificationdocumentation.Youreportthisinformation

ontheFAAAccesstoCPSOnlinewebsite:selecttheIdentityVerificationResultsoptionfromthemainmenu,enteryour

schoolidentifiers,theawardyear,andthestudentidentifiers.Forthe2022–2023awardyear,youwillthenenteroneof

thefollowingnumericcodesthatmostapplies:

1-Verificationcompletedinperson,noissuesfound

2-Verificationcompletedremotely,noissuesfound

3-Verificationattempted,issuesfoundwithidentity.(YoudidnotreceiveacceptabledocumentationfortheSEPor

identity.)

4-Nolongervalid–donotusefor2022–2023andbeyond.(Valueusedpriorto2022–2023awardyeartoidentify

whenhighschoolcompletionstatusissuesexistedbuttherewerenoissueswithidentity.)

5-Noresponsefromapplicantorunabletolocate

6-Nolongervalid–donotusefor2022–2023andbeyond.(Valueusedpriorto2022–2023awardyeartoidentify

whenbothhighschoolcompletionstatusandidentityissuesexisted.)

Formoreinformationregardingtheimplementationoftheremovalofhighschoolcompletionstatusfromthe2022–2023

verificationprocess,pleaseseetheSeptember1,2021electronicannouncement.

Youarerequiredtoreportresultsnomorethan60daysfollowingyourfirstrequesttothestudentfordocumentationof

identity.Inaccurateanduntimelyreportingmaysubjectyourschooltofindingsasaresultofyourannualcompliance

auditoraprogramreview.Ifthereisachangeinaresultyouhavealreadysubmitted,youcansubmitthenewcodeusing

theaboveprocess,andmustmakethatchangewithin30daysofbecomingawarethatachangeoccurred.Themost

recentsubmissionwillsupplantpriorawardyearsubmissions.BecausetheFAAAccesswebsitedoesnotstorealistof

theseverificationresultsforyoutoretrieve,werecommendyouprintandkeeptheconfirmationpageforyourrecords.

Insteadofusingthisindividualmethod,youcansubmitverificationresultsbyuploadingaflatfilewiththedataforupto

2,000students.Eachrecordmustcontainonlythenine-digitSSN,thetwo-characternameID,andtheappropriate

numericresultcodefromabove.Eachlineofdatamustcontainonlyonerecord.Donotusehyphens,emptylines,or

spaces(unlessthestudentdoesnothavealastname,inwhichcaseentertwospaces).Thisisanexampleoftworecords

reportedviatheflatfile:

111223333BE1

222334444OL5

Verificationexclusions

Therearetimeswhenyoudon’tneedtoverifyastudent’sapplication.Exceptinthecaseofthestudent’sdeath,

however—orpost-enrollmentsituationswherethestudentalsodoesnotintendtoreenroll—noneofthe

exemptionsexcuseyoufromtherequirementtoresolveconflictinginformation(seeChapter5).Youshould

documentthebasisforanexclusion.Otherinformationnotexcludedmuststillbeverifiedaccordingtoallother

requirements.

Youdon’thavetoverifyFAFSAinformationofastudentinthefollowingsituations:

https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2016-10-31/verification-subject-changes-verification-tracking-groups-updated-march-3-2017
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-09-01/implementation-high-school-completion-status-removal-verification-ea-id-verif-21-02
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Deathofthestudent.Youdon’thavetocontinueverificationifyoumadeaninterimdisbursementandthestudent

diedbeforeverificationwascompleted.Youcannotmakeanyadditionaldisbursements,exceptforFWSfunds

alreadyearned,toanyofthestudent’sbeneficiaries.YoucannotoriginateordisbursehisorherDirectSubsidized

LoanorconsideranyinterimdisbursementyoumadeofPellorFSEOGfundsorprovisionalFWSemploymenttobean

overpayment.

Notanaidrecipient.Thestudentwon’treceiveTitleIVaidforreasonsotherthanafailuretocompleteverification.

Thisincludesbeingineligibleforthataidandwithdrawingwithoutreceivingit.

Theapplicantiseligibletoreceiveonlyunsubsidizedstudentfinancialassistance.However,studentsselectedforV4

orV5verificationshouldcompleteitinaccordwiththeanswertoDOC-Q18ontheverificationQandApage.

Applicantverifiedbyanotherschool.Thestudentcompletedverificationforthecurrentawardyearatanotherschool

beforetransferring.HisorherFAFSAdatamustbethesameasitwasatthepreviousschool,andyoumustgeta

letterfromthatschoolstatingthatitverifiedthestudent'sapplicationandprovidingthetransactionnumberofthe

pertinentvalidISIR.

Postenrollment.Thestudentwasselectedforverificationafterceasingtobeenrolledatyourschool,heorshedoes

notintendtoreenrollfortheawardyear,andnofurther(includinglate)disbursementswillbemade.

Unlessyouhavereasontobelieveitisinaccurate,youdon’thavetoverifythereportedFAFSAinformationoftheparents

ofadependentstudentifanyofthefollowingapply(includingincaseswherethereisonlyoneparent):

Bothoftheparentsarementallyincapacitated.

Bothparentsorthecustodialparenthasdied.

TheyareresidinginacountryotherthantheUnitedStatesandcan’tbecontactedbynormalmeans.

Theycan’tbelocatedbecausethestudentdoesnothaveandcannotgettheircontactinformation.

Unlessyouhavereasontobelieveitisinaccurate,youdon’thavetoverifythereportedFAFSAinformationofthespouse

ofanindependentstudentifanyofthefollowingapply:

Thespousehasdied.

Thespouseismentallyincapacitated.

ThespouseisresidinginacountryotherthantheUnitedStatesandcan’tbecontactedbynormalmeans.

Thespousecan’tbelocatedbecausethestudentdoesnothaveandcannotgethisorhercontactinformation.

Example:UrsulaisattendingLemCommunityCollege,andherapplicationisselectedforverification.Sheprovided

herhusband’sinformationontheapplicationbutnowexplainsthatherecentlymovedoutandshecan’tlocatehim.

ShealsogivesLemdocumentstoshowthatshe’striedtolocateherhusband.LemdeterminesthatUrsuladoesn’t

needtoverifyherhusband’staxandincomeinformation.Ofcourse,shestillneedstoverifyherowninformation.

Verificationfollowingdisasters

TheDearColleagueLetter(DCL)GEN-17-08givesgeneralguidanceforawardingaidinfederallydeclareddisasters.It

statesthattheSecretarywillnotenforcetheverificationrequirementsduringtheawardyearforapplicantswhoserecords

werelostordestroyedbecauseofadisasteraslongastheschoolhastriedtopreserveandreconstructanyrecords.The

schoolmustdocumentwhenitdoesnotperformverificationforthisreasonandusestatuscode“S”whenreportingthe

disbursementofPellGrantstoaffectedstudents.Also,therequirementfordependentstudentstosubmitastatement

signedbyaparentregardinghouseholdsizeandnumberincollegeiswaivediftheparentscannotprovidethesignature

duetothedisaster.Theschoolmustnotewhynoparentwasabletoprovidethestatement.

Schoolsthatexperiencealocaldisaster(ratherthanafederallydeclaredone)thataffectsTitleIVadministrationshould

Verificationexclusions

34CFR668.54(b)

https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html#acc
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2017-08-29/gen-17-08-subject-guidance-helping-title-iv-participants-affected-major-disaster
Page 47: Application and Verification Guide

consulttheirregionalschoolparticipationdivision.

RefertotheresourcesforhighereducationinstitutionsontheDepartment’sCoronaviruswebpageforguidancepertaining

totheon-goingCOVID-19nationalemergency,includingvariousverificationflexibilities.

HigherEducationReliefOpportunitiesforStudents(HEROES)Act

ThereliefdescribedinGEN-17-08appliesspecificallytodisastersandisseparatefromreliefundertheHEROESAct,which

allowstheSecretarytomodifyorwaivesomestatutoryandregulatoryrequirementsforthosewho

areservingonactivedutyorperformingqualifyingNationalGuarddutyduringawar,othermilitaryoperation,or

nationalemergency;

resideorareemployedinanareadeclaredadisasterbyafederal,state,orlocalofficialinconnectionwithanational

emergency;or

sufferedeconomichardshipasadirectresultofawar,othermilitaryoperation,ornationalemergency,as

determinedbytheSecretary.

Readtheelectronicannouncement,andtheFederalRegisternoticeforthewaiversandmodificationsduetoexpireon

September30,2022.

Documentation

TheSeptember1,2021,FederalRegistergivesthedocumentationrequiredforverifying2022–2023applicationdata,

whichdependsontheitemverified,asexplainedinthissection.TheDepartmentencouragesstudentsandparentstouse

theIRSDataRetrievalTool(DRT)toimportdatafromtheirtaxreturnandnotchangeit.Itisthefastest,easiest,andmost

securemethodofmeetingverificationrequirements.Inaddition,theDepartmenthasdevelopedsuggestedtextthat,if

youchoose,youcanusetocreateaverificationdocumentandtoverifynon-taxitems,suchashouseholdsizeand

numberincollege.Toreviewthesuggestedtextfor2022-2023,pleaseseeGEN-21-06(postedonSeptember1,2021).

Ifyouuseaverificationdocument,besurethatitissigned,thatallrequiredsectionsarecompleted,andthatany

relevanttaxoralternativedocumentsareattached.Copiesareacceptable,andunlessspecificallynotedinthischapter,a

signatureonacopyisasvalidasanoriginalsignature(i.e.,ahandwrittenor“wet”signature).Ifacopyofthetaxreturn

isused,thefiler(oratleastoneofthefilersofajointreturn)mustsignitorthetaxpreparermustprovidehisorher

nameandSSN,EIN,orPTIN.

Thefollowingchartshowsthetaxformlinenumbersforthemostcommonlyreporteditems.Thischartisareferenceonly;

itisnotalistofalltheitemstheschoolmustcheckonataxreturn.

Lineitemsfromthe20201040taxreturn

AGI 11

Incometaxpaid 22minusSchedule2line2

DeductibleIRA/SEP Schedule1line15plus19

Tax-exemptinterestincome 2a

UntaxedportionsofIRAdistributionsandpensions(excludingrollovers) (4a+5a)minus(4b+5b)

Educationcredits Schedule3line3

https://fsapartners.ed.gov/help-center/fsa-customer-service-center/federal-student-aid-offices/school-participation-division
https://www.ed.gov/coronavirus
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2017-09-29/ope-announcements-subject-updated-waivers-and-modifications-statutory-and-regulatory-provisions-under-authority-higher-education-relief-opportunities-students-act-2003-heroes-act
https://www.federalregister.gov/documents/2017/10/17/2017-22489/federal-student-aid-programs-student-assistance-general-provisions-federal-perkins-loan-program
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-09-01/2022-2023-award-year-fafsar-information-be-verified-and-acceptable-documentation
Page 48: Application and Verification Guide

DocumentingAGI,taxespaid,andothertaxdatawiththeDRT

Asalreadynoted,theimportationofIRStaxdataviatheDRTisthebestwaytodocumentthatinformation.Studentsand

parentsdothiseitherwheninitiallyfillingouttheFAFSAorlaterasacorrection.Fortheretrieveddatatobeacceptable

documentationoftaxdata,itisnecessarythatneitherstudentsnorparentschangethedataafteritistransferredfrom

theIRS—ifthedatawaschangedorifyouhavereasontobelievethedatatransferredisincorrect,thestudentwillneedto

provideataxreturntranscriptorasignedcopyofthetaxreturn.TheIRSrequestfield(s)ontheISIRwillhaveavalueof

“02”whenthedataisunchanged.ThefollowingitemsareimportedfromIRSform1040toastudent’sFAFSAformviathe

DRT:

Typeoftaxreturnfiled

Adjustedgrossincome

Taxespaid

Educationcredits

IRAdeductions

Tax-exemptinterestincome

UntaxedportionsofIRAdistributions

Untaxedportionsofpensions

Incomeearnedfromwork

Taxreturnfilingstatus

Inthefollowingsituations,theIRSDRTisnotavailableintheFAFSAonlineorthemyStudentAidmobileapp(allapplyto

bothstudentsandparentsunlessotherwisenoted):

ThepersondidnotindicateontheFAFSAformthatthetaxreturnhasbeencompleted.

Thepersonfiledanon-U.S.taxreturn.

ThemarriagedateisJanuary2021orlater.

ThepersonansweredmarriedontheFAFSAformandfiledthetaxreturneitherasheadofhouseholdormarriedbut

filingaseparatereturn.

ThefirstthreedigitsoftheSSNare666.

NeithermarriedparententeredavalidSSN.

AnunmarriedparentorbothmarriedparentsenteredallzeroesfortheSSN.

AGIandincometaxdocumentation

34CFR668.57(a)

UsingajointreturntofigureindividualAGIandtaxespaid

Ifthefilerofajointreturnhasbecomewidowed,divorced,orseparatedsincefilingthereturn,itmaybe

necessarytodeterminetheindividual’sincomeandtaxespaidusingthejointreturnandW-2forms.IfaW-2is

notavailable(thefilerisself-employedforexample)orifaduplicatecopyfromtheemployerwhoissuedthe

originalW-2isnotavailableinatimelymanner,theschoolmaypermitthefilertoprovideasignedstatement

thatcertifiesthebaseyearAGIandU.S.taxespaid.Ifhehasdivorcedandmarriedsomeonenew(see“Parent

remarriageafterapplying”sectiondiscussedlaterinthischapterifthisoccurredaftercompletionofthe

application),thenthenewspouse’sincomeandassetswouldalsoneedtobeincluded.

Addtheincomeamountsfromtheindividual’sW-2formstoanyotherincomethatcanbeextractedfromthejoint

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Usingthetaxtranscript

IfstudentscannotorwillnotusetheDRT,eitheratinitialFAFSAfilingorthroughonlinecorrections,anotherwayto

documentAGI,taxespaid,anduntaxedincomeisbyprovidinganIRStaxreturntranscriptforthestudentandspouseor

parents,asapplicable.Beforerequestingatranscript,theyshouldallowenoughtimetopassafterfilingthereturn;it

takestheIRS2to4weekstoprocessreturnsfiledelectronicallyand6to8weeksformailedreturns.Taxtranscripts

submittedtoyourschoolforverificationdonotneedtobesignedbythetaxfiler(butitisencouraged)unlessyouhave

reasontodoubttheirauthenticity.

Thereareafewwaystorequestataxreturntranscript:onlineatwww.irs.gov,bycalling1-800-908-9946,orbymailing

thepaperForm4506TEZ,whichcanbeprintedoutfromtheIRSwebsite.Toorderafiscalyeartaxtranscriptfor

verification,Form4506-TmustbeusedratherthanForm4506T-EZ.Phonerequestsareviaanautomatedprocessinstead

return.Anyinterestorbusinessincomeearnedonjointaccountsorinvestmentsshouldbeassessedat50%.The

sameprocedureshouldbeusedtodividebusinessorfarmlosses.Also,iftheAGIlistedonthejointreturnwas

adjusted,youshouldreducetheindividual’sAGIbytheportionoftheadjustmentthatappliessolelytohimor

her.AnAGIfigurecanbecalculatedfortheindividualfiler.Asignedstatementfromthefilercertifyingthatthe

datafromthejointreturnwereaccuratelyassessedissufficientdocumentationforthismethod.

Useoneofthefollowingmethodstofiguretheindividual’staxespaid:

Taxtable(preferredmethod).UsingtheIRSTaxTableorTaxRateSchedulefortheappropriateyear,

calculatetheamountoftaxthatwouldhavebeenpaidifaseparatereturnhadbeenfiled.Usethe

deductionstheindividualcouldhaveclaimedifheorshehadfiledaseparatereturn.(Ifitemizeddeductions

weretaken,countonlytheportionofthosedeductionsthatcouldhavebeenclaimedonaseparatetax

return.)

Proportionaldistribution.DeterminewhatpercentageofthejointAGIwasattributabletotheindividual,

andthenassessthejointtaxespaidbythatsamepercentage.

Example

CalculatingtheindividualAGIfromajointreturn

Eddy’sapplicationisselectedforverification.Heandhiswifefiledajointreturnfor2020andhavesince

divorced.TheAGIonEddy’sFAFSAmatchestheAGIof$56,500onthe2020taxreturn,whichmeansit’swrong

becauseitincludeshiswife’sincome.

Eddy’sW-2showsthathisincomefor2020was$25,900,andthetaxreturnshows$400ininterest.Becauseit

wasinterestonajointsavingsaccount,theaidadministratoradds$200ofittoEddy’sincomeandsubmits

$26,100asthecorrectedincomeviaFAAAccess.

Calculatingtheindividualtaxfromajointreturn

TheaidadministratordeterminesthatEddy’spartofthe$56,500AGIheandhiswifereportedis$26,100.Ifhe

hadfiledhistaxreturnassingle,hisstandarddeductionwouldhavebeen$12,400(insteadof$24,800for

marriedfilers).Eddy’sincomeof$26,100minus$12,400forthestandarddeductionresultsin$13,700intaxable

income.

TheaidadministratorusesthetaxtabletodeterminehowmuchtaxEddywouldhavepaidonthisamount,taking

intoaccountanyapplicablecreditsreportedontheoriginalreturn.Withataxableincomeof$13,700,thetax

amountfromthetaxscheduleis$1,450.

Tousetheproportionaldistributionmethodinstead,theaidadministratorfiguresoutwhatpercentageofthejoint

AGIEddy’sincomerepresents.Thepercentageis46%(26,100÷56,500is.4619).Theaidadministratorthen

multipliestheincometaxpaidasreportedonthetaxreturn($3,412forthisexample)bythispercentage.Eddy’s

incometaxbyusingthismethodis$1,570(.46x$3,412).

Page 50: Application and Verification Guide

ofanIRSrepresentative.Withonlinerequests,taxfilerscangetanelectronictranscript(seebelow)ortheycanhavethe

IRSmailthemapapertranscript;nononlinerequestsyieldamailedtranscript.Schoolscanacceptandcopytranscripts

originallyobtainedfromtheIRS.

TheGetTranscriptOnlinefeatureallowsuserstogetthetranscriptinrealtimeasaportabledocumentformat(PDF)file,

whichtheycansubmitelectronicallytoaschoolorprintandsubmitasahardcopy.TousetheGetTranscriptOnlinetool,

usersmusthave(1)accesstoavalidemailaddress,(2)atext-enabledmobilephoneintheirname,and(3)specific

financialaccountnumbers,suchasacreditcardnumberoranaccountnumberforahomemortgageorautoloan.The

processwillnotcausechargestothecardortheaccount.SeetheIRS.govwebsiteformoreinformationontheGet

TranscriptService.

TheIRS’sIncomeVerificationExpressService(IVES)allowsathirdpartytoreceiveataxfiler’stranscript.TheIVES

participantsubmitsa4506-Tor4506T-EZform,signedbythetaxfiler,andreceivesthetranscriptfromtheIRS,which

chargesasmallfeefortheservice.SchoolsmayapplytoparticipateinIVES.Theymayalsouseatranscriptfromanother

IVESparticipant(whichisnotconsideredathird-partyservicerinthiscase)forverificationaslongastheyhavenoreason

todoubtitsauthenticity.Schoolsmaynot,however,passonthechargeforusingthisservicetothestudent.

Tocombatidentitytheft,theIRSmasksmuchofthepersonallyidentifiableinformationonthetranscript.Forexample,

onlythelastfourdigitsofanySSNoraccountortelephonenumberaredisplayed.Theoptiononforms4506-Tand4506T-

EZtodesignateathird-partyrecipientofthetranscripthasbeeneliminated.Asnotedabove,schoolscanelectto

participateinIVESasawayofreceivingtranscriptsdirectlyfromtheIRS.Taxpayerswillbeabletohavea“customerfile

number”oftheirchoosingappearonarequestedtranscript,whichwillfacilitateidentification.Thiscanbesomethinglike

astudent’scollegeIDnumberorsomeothernumber(butnotanSSN).SeetheOctober4,2018,announcementandthe

IRSnewsreleaseformore.

EachyeartheDepartmentprovidesataxreturntranscriptmatrixtoassistschoolswithreviewingtaxdata.Specifically,

thetaxreturntranscriptmatrixconsistsofachartoftheFAFSAandISIRtaxitemsusedforverificationandtheir

correspondinglineitemsfromthevariousIRStaxreturnsandthetaxtranscriptfortheappropriateawardyear.Atthe

timethe2022–2023ApplicationandVerificationGuidewaspublished,the2022–2023taxreturntranscriptmatrixhadnot

beenpostedtoFSA’sKnowledgeCenter.PleasestaytunedtotheelectronicannouncementsectionintheKnowledge

Centerforthelatestinformation.

Thetaxreturntranscriptmayshowapercomputeramountforsometaxdatathatisdifferentfromwhatthefiler

reportedtotheIRS.Thepercomputeramountshouldbeusedbecauseitcorrectsmathematicalerrorsandismore

accuratethanwhatappearsontheoriginalreturnorwastransferredviatheDRT.Thisguidancestillholds,butbecause

theDRTreportspercomputervaluesforAGI,incometaxpaid,andeducationtaxcredits,thereshouldnotbemany

discrepanciesbetweenDRTdataandthetranscript.Also,ifatranscriptindicates“recomputed<taxreturnitem>per

computer,”thatamountmaybeignoredforverification.

SchoolsmayacceptforverificationanyIRStaxtranscriptthatincludesallofthenecessaryinformation:adjustedgross

income,U.S.incometaxpaid,untaxedIRAdistributions,untaxedpensions,educationcredits,IRAdeductionsandtax-

exemptinterest.BecausetherecordofaccountandtheReturnTranscriptforTaxpayer(RTFTP)includealloftheabove

information,eithermaybeusedforverification.TheInformationReturnsProcessingTranscriptRequest—Wages(IRPTR-

W)onlyprovideswageinformationandthereforecanonlybeusedinlieuofaW-2form.SeetheFebruary23,2017,

announcementforinformationaboutthedocumentsobtainedfromtheIRSthatareusedforverification:thetaxreturn

transcript,therecordofaccount,theaccounttranscript,andthewageandincometranscript.Theannouncementalso

explainsForm13873,whichstudentsorparentsmightreceivewhenrequestingdocumentsfromtheIRS.

Rolloversandverification

Qualifiedrolloversfromoneretirementaccounttoanotherarenottaxable,andtheyshouldnotbecountedasuntaxed

income(asindicatedinChapter2).SinceneithertheDRTnorataxtranscriptidentifiesrollovers,youmustget

documentationfromthetaxfiler.Thiscouldbeasignedstatementwiththerolloveramountoranotationbythefileron

thetaxtranscriptthatincludestheword“rollover”besideanyapplicableitem,similartotheinstructiontheIRSgivesfor

Form1040.Theannotationmustbesignedanddatedbythefiler.ForthosewhousedtheDRT,asignedconfirmationthat

theIRAorpensiondistributionincludedarolloverwouldsuffice;ataxtranscriptwouldonlybeneededifotherIRStax

informationwaschanged.SeeVI-Q4ontheQandApage.

https://www.irs.gov/individuals/get-transcript
https://www.irs.gov/individuals/international-taxpayers/income-verification-express-service
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2018-10-04/general-subject-irs-announced-updated-tax-transcripts-redacting-sensitive-information
https://www.irs.gov/newsroom/irs-to-introduce-new-tax-transcript-to-better-protect-taxpayer-data
https://fsapartners.ed.gov/knowledge-center
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2017-02-23/verification-subject-verification-irs-documentation-requests-uses-and-messaging
https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html#ver
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Usingthetaxreturn

AlthoughtheDRTandtaxtranscriptarepreferableforcompletingverification,studentscanalsosubmitacopyofthetax

returnandanyapplicableschedules.However,seetheguidanceundervictimsofidentitytheftlaterinthisvolumeforan

importantcaveat.Thetaxreturnwilllikelyhavebeenfiledelectronicallywithoneofavarietyofmethods.Theseinclude

do-it-yourselfmethodsaswellascompletionbyataxpreparer.Eachmethodshouldpermitprintingofapapercopyofthe

return,thoughthee-fileformatmightnotcontaineverylineitem,showinginsteadonlythedatathetaxfilerprovided.For

example,ifItem2b,“Taxableinterest,”doesnotappearonsuchareturn,thatmeansnotaxableinterestincomewas

reported.

Youcanacceptapaperorelectroniccopyofthereturnaslongasitcontainsasignature.Acceptableexampleswould

include,butarenotlimitedto:

1. Asignedpaperreturnthatthestudenteithermailedorbroughttotheschool.

2. Asignedpaperreturnthatthestudentfaxedorscannedandemailed.

3. Anelectroniccopythatthestudentsignedwithastylusorfinger.

4. Anelectroniccopythatweconsidersignedbecauseithasanimageofthestudent’ssignatureattached.

However,asignatureonForm8879,theIRSe-fileSignatureAuthorization,isnotanacceptablesubstituteforasignature

onthetaxreturn.

Forpersonswhohaveataxprofessionalpreparetheirreturn,insteadofacopyofthereturnwiththefiler’ssignature,you

mayacceptonethathasthenameandPTINofthepreparerorhashisorherSSNorEINandhasbeensigned,stamped,

typed,orprintedwithhisorhernameandaddress.NotethattheIRSrequirespaidpreparerstohaveaPTIN.

Ifapersondidnotretainacopyofhisorher2020taxinformationanditcannotbelocatedbytheIRSortherelevant

governmentagency,heorshemustsubmitasignedstatementindicatingthattheydidnotkeepacopyoftheirtax

informationaswellasdocumentationfromthetaxingauthorityindicatingthatthatinformationcannotbelocated.Also,

youmustacceptforanIRSfilereitheracopyofFormW–2foreachsourceofemploymentincomereceivedfor2020or,if

heorsheisself-employed,asignedstatementcertifyingtheamountofAGIandtaxespaid.Forsomeonewhofiledan

incometaxreturnwithagovernmentofaU.S.territoryorcommonwealthoraforeigncentralgovernment,acceptacopy

ofawageandtaxstatementorasignedstatementcertifyingtheamountofAGIandtaxespaidfor2020.

IfaW-2isnotavailable

IfanindividualwhoisrequiredtosubmitanIRSFormW-2didnotsaveacopy,heorsheshouldrequestareplacementW-

2fromtheemployerwhoissuedtheoriginal.AW-2transcriptfromtheIRSisalsoacceptablethoughitgenerallyisnot

availableuntiltheyearaftertheW-2informationisfiledwiththeIRS(e.g.,2022for2020informationfiledin2021).Ifhe

orsheisunabletoobtainoneinatimelymanner,youmaypermithimorhertoprovideasignedstatementthatincludes

theamountofincomeearnedfromwork,thesourceofthatincome,andthereasonwhytheW-2isnotavailableina

timelymanner.

Immigrantsandtaxfil ing

Immigrantsarenotexemptfromtaxfiling.TheIRSismoreconcernedwhetherapersonisaresidentornonresident—

ratherthanlegalorillegal—alien.AnalienisanyonewhoisnotaU.S.citizenornational.Aresidentalienisonewho

eitherisapermanentresidentorhasresidedintheU.S.foraspecificminimumamountoftime(hasmetthesubstantial

presencetest).Allothersarenonresidentaliens.Residentaliens’incomeisgenerallysubjecttotaxinthesamemanner

asU.S.citizens’,andtheyfileForm1040.NonresidentalienswhoarerequiredtofileareturnsubmitForm1040NRor

1040NR-EZ;bothformsareacceptabledocumentationforverification.

ImmigrantswhodonothaveanSSNandareunabletogetonecanapplywiththeIRSforanindividualtaxpayer

identificationnumber(ITIN).TheITINisonlyfortaxpurposes.Itdoesnotauthorizeapersontowork,endorsehisorher

legalstatus,orentitlehimorhertotheearnedincomecreditorSocialSecuritybenefits.Itisnottobeusedasan

identifierinplaceoftheSSNontheFAFSAform.

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SeetheIRS’sPublication519,U.S.TaxGuideforAliensatwww.irs.govformoreinformation.

Specialsituations

Filingextensions.BecausetheFAFSAformusesprior-prioryeartaxdata,evenindividualswhohaveanautomatic

six-monthextensionbytheIRSshouldhavecompletedtheirtaxreturnbythetimeofverification.Therefore,they

mustverifyincomeandtaxinformationeitherbyusingtheIRSDataRetrievalToolorbysubmittingtotheinstitution

anIRSTaxReturnTranscript.Onlystudents(andspousesifapplicable)andparentsgrantedanextensionbeyondsix

monthsmaysubmitthefollowingforverification:

acopyoftheIRS’sapprovalofanextensionbeyondtheautomaticsix-monthextensionfortaxyear2020;

verificationofnon-filing(seenon-taxfilersformoreinformation)fromtheIRSdatedonorafterOctober1,2021;

copiesofalltheirW-2forms(orequivalent)for2020employmentincome;and

ifself-employed,asignedstatementwiththeamountsoftheirAGIandU.S.incometaxpaid2020.

YoumayrequirethosewithafilingextensiontousetheDRTorsubmittoyourschoolataxtranscriptorreturnafter

ithasbeenfiled.Ifyoudothat,youmustreverifytheincomeinformation.IfthestudentdoesnotusetheDRTor

submitataxtranscriptorreturn,seetheguidancedescribedunderthe“DeadlinesandFailuretoSubmit

Documentation”sectionlaterinthischapteronfailingtocompleteverification.SeeDOC-Q16ontheQandApage.

ForapersoncalledupforactivedutyorqualifyingNationalGuarddutyduringawar,anothermilitaryoperation,ora

nationalemergency,aschoolmustacceptastatementfromthepersoncertifyingthatheorshehasnotfiledan

incometaxreturnorarequestforafilingextensionbecauseofthatservice.

Jointreturnfilerswhoarenolongermarried.Whenadependentstudent’sparentsfiledajointreturnandhave

separated,divorced,marriedsomeoneelse,orbeenwidowed,thestudentmustsubmitataxtranscriptorreturn

andacopyofeachW-2formfortheparentwhosetaxinformationisontheFAFSAform.Similarly,anindependent

studentmustsubmitataxtranscriptorreturnandacopyofhisorherW-2formsifheorshefiledajointreturnand

isseparated,divorced,orawidow.

Fornon-taxfilersyoumustreceiveaW-2formforeachsourceof2020employmentincomeandasigned

statementcertifyingthatthepersonhasnotfiledandisnotrequiredtofilea2020taxreturn.Youmustalsogeta

signedstatementgivingthesourcesandamountsoftheperson’sincomeearnedfromworknotfoundonW-2s.

Studentsmaysignonanonfilingspouse’sbehalf.

ForresidentsoftheFreelyAssociatedStates(theRepublicoftheMar-shallIslands,theRepublicofPalau,orthe

FederatedStatesofMicronesia),acopyofthewageandtaxstatementfromeachemployer(substituteforW-2s)and

asignedstatementidentifyinganyotheremploymentincomefortheyearnotidentifiedonthewageandtax

statementisacceptable.PersonsfromaU.S.territoryorcommon-wealthoraforeigncountrywhoarenotrequired

tofileataxreturncanprovideasignedstatementcertifyingtheirincome.

Youmustalsorequiretheperson(exceptdependentstudents)tosubmita“VerificationofNonfiling(VNF)Letter”

fromtheIRSdatedonorafterOctober1,2021,attestingthatheorshedidnotfilea2020IRStaxreturn.The

nonfilercangetthisbysendingIRSForm4506-Tandcheckingbox7.AlsoacceptableisotherIRSdocumentation

thatclearlystatestheIRSdoesnothaveataxrecordfortheyear,suchasareturntranscriptwiththemessage“no

recordofreturnfiled”or“notranscriptonfile.”Messagesthataren’tasclear,suchas“couldnotbeprocessed,”are

notacceptablealternatives.SeetheFebruary23,2017,electronicannouncementformoreinformation.

Personssubjecttoforeigntaxcodeswouldsubmitacomparabledocument;seeDOC-Q30ontheQandApage.Note

thatverificationofnonfilingonlyshowsthatapersondidnotfileataxreturn,notthatheorshewasnotrequiredto

fileone.SeeChapter5ifapersonwhosefinancialinformationwasontheFAFSAformdidnotfileataxreturnwhen

itappearsheorshewasrequiredto,andseeDOC-Q29ontheQandApageaboutnon-taxfilerswholackany

identifyingnumber(e.g.,SSN)neededtogetaconfirmationofnonfilingfromtheIRS.

Individualswhocan’tgetaVNFletterfromtheIRS(orothertaxauthority)mayinsteadsubmitasigned

statementaslongastheschoolhasnoreasontoquestionthestudent’sorfamily’sgood-faithefforttoacquirethe

letter.Form4506-Tstatesthatmostrequestsareprocessedwithin10businessdays,soatleastthatamountoftime

shouldelapsebeforeschoolsresorttoasignedstatement.Also,sinceaVNFmustbedatedonorafterOctober1,

2021,thestatementcannotbesignedandusedbeforethatdate.

ThestatementmustassertthatthepersonattemptedbutwasunabletogettheVNF.Fornon-taxfilers,the

statementmustalsoconfirmthattheyhavenotfiledandarenotrequiredtofileataxreturnfortherelevantyear,

http://www.irs.gov/
https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2017-02-23/verification-subject-verification-irs-documentation-requests-uses-and-messaging
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anditmustlistthesourcesandamountsofincomeearnedfromwork.Forextensionfilers,thestatementmustalso

confirmthattheyhavenotyetfiledareturnforthetaxyearandmustlistthesourcesandamountsofincome;if

theyareself-employed,itmustincludetheamountofAGIandU.S.incometaxpaid.Notethatinbothcases—for

non-taxfilersandextensionfilers—theotherrequireddocumentation(e.g.,W-2forms)muststillbeprovided.

Forfilersofnon-IRStaxreturns,youmayacceptatranscriptfromagovernmentofaforeignnationoraU.S.

territoryorcommonwealththathasallofthefiler’sincomeandtaxdatatobeverified.Oryoumayacceptacopyof

thetaxreturn,whichmustbesignedbythefileroroneofthefilersofajointreturn.Usetheincomeandtaxdata

thatmostcloselycorrespondstowhatisontheIRStaxreturn,andconvertmonetaryamountsintoU.S.dollarsas

appropriate.Ifyouquestiontheaccuracyoftheinformationonthesignedcopyofthereturn,thefilermustprovide

youwithacopyofthetaxaccountinformationissuedbythetaxauthority.SeeDOC-Q28ontheQandApage.

Filersofamendedreturns.Studentsorparentswhofileanamendedreturn(IRSForm1040X)canusetheDRT

thoughtheISIRwillshowanIRSRequestFlagvalueof07(formoreinformationreviewthe“IRSDataRetrievalTool”

sectioninChapter2).Becausethetaxreturntranscriptdoesnotreflectchangestotheoriginalreturnbythefileror

theIRS,itisbyitselfnotsufficient.Sowhenanamendedreturnwasfiled,youmustsubmitanychangestonondollar

itemsandtosinglemonetaryitemsof$25ormore.Tocompleteverificationyouwillneedasignedcopyofthe

1040Xformthatwasfiledaswellaseither

IRSDRTinformationonanISIRrecordwithalltheinformationfromtheoriginaltaxreturnor

anyIRStranscript(whichdoesnothavetobesigned)thatincludesalltheincomeandtaxinformationrequired

tobeverifiedorasignedcopyofthetaxreturnandapplicableschedules.

Notethattheremayberarecaseswhenastudent,spouse,orparentdidnotfilea1040XwiththeIRSbuthadtheir

taxandincomeinformationamendedbytheIRS.Insuchacaseaschoolmayacceptoneoftheitemsmentioned

aboveplusdocumentationshowingtheIRS’schange(s).PleasenotethatiftheIRSamendsthereturn,theIRS

RequestFlagvaluewillalsobelabeled07.

VictimsofidentitytheftwhocannotgetareturntranscriptorusetheDRTsubmitaTaxReturnDataBaseView

(TRDBV)transcriptaswellasasignedanddatedstatementindicatingthattheywerevictimsoftax-relatedidentity

theftandthattheIRSisawareofit.TheydothisbycallingtheIRS’sIdentityProtectionSpecializedUnit(IPSU)at

800-908-4490.AftertheIPSUauthenticatesthetaxfiler’sidentity,heorshecanasktheIRStomailtheTRDBV

transcript,whichisanalternatepapertranscriptthatwilllookdifferentthanaregulartranscriptbutthatisofficial

andcanbeusedforverification.Unlessyoudoubtitsauthenticity,youdon’tneedtogetanIRSsignatureorstampor

anyothervalidation.SeeDCLGEN-14-05forasampleTRDBVtranscript.ThosewhocannotobtainaTRDBV

transcriptmayinsteadsubmitacopyofthetaxreturnoranotherofficialIRStranscriptorequivalentIRSdocumentif

itincludesalloftheincomeandtaxinformationrequiredtobeverified.Notethatfilersmustfirstattempttogeta

TRDBVbeforetheycanuseacopyofthetaxreturnoranothertranscript.Then,aslongastheschoolhasnoreason

todoubtthevictimofidentitytheftortheaccuracyofthedocument,itcanbeusedtocompleteverification.

StudentseligibleforanautomaticzeroEFC.Adependentstudentinthiscategorywhoisplacedin

VerificationTrackingGroupV1orV5onlyhastoverifythefollowinginformation:

1. hisorherparents’AGIiftheyweretaxfilers;

2. theirincomeearnedfromworkiftheywerenon-taxfilers(whomustalsofollowtheguidancegivenfornon-

filers);and

3. thestudentmustalsoverifyidentityandsignastatementofeducationalpurposeifingroupV5.

Anindependentstudentonlyhastoverify:

1. hisorherand,ifapplicable,hisorherspouse’sAGIiftheyweretaxfilers;

2. theirincomeearnedfromworkiftheywerenon-taxfilers(whomustalsofollowtheguidancegivenfornon-

filers);

3. identity(student-mustalsosignastatementofeducationalpurposeifingroupV5);and

4. thenumberofhouseholdmemberstodetermineifthestudenthasanydependentsotherthanaspouse.

AllstudentseligibleforanautozeroEFCwhoareplacedinVerificationTrackingGroupV4mustverifyidentityand

signastatementofeducationalpurpose.

Householdsize

Todocumentthehouseholdsize,thestudentneedstoprovideastatementsignedbyhimorherand,ifdependent,at

leastoneparentthatgivesthename,age,andrelationshiptothestudentofeachpersoninthehousehold.

https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html#acc
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Youdon’thavetoverifyhouseholdsizeinthefollowingsituations:

Foradependentstudent,thehouseholdsizereportedistwowithasingle,divorced,separated,orwidowedparentor

isthreewithparentswhoaremarriedorareunmarriedandlivingtogether

Foranindependentstudent,thenumberreportedistwoifthestudentismarriedoroneifthestudentissingle,

divorced,separated,orwidowed

Keepinmindthathouseholdsizeneedstoalignwiththeanswerstotherelevantdependencystatusquestions,suchas

theoneabouthavingdependentsotherthanaspouse.Ifverificationrevealsthatanswersdonotmatch,theFAFSAform

needstobecorrectedsothattheinformationisinalignment.

Numberincollege

Youcandocumentthisitemwithastatementsignedbythestudent(and,ifheorsheisdependent,atleastoneparent)

thatgivesthenameandageofeachpersoninthehousehold(excludingtheparentsofadependentstudent)whois

enrolledatleasthalftimeinadegreeorcertificateprogramataneligiblepostsecondaryinstitutionalongwiththename

ofeachpostsecondaryinstitution.Thisstatementcanalsobewrittentodocumenthouseholdsizeaswell.Completionof

theDepartment’sverificationsuggestedtextcansatisfybothitemsasoutlinedinGEN-21-06.

Ifyouhavereasontodoubttheenrollmentinformationreported,youmustobtainfromeachschoolastatementthatthe

namedpersonwillattendthereonatleastahalf-timebasis.Youdon’thavetogetsuchastatementifthepersonhasnot

yetregistered,isattendinglessthanhalftime,orwillbeattendingyourschool.

IfyouhavereasontodoubtwhetherareportedschoolisTitleIVeligible,youmustinsureitis,suchasbycheckingtosee

ifithasafederalschoolcodeorcheckingwithyourregionalschoolparticipationdivision.

Youdon’thavetoverifythenumberincollegeifthereportednumberenrolledisone(thestudentonly).

Identityandstatementofeducationalpurpose

Studentsshouldappearinpersonatyourschoolandpresentavalid,unexpired,1government-issuedphotoidentification

(ID)suchasaU.S.passport,adriver’slicenseorotherstate-issuedID.Anunexpiredvalidgovernment-issuedphoto

identificationisoneissuedbytheU.S.government,anyofthe50States,theDistrictofColumbia,theCommonwealthof

PuertoRico,afederallyrecognizedAmericanIndianandAlaskaNativeTribe,AmericanSamoa,Guam,theVirginIslands,

theCommonwealthoftheNorthernMarianaIslands,theRepublicoftheMarshallIslands,theFederatedStatesof

Micronesia,ortheRepublicofPalau.

YoumustmaintainanannotatedcopyofthatIDthatincludesthedateitwasreceivedandthenameofthepersonyour

schoolauthorizedtoreceiveit.2NotethatanIDissuedbyastateuniversityorcollegeisnotsufficientforthispurpose.

NorisamilitaryIDsince18U.S.Code§701prohibitsitfrombeingphotocopied.

Householdsizedocumentation

34CFR668.57(b)

Numberincollegedocumentation

34CFR668.57(c)

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Studentsmustalsosign(itmustbea“wet”signature)astatementofeducationalpurposethatcertifieswhotheyareand

thatthefederalstudentaidtheymayreceivewillonlybeusedforeducationalpurposesandforthecostofattendingthe

schoolforthe2022–2023year.UnliketheothersuggestedtextprovidedinGEN-21-06,thetextforthe“Statementof

EducationalPurpose”isnotsuggested—youmustusetheexactlanguagegiven(thestudent’sidentificationnumber

isoptionalthoughifcollectedelsewhereonthesamepageasthestatement).Afterexaminingthestatement,youmay

convertitintoanelectronicrecord.YoumustkeepthatortheoriginalforatleasttherequiredTitleIVrecordretention

period.

Astudentwhoisunabletoappearatyourschoolmustgotoanotarypublicandsignthestatementofeducational

purpose.Heorshemustthensubmittoyourofficethatstatement(again,withthe“wet”signature),acertificationfrom

thenotarythatheorsheappearedbeforethenotaryandpresentedagovernment-issuedphotoIDconfirminghisorher

identity,andacopyofthesameID.CurrentlytheDepartmentdoesnotauthorizetheuseofonlinenotaryservicesasan

alternativetotraditional,in-personnotaryservices.

TheREALIDActaffectspeopleenteringcertainrestrictedareaswhereidentificationisrequired:federalfacilities,

nuclearpowerplants,andfederallyregulatedcommercialairplanes.Becausetherearecurrentlynorestrictionsunderthe

actonagenciesacceptinganIDthatisnotcompliantwiththeact(typicallyonemarked“notforfederalidentification”)

forotherpurposes,suchanIDisacceptableforverificationofidentity/statementofeducationalpurpose.Itmustbea

government-issuedIDthathasnotexpiredandincludesthestudent’sphotoandname.

1TheIDjustneedstobeunexpiredatthetimeitischecked.Forprovingidentity,itdoesnotmatteriftheIDisduetoexpireduringtheawardyear.

2Theschoolmaydeterminewhichofitsstaffareauthorizedtoreviewanapplicant’sidentity.Werecommendthattheperson(s)befull-timestaffand

theschoolkeeparecordofwhotheyare.

InterimDisbursements

Interimdisbursementsareallowedeitherpriortocompletingverificationorafterverificationbutbeforereceivingthe

correctedSARorISIR.IfyouhavenoreasontoquestiontheaccuracyoftheinformationontheFAFSAform,priorto

completingverificationyoumayatyourdiscretion

1. makeonedisbursementofPellandFSEOGfundsfortheapplicant’sfirstpaymentperiod;

2. permitFWSemploymentforthefirst60consecutivedaysafterthestudentenrollsfortheawardyear;or

3. originatebutnotdisburseaDirectSubsidizedLoan.

IfverificationresultsinchangestotheFAFSAinformationthatyoudeterminewillnotalterawardamounts,youmayat

yourdiscretiontakeactions1–3aswellasdisburseaDirectSubsidizedLoanpriortoreceivingthecorrectedvalidSARor

ISIR(definedasaSARorISIRonwhichalltheinformationreportedonastudent’sFAFSAformisaccurateandcomplete

asofthedatetheapplicationissigned;see34CFR668.2).

Overpaymentsfrominterimdisbursements

IfpriortoverificationyoumakeaninterimdisbursementofPellorFSEOGfunds,yourschoolisliableforanyoverpayment

thatresults.Ifyoucan’teliminateitbyreducingsubsequentdisbursementsorhavingthestudentreturnthemoney,your

schoolmustuseitsownfundstoreimbursetheappropriateprogrambytheearlierof60daysafterthestudent’slastday

ofattendanceorthelastdayoftheawardyear.

IfpriortoverificationyourschoolpermitsprovisionalFWSemploymentofstudentsforupto60days,itisliableforany

Interimdisbursements

34CFR668.58

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overpaymentitcan’trecoverbyadjustingotheraid,anditmustreimbursetheFWSaccountfromitsownfunds.Students

mustbepaidforallworkperformedoutofyourschool’spayrollaccount—theycan’tberequiredtorepayFWSwages

earnedexceptwhentheyareprovenguiltyoffraud.

IfyoumakeaninterimdisbursementaftercompletingverificationbutpriortoreceivingacorrectvalidSARorISIR,and

youfailtoreceivetheSARorISIRwithinthedeadlinesdiscussedlaterinthischapter,yourschoolmustuseitsownfunds

toreimbursetheappropriateprogramandensurethatthestudentispaidunderitsownpayrollaccountforallwork

performed.

Schoolsthatcan’tmakeinterimdisbursements

SchoolsontheHeightenedCashMonitoring2(HCM2)andReimbursementpaymentmethods(seeVolume4,Chapter1)

must,aspartoftheirrequestforTitleIVfundsfromtheDepartment,submitdocumentationshowingthatstudentswere

eligibletoreceivethefundsdisbursedtothem(andforwhichtheschoolsareseekingreimbursement).Becausefinal

determinationofstudenteligibilityincludescompletingverification,HCM2andreimbursementschoolsarenotableto

makeinterimdisbursements.

UpdatingInformation

Generally,astudentcannotupdateinformationthatwascorrectasofthedatetheapplicationwassignedbecausethe

FAFSAformisconsideredtobea“snapshot”ofthefamily’sfinancialsituationasofthatdate.Forexample,ifthe

student’sfamilysoldsomestockafterthestudentsignedtheFAFSAformandspentthemoneyonanunreportedasset

suchasacar,heorshecan’tupdatetheirinformationtoshowachangeinassets.AftertheFAFSAformissigned,only

certainitemscanbeupdatedunderthefollowingconditions:

1. AllapplicantswhosedependencystatuschangesmustupdatethatandtherelatedFAFSAinformation

throughouttheawardyearexceptwhentheupdateisduetothestudent’smaritalstatuschanging.

2. AllapplicantsselectedbytheDepartmentoraschoolforverificationofhouseholdsizeornumberin

collegemustupdatethosenumberstobecorrectasofthedateofverificationunlesstheupdateisduetoachange

inthestudent’smaritalstatus.Documentinghouseholdsizeornumberincollegeisnotrequiredinasubsequent

verificationinthesameyeariftheinformationhasnotchanged.

Atyourdiscretionyoumayupdateundereither1or2eveniftheupdateisduetoachangeinthestudent’smaritalstatus

ifyoudeemitnecessarytoaddressaninequityortoreflectmoreaccuratelythestudent'sabilitytopay.Suchadecision

mustbeonacase-by-casebasis,andyoumustdocumentyourreasonsforit.Youmustalsoupdateallotherpertinent

information,suchasspousalincomeandtaxespaid,tobeconsistentwiththenewmaritalstatus.Dothisfirstifthe

studentisselectedforverification,andthencompleteverificationoftheupdatedapplication.Ifyouchangethestudent's

statustounmarriedandthatmakeshimorherdependent(becauseheorshewasindependentonlyduetomarriage),his

orherFAFSAformmustbeupdatedwithhisorherparents’information.Yourschoolmayhaveapolicyofnotconsidering

Recoveryoffundsfrominterimdisbursements

34CFR668.61

Updatinginformation

34CFR668.55

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suchupdatesafteraspecificcensusdate.

Note,however,thatyoucannotupdatethemaritalstatusofanalreadyindependentstudentwhosedependencystatus

hasnotchangedbecauseofhisorhermarriageordivorceandwhowasnotselectedforverification.Insuchacaseyou

mustselectthestudentforverificationifyouwanttoexerciseyourdiscretiontoupdatetheirmaritalstatusandallother

associatedinformation.

Parentremarriageafterapplying

Whiletheapplicantdoesnottypicallyupdatehouseholdsizeornumberincollegebecauseofachangeinhisorher

maritalstatus,iftheapplicantisadependentstudentandhisorsheparentremarriesbetweenapplicationand

verification,hemustupdatehouseholdsizetoincludethenewstepparent.However,thestudentwouldnotcountthenew

stepparent’sincomeandassets.Aschoolcanuseprofessionaljudgmenttoincludethestepparent’sincomeorto

otherwiseaccountforthechange.SeeHEASec.475(f)(3)and34CFR668.55(b).

CorrectingErrors

Asexplainedinthelastsection,youonlymakeupdatesinspecifiedsituations,butforstudentswhoarenotselectedfor

verification,youortheymustcorrectandsubmitforprocessinganyerrorsreportedontheoriginalFAFSAformthatwould

changetheEFCorthestudents’eligibilityforTitleIVaid.

Forstudentswhoareselectedforverificationandreceivingsubsidizedstudentaid,changestoanynon-dollaritemandto

anydollaritemof$25ormoremustbesubmittedforprocessing.Seethesectionbelowon"changesinaselected

applicant’sFAFSA."

ChangesinaSelectedApplicant'sFAFSA

Toreceivesubsidizedstudentaid,studentsortheschoolmustsubmitforprocessinganychangesresultingfrom

verificationtoanon-dollaritemorasingledollaritemof$25ormore.Also,ifyouarerequiredtosubmitanychange

throughCPSbecauseofverification,youmustsubmitallchanges,includingamountsthatarebelow$25.

Campus-BasedandDirectLoanchanges

WhenstudentsreceivesubsidizedstudentaidotherthanPellGrantsandthereisachange,adjustthepackageonthe

basisoftheEFConthecorrectedvalidSARorISIR.Iftherewasaninterimdisbursement,complywiththerelevantrulesif

thepackagemustbereduced.Iftherewasaregulardisbursementandthepackagemustbereduced,complywithFSEOG

overpaymentrulesorwiththerulesfordealingwithexcessloanproceedsforDirectSubsidizedLoans.

Pellchanges

IfFAFSAdatachange,recalculatethePellGrantaccordingtotheEFConthecorrectedvalidSARorISIR.Youcanonlypay

anincreasedPellGrantifyouhavethatoutputdocumentanditsupportsanincreasedPellaward.

IfthePellGrantisreducedandthestudentreceivedaninterimdisbursement,adjustfollowingdisbursementsas

necessary.Failingthat,thestudentshouldreimbursethePellGrantProgram,or,ifheorshedoesnotreturnthe

overpayment,yourschoolmustreimbursethePellprogramwithitsfunds.IfthestudentreceivedPellGrantmoneyasa

regulardisbursement,heorsheisresponsibleforrepayingtheoverpayment.SeeVolume4,Chapter3forinformationon

ChangestoFAFSAinformation

34CFR668.59Whenthereisanoverawardfromaregulardisbursement,thefollowingindividualprogram

regulationsapply:PellGrants:34CFR690.79FSEOG:34CFR673.5(f)SubsidizedDirectLoan:34CFR685.303(g)

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overpayments.

Selectionafterdisbursement

Astudent’sapplicationmightbeselectedforverificationaftercorrectionsaresubmittedandthestudenthasbeenpaid

basedonthepreviousunselectedCPStransaction.Youmustverifyhisorherapplicationbeforemakingfurther

disbursements.Ifverificationdoesnotjustifyaidalreadydisbursed,thenthestudentisresponsibleforrepayingallaidfor

whichheorsheisnoteligible,thoughthestudentmaykeepanyDirectLoanmoneyheorshereceivedandFWSwages

earned.Seetheguidancedescribedunderthe“DeadlinesandFailuretoSubmitDocumentation”sectionlaterinthis

chapterforwhathappensifthestudentfailstocompleteverification.

Example:OwenisattendingGuerreroUniversity.Hisapplicationisn’tselectedforverification,andhereceivesaidinthe

fall.InDecember,OwensubmitsacorrectiononhisSARthatcausestheensuingtransactiontobeselectedfor

verification.TheaidadministratoratGuerrerotellsOwenheneedstosubmitverificationdocumentsifhewantshisaidfor

thespringandifhewantstokeepthePellfundshereceivedforthefall.However,Owendoesn’tturninthedocuments.

Owendoesn’thavetorepaytheDirectLoanhegotinthefall,buthedoeshavetoreturnthePellGrant,andGuerrero

mustcancelhisaidpackageforthespring.

Disbursingunsubsidizedaid

ForstudentswhoareselectedforGroupV1andareeligibleforbothsubsidizedandunsubsidizedaid,aschoolmay,ona

case-by-casebasisandwithproperdocumentation,disburseDirectUnsubsidizedandPLUSloanspriortocompleting

verificationthatwillbedelayed.Toavoidexceedingthestudent’sfinancialneed,theschoolmustconsiderthesubsidized

aidheorshewillreceiveandadjusttheaidamountsafterverificationifnecessary.

IfthestudentnevercompletesV1verification,theDirectUnsubsidizedandPLUSloanaidthatwasdisbursedmaybekept.

Ifit’sdeterminedthatthestudentwasineligiblewhenheorshereceivedaid,seetherelevantguidanceonreturningaid

insuchsituationsinVolume4,Chapter3.

Afterdocumentationiscomplete

Whenyou’veobtainedallnecessaryverificationdocumentsfromthestudent,youshouldcomparethemtotheSARorISIR

youarereviewingforpayment.Ifallthestudent’sinformationiscorrectorhasbeencorrectedandthereareno

outstandingissuesorconflictinginformationthatyouhavenotresolved,youmayawardanddisburseaidforwhichthe

studentiseligible.

SometimesschoolsaskifevenfurtherverificationisneededtoresolvediscrepanciesbetweentheISIRandwhatthe

studentprovidedforverification.Theanswerisno,unlessyouhavereasontodoubttheaccuracyoftheverification

information.AcceptabledocumentationeitherconfirmsthatanitemwasrightontheISIR,oritisusedtocorrectthat

item.Thatisthepurposeofverification;continuedfact-findingisnotnecessary.

HowtoSubmitCorrectionsandUpdates

CorrectionsandupdatescanbesubmittedbythestudentontheSARortheweborbytheschoolusingFAAAccesstoCPS

OnlineortheElectronicDataExchange(EDE).Inadditiontothefollowinginformation,seealso“CorrectionsandUpdates”

inthe2022–2023ISIRGuide.

UsingtheonlineFAFSA

AnystudentwhohasanFSAID—regardlessofhowheorsheoriginallyapplied—maycorrectanyofhisorherowndatain

theonlineFAFSA.Ifdependentstudentsneedtochangeparentaldata,aparentmusteithersignelectronicallywithhisor

herownFSAIDorprintoutandsignasignaturepage.

SubmittingchangesviaFAAAccesstoCPSOnlineorEDE

YourschoolcansubmitcorrectionsandupdateselectronicallythroughFAAAccesstoCPSOnlineorEDExpressevenifthe

originalapplicationwasn’tsubmittedwiththatmethod.Ifyourschoolisn’tlistedonthetransactionyouwanttocorrect,

https://fsapartners.ed.gov/knowledge-center/library/handbooks-manuals-or-guides/2021-07-12/2022-2023-isir-guide
https://studentaid.gov/h/apply-for-aid/fafsa
https://faaaccess.ed.gov/FOTWWebApp/faa/faa.jsp
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thestudentwillhavetogiveyoutheDRNprintedontheSARorSARAcknowledgementsothatyoucanaddyourschoolin

thenextavailableinstitutionfieldandthengetelectronicaccesstotheresultingcorrectedtransaction.Ifallthefieldsare

filled,thestudentwillhavetotellyouwhichschooltoreplacewithyours.

Correctionsandupdatessentbyaschoolmustbebasedonreliabledocumentationinitspossessionthatsupportsthe

changestoapplicantdataorsigneddocumentationfromthestudentorparentofadependentstudent.Examplesof

reliabledocumentationincludeapplicationsforadmission,acceptanceletters,courseregistrationinformation,or

academictranscripts.Examplesofsigneddocumentationfromastudentorparentonwhichcorrectionsandupdatesmay

bebasedincludePart2oftheSAR,acopyofthecorrectionorupdate,student/parentstatement,verificationdocuments,

orcopiesoftaxreturnsortranscripts.Unlikethosefortheoriginalapplication,thesedonothavetobewetsignatures.

TheCPSwillprocessthechange,sendanISIRtotheschool,andsendthestudentaone-pageSARacknowledgementor,if

theCPShasthestudent’semailaddress,anemailwithalinktohisorherSARinformationontheweb.

UsingtheSARtomakecorrections

StudentswhoreceivedapaperSARmaymakecorrectionsorupdatesonit,thensignandreturnittotheFAFSAprocessor

attheaddressgivenattheendoftheSAR(ofcourse,studentswithFSAIDscaninsteadusetheonlineFAFSA).One

parentmustalsosignifthestudentisdependentandparentdatawaschanged,unlesstheonlycorrectionsaretothe

institutionorhousingcodes,theaddress,ortelephonenumber.

IfthestudentappliedelectronicallythroughaschoolorreceivedanemaillinktoSARinformationonthewebbutwould

liketomakecorrectionswithapaperSAR,heorshecanhaveonemailedtothembycallingtheFSAICat1-800-4-FED-AID

andprovidinghisorhername,SSN,anddateofbirth.

Addingschoolsandchangingastudent’saddress

Aswithotherchanges,astudentcanaddschoolsorchangehisorheraddress,emailaddress,ortelephonenumber

onlineoronapaperSAR.Butheorshecanalsoupdatetheseitemsoverthephonebycalling1-800-433-3243and

providingtheirDRN.YoucansubmitthosechangesforthestudentthroughFAAAccesstoCPSOnline,although,asnoted

before,ifyourschoolwasnotlistedonthestudent’sapplication,youwillneedhisorherDRNtoaddyourschool.

TheFAFSAformhaslimitedspaceforastudenttolistschoolsthatwillreceivetheapplicationdata:fourschoolscan

appearonthepaperapplication,tenwitheithertheonlineFAFSA,FAAAccess,orEDExpress.Ifthestudentwants

informationsenttomoreschools,heorshecanuseanyofthemethodslistedpreviouslytoreplacesomeorallofthe

originalschools,thoughthereplacedschoolswillnotreceiveanISIR.Forexample,ifthestudentoriginallylisted10

schoolsontheapplicationandthenreplacedtwoschoolswithtwonewones,thosethatwerereplacedwouldnotreceive

anISIRfromthiscorrectionoranysubsequentcorrectiononwhichtheydidnotappear.

Signatures

Anyrequiredsignatures,suchasthoseonworksheetsoroncopiesoftaxreturns,mustbecollectedatthetimeof

verification—theycan’tbecollectedaftertheverificationdeadlineforthatawardyear.

Forverificationdocumentation,aschoolmaycollectanelectronicsignatureforanapplicant,parent,orspouseifthe

processincludesanassuranceoftheidentityofthepersonsigning.ThisisoftenaccomplishedwithaPINorpasswordthat

isassignedonlyaftertheidentityofthepersonreceivingthePINorpasswordhasbeenauthenticated(DOC-Q12ontheQ

andApage).

DeadlinesandFailuretoSubmitDocumentation

Youmustrequirestudentsselectedforverification—eitherbyyourschoolortheDepartment—tosubmitthe

documentationbythedatespecifiedbyyourschool(forCampus-BasedandDirectLoans)ortheDepartment(forPell).

Campus-BasedandDirectLoans

Ifastudentdoesn’tprovideverificationdocumentationwithinareasonabletimeperiodthatyourschoolhasestablished,

https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html
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youcannot

disbursemoreFSEOGfunds,

employorpermitfurtherFWSemployment,or

originateordisburseanyadditionalDirectLoans(subsidized,unsubsidized,orPLUS).

ThestudentmustrepayanyFSEOGfundsheorshereceivedthatyear.

Ifthestudentfailstocompleteverificationwithinthetimeperiodestablishedbyyourschoolandifyoureceivedany

DirectSubsidizedLoanfundsforthestudentthatyoudidnotdisburse,youmustreturnsomeorallofthosefundsunder

theexcesscashtoleranceregulation[see34CFR668.166(b)andVolume4,Chapter1].

Notwithstandingthis,ifthestudentprovidesthedocumentationafteryourschool’sdeadline,youmay,atyourdiscretion,

stillprovideaidifstillwithintheDepartment’soverallverificationdeadlines.

PellGrants

AstudentselectedforverificationmaysubmitavalidSARoraschoolcanreceiveavalidISIRafterthePelldeadlinebut

beforetheverificationdeadlinepublishedintheFederalRegister.Ifastudentdoesnotprovidetheverification

documentationoryoudonotreceivethevalidSARorISIR(ifnecessary)withinthisadditionaltime,heorsheforfeitstheir

PellGrantfortheawardyearandmustreturnanyPellmoneyalreadyreceivedforthatyear.

Otherconsiderations

TheDepartmentmaydeterminenottoprocesstheFAFSAformofanapplicantwhohasbeenrequestedtoprovide

documentationuntilheorshedoessoortheDepartmentdecidesthereisnolongeraneedforit.

APellapplicantselectedforverificationmustcompletetheprocessbythedeadlinepublishedintheFederalRegister.The

noticefor2021-2022waspublishedonJune24,2021,andthedeadlineforthatyearisSeptember17,2022,or120days

afterthelastdayofthestudent’senrollment,whicheverisearlier.Whenthenoticefor2022–2023ispublished,the

correspondingdeadlinedateisexpectedtobeSeptember16,2023.Campus-BasedandDirectLoanapplicantsmust

completeverificationbythesamedeadlineorbyanearlieroneyouraidofficeestablishes.

VerificationiscompletewhenyouhavealltherequesteddocumentationandavalidISIRorSAR(oneonwhichallthe

informationisaccurateandcomplete).Thisincludesanynecessarycorrections,whichmustbemadebytheFederal

Registerdeadlinesforsubmittingpaperorelectroniccorrections.

Latedisbursements

Generallyastudentceasestobeeligibleforaidonceheorshehasfinishedthepaymentperiodand/orisnolonger

Failuretosubmitdocumentation

34CFRPellGrants668.60(c);34CFRCampus-Based/DirectSubsidizedLoan668.60(b)

VerificationcompletedwithinadditionaltimeperiodforPell

34CFR668.60(c)(1)

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enrolled.However,thestudentmaysubmitverificationdocumentationandreceivealatedisbursementafterthattimeif

theDepartmentprocessedaSARorISIRwithanofficialEFCwhileheorshewasstillenrolled.Forinformationonpost-

withdrawaldisbursements,seeVolume5andformoreinformationonlatedisbursements,seeVolume4.

Verificationstatuscodes

WhenyoudisburseaPellGrant,youmustreportthestudent’sverificationstatusthroughtheCommonOriginationand

DisbursementSystem(COD)evenifheorshewasn’tselectedforverification.

V—Youhaveverifiedthestudent.ThisincludesstudentsselectedbytheCPSandthoseyourschoolchosetoverifybased

onitsowncriteria.

W—ThestudentwasselectedforverificationbytheCPSoryourschool,andyouchosetopayafirstdisbursementofPell

withoutdocumentation(interimdisbursement).Thiscodemustbeupdatedonceverificationiscomplete,orCOD

willreducethePellGranttozero.InJuly2021,messagesweresenttoschoolsthatstillreporteda“W”statuscodefor

2020-2021studentrecordswarningthatdisbursementsmadeinthesecaseswouldbeconsideredoverawardsand

reducedto$0.Ofcourse,someofthesestudentsmightnotyethavereachedtheverificationdeadline,inwhichcase

schoolscanresubmittheirdisbursementrecord.SeetheApril8,2021electronicannouncement.

S—TheCPSselectedthestudentforverification,butyoudidnotverifythestudentbecauseheorshesatisfiedoneofthe

exclusionsdescribedearlierinthechapter(exceptthepost-enrollmentexclusion;see“Blank”next).

Blank—Reportablankifyouhavenotperformedverificationforotherreasons,i.e.,becauseneithertheCPSnoryour

schoolselectedthestudentorbecausethestudentwasselectedbytheCPSafterceasingtobeenrolledatyourschool

andall(includinglate)disbursementsweremade.Ablankalsoapplieswhenyoudisbursedaidonaninitialtransaction

notselectedforverification,alatertransactionisselected,andthestudentnevercompletesverification.

SuggestedVerificationText

WearenolongerprovidingthesuggestedtextaspartoftheApplicationandVerificationGuide.Toreviewthesuggested

textforthe2022-2023awardyear,pleaseseetheattachmenttoGEN-21-06.Thesuggestedtextfulfillsverification

requirements,butschoolsdonothavetouseit,exceptasnotedbelow.Instead,theymaydevelopandusetheirown(or

someoneelse’s)text,forms,documents,statements,andcertificationsthatarespecifictotheitemsrequiredtobe

verifiedforaparticularstudentorgroupofstudentsattheschool.However,schoolsmustnotputthesealofthe

DepartmentofEducationonanyverificationdocuments.

Theoneexceptionisthatschoolsmustusetheexactlanguageprovidedinthe“StatementofEducationalPurpose”for

studentswhoareplacedinverificationtrackinggroupsV4orV5.Thisdoesnotincludetheaccompanyingnotary’s

certificateofacknowledgment;forthattheschoolmayusesomeotherform,suchastheoneitsstateuses.

https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-04-08/2020-21-verification-reporting-and-verification-status-code-w-warning-message-ea-id-grants-21-04
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Chapter5

SpecialCases

Thereareunusualsituationswhereyouwillneedtoexerciseyourdiscretionasafinancialaidadministrator:when

modifyingdatausedtocalculatetheexpectedfamilycontribution(EFC),performingdependencyoverrides,resolving

conflictinginformation,reportingcasesoffraud,anddeterminingastudenttobeanunaccompaniedhomelessyouth.

Whilemanyquestionsyougetasafinancialaidadministrator(FAA)willhaveroutineanswers,somesituationswillrequire

extradiscretiononyourpart.Toaccountforspecialcircumstancesofastudent,youmaychoosetoexerciseprofessional

judgment(PJ)toadjustastudent’scostofattendanceorthedatathatdetermineastudent’sEFC.Youmightdecidethat

unusualcircumstanceswarrantmakingadependentstudentanindependentstudent.Ifyoureceiveconflicting

informationforastudent,youwillneedtoresolvethediscrepancy.Insomecasesyoumaydiscoverthatastudenthas

beenguiltyoffraudandshouldbereportedtotheDepartment.Andyoumayneedtodetermineifastudentshouldbe

classifiedasanunaccompaniedhomelessyouth.

ProfessionalJudgment

AnaidadministratormayusePJonacase-by-casebasisonlytoadjustthestudent’scostofattendanceorthedataused

tocalculatehisorherEFC.Thisadjustmentisvalidonlyattheschoolmakingthechange.YousubmitaPJchange

electronically,viaFAAAccesstoCPSOnlineorthird-partysoftware,andmaydosowithoutasignaturefromthestudent

orparent.InFAAAccessorElectronicDataExchange(EDE),youmustselect“EFCadjustmentrequested”forthe

professionaljudgmentfield.ThenextISIRwillindicate“Professionaljudgmentprocessed.”

Thereasonfortheadjustmentmustbedocumented(byathirdpartyifpossible),anditmustrelatetothespecial

circumstancesthatdifferentiatethestudent—nottoconditionsthatexistforawholeclassofstudents.Youmustresolve

anyinconsistentorconflictinginformationshownontheoutputdocumentbeforemakinganyadjustments.AnFAA’s

decisionregardingadjustmentsisfinalandcannotbeappealedtotheDepartment.

Thestatutestatesthatnothingwithinitshallbeconstruedaslimitingtheauthorityofaidadministratorstomakedata

adjustmentsforsomesituations.However,thelawgivesexamplesofspecialcircumstances,suchasmedicalordentalor

nursinghomeexpensesnotcoveredbyinsurance.UseofPJisneitherlimitedtonorrequiredforthesituationslisted(see

thesectionentitled“EntiretextoftheHEAsectiononPJ”laterinthischapter).

AnothersituationwhereyoumightwanttouseprofessionaljudgmentinvolvesRothIRAs.Whensomeoneconvertsa

regularIRAintoaRothIRAbytransferringfunds,theamountconvertedhastobereportedastaxableincomeonthetax

return.Therefore,theincomereportedontheFAFSAformwillbehigherthanwithouttheRothconversion,eventhough

thefamilydoesn’tactuallyhaveadditionalincomeorassetsavailable.YoucanusePJtoreducetheincomeandtaxes

paidtotheamountthatwouldhavebeenreportediftherewasnoRothconversionifyouthinktheadjustmentis

warrantedforastudent.Aswiththespecificspecialcircumstanceslistedinthelaw,youarenotrequiredtomakean

adjustmentinthissituation.

Thelawdoesn’tallowyoutomodifyeithertheformulaorthetablesusedintheEFCcalculation;youcanonlychangethe

costofattendanceorthevaluesofspecificdataelementsusedintheEFCcalculation.Inaddition,youcannotadjustdata

elementsorthecostofattendancesolelybecauseyoubelievethetablesandformulaarenotadequateorappropriate.

Thedataelementsthatareadjustedmustrelatetothestudent’sspecialcircumstances.Forexample,ifafamilymember

isill,youmightmodifytheAGItoallowforlowerearningsinthecomingyearormightadjustassetstoindicatethatfamily

savingswillbespentonmedicalexpenses.

YoualsocannotusePJtowaivegeneralstudenteligibilityrequirementsortocircumventtheintentofthelawor

regulations.Forinstance,youcannotusePJtochangeFSEOGselectioncriteria.Norcanyouincludepostenrollment

activityexpensesinthestudent’sCOA.Forexample,professionallicensingcoststobeincurredaftertheenrollment

periodwouldnotbeincludable(thoughone-timelicensingcostsincurredduringtheenrollmentperiodmaybe—seeCost

ofAttendanceinVolume3,Chapter2).

Occasionallyaidadministratorshavemadedecisionscontrarytotheprofessionaljudgmentprovision’sintent.These

“unreasonable”judgmentshaveincluded,forexample,thereductionofEFCsbasedonrecurringcostssuchasvacation

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expenses,tithingexpenses,andstandardlivingexpenses(e.g.utilities,creditcardexpenses,children’sallowances,etc.).

Aidadministratorsmustmake“reasonable”decisionsthatsupporttheintentoftheprovision.Yourschoolisheld

accountableforallprofessionaljudgmentdecisionsandforfullydocumentingeachdecision.

WhenconsideringusingPJ,anFAAshouldkeepinmindthatanincomeprotectionallowance(IPA)isincludedintheEFC

calculationtoaccountformodestlivingexpenses.Beforeadjustingforanunusualexpense,considerwhetheritisalready

coveredbytheIPA.Itisreasonabletoassumethatapproximately30%oftheIPAisforfood,22%forhousing,9%for

transportationexpenses,16%forclothingandpersonalcare,11%formedicalcare,and12%forotherfamily

consumption.TheincomeprotectionallowanceisoneoftheintermediatevaluesintheFAAInformationsectionofthe

outputdocument(labeledas“IPA”).SeeChapter3fortheIPAvaluesandhowtheyimpactthestudent’sEFCcalculation.

Ifyouuseprofessionaljudgmenttoadjustadataelement,youmustusetheresultingEFCconsistentlyforallFSAfunds

awardedtothatstudent.Forexample,ifforawardingthestudent’sPellGrantyouadjustadataelementthataffectsthe

EFC,thatnewEFCmustalsobeusedtodeterminethestudent’seligibilityforaidfromtheCampus-BasedandDirectLoan

programs.

IfyoumakeaPJadjustment,youmustsettheFAAAdjustmentflaginFAAAccesstoCPSOnlineorviathe

ElectronicDataExchange(EDE).

TheDepartmentisawarethattheuseofprior-prioryearincomedataontheFAFSAformmaymakeitmorelikelyforPJs

toapply.Schoolsshouldfollowtheguidelinespresentedhereandbeawarethatwhiletheymayidentifyacategoryof

studentswithsimilarcircumstancestoconsiderforapossibleprofessionaljudgmentadjustment(e.g.,studentswhoquit

jobstostartschool),theymaynot,however,automaticallyprovideidenticaltreatmenttoallstudentsinthatcategory.

EachPJcasemustbedeterminedanddocumentedindividually.

Also,rememberifyouexercisePJforastudentwhowasselectedforverification(byyouortheDepartment),youmust

completeverificationfirst.ThisistoensurethatyouhavecorrectinformationbeforeconsideringaPJadjustment.You

may,however,completeverificationandthenmakethePJadjustmentonthesametransaction.However,youdonot

havetoverifyinformationthatyouwillentirelyremoveduetoPJ.Forexample,ifadependentstudent’sparentshave

separatedaftercompletionoftheFAFSAformandoneparentisnolongerinthehouseholdsizeandyoudecidetousePJ

toremovethatparent’sincomefromtheFAFSAform,youdonothavetofirstverifyhisorherincome.Also,usingPJ

doesnotrequireyoutoverifyastudent’sapplicationifheorshewasnotalreadyselectedforverification

bytheDepartmentoryourschool.

Finally,ithasbeendeterminedthataschoolisnotpermittedtomakeaprofessionaljudgementforastudentafterthat

studenthasceasedtobeeligible.Thisapproachisconsistentwithapplicablestatute(HEASec.479A(a)),whichframes

theauthorityforFAAstomakeprofessionaljudgementsonacase-by-casebasistothecostofattendanceorthevaluesof

thedataitemsrequiredtocalculatetheexpectedstudentorparentcontribution(orboth)asbeingextendedto“allowfor

treatmentofanindividualeligibleapplicantwithspecialcircumstances.”Atthepointwhereastudentisnolonger

enrolledandceasestobeaneligiblestudentforpurposesofthatenrollment,heorsheisnolongerconsideredaneligible

applicant.

TheverificationpageontheFSAAssessmentssitehasguidancetohelpyoureviewyourPJanddependencyoverride

procedures;seeActivity2.

PJexamples

Example1:Kitty’smotherhadincomeearnedfromworkof$25,000in2020butisnolongeremployed.Afterreceiving

documentationconfirmingthis,theFAAatKriegerCollegedecidestoadjusttheAGIreportedforKitty’sparentstotake

intoaccounttheirreducedincome.TheFAAalsoreducestheincomeearnedfromworkforKitty’smothertozero.

Example2:In2020Alanhad$3,550inmedicalexpensesthatwereoutof-pocketcosts.Heismarried,hastwochildren,

andistheonlymemberofhishouseholdincollege,sohisIPAis$41,420.Becausehisexpenseswerelessthanthe

amountformedicalexpensesalreadyprovidedforintheIPA(11%of$41,420is$4,556),theaidadministratoratSarven

TechnicalInstitutedoesnotadjustAlan’sFAFSAform.

Reminder

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EntiretextoftheHEAsectiononPJ

HEASec.479A(a)INGENERAL—Nothinginthispartshallbeinterpretedaslimitingtheauthorityofthefinancialaid

administrator,onthebasisofadequatedocumentation,tomakeadjustmentsonacase-by-casebasistothecostof

attendanceorthevaluesofthedataitemsrequiredtocalculatetheexpectedstudentorparentcontribution(orboth)to

allowfortreatmentofanindividualeligibleapplicantwithspecialcircumstances.

However,thisauthorityshallnotbeconstruedtopermitaidadministratorstodeviatefromthecontributionsexpectedin

theabsenceofspecialcircumstances.Specialcircumstancesmayinclude:

tuitionexpensesatanelementaryorsecondaryschool;

medical,dental,ornursinghomeexpensesnotcoveredbyinsurance;

unusuallyhighchildcareordependentcarecosts;

recentunemploymentofafamilymemberoranindependentstudent;

astudentorfamilymemberwhoisadislocatedworker(asdefinedinsection101oftheWorkforceInvestmentActof

1998);

thenumberofparentsenrolledatleasthalftimeinadegree,certificate,orotherprogramleadingtoarecognized

educationalcredentialataninstitutionwithaprogramparticipationagreementundersection487;

achangeinhousingstatusthatresultsinanindividualbeinghomeless(asdefinedinsection103oftheMcKinney-

VentoHomelessAssistanceAct);or

otherchangesinafamily’sincome,afamily’sassetsorastudent’sstatus.

Specialcircumstancesshallbeconditionsthatdifferentiateanindividualstudentfromaclassofstudentsratherthan

conditionsthatexistacrossaclassofstudents.Adequatedocumentationforsuchadjustmentsshallsubstantiatesuch

specialcircumstancesofindividualstudents.

Inaddition,nothinginthistitleshallbeinterpretedaslimitingtheauthorityofthestudentfinancialaidadministratorin

suchcases:

1. torequestandusesupplementaryinformationaboutthefinancialstatusorpersonalcircumstancesofeligible

applicantsinselectingrecipientsanddeterminingtheamountofawardsunderthistitle,or

2. toofferadependentstudentfinancialassistanceundersection428HoraFederalDirectUnsubsidizedStaffordLoan

withoutrequiringtheparentsofsuchstudenttofilethefinancialaidformprescribedundersection483ifthestudent

financialaidadministratorverifiesthattheparentorparentsofsuchstudenthaveendedfinancialsupportofsuch

studentandrefusetofilesuchform.

Nostudentorparentshallbechargedafeeforcollecting,processing,ordeliveringsuchsupplementaryinformation.

Dependentstudentswithoutparentsupport

Dependentstudentswhoseparentsrefusetosupportthemarenoteligibleforadependencyoverride,buttheymaybe

abletoreceivedependentlevelunsubsidizedDirectLoansonly.Forastudenttobeeligibleforthisprovision(thetextof

whichisintheprecedingsection),youmustgetdocumentation(1)thathisorherparentsrefusetocompletetheFAFSA

and(2)thattheydonotandwillnotprovideanyfinancialsupporttohimorher(includethedatesupportended).Ifthe

parentsrefusetosignanddateastatementtothiseffect,youmustgetdocumentationfromathirdparty(thestudentis

notsufficient),suchasateacher,counselor,cleric,orcourt.

Asnotedinthenextsection,thissituationdoesnotjustifyadependencyoverride.Butaswithoverrides,resolvingthe

situationisatyourdiscretion.Ifyoudecidethatastudentfallsintothiscategory,youmustdocumentyourdecisionand

UnderGEN-21-02,theDepartmentremindedfinancialaidadministratorsoftheirabilitytoexercisedocumented

professionaljudgmentwhendeterminingeligibilityofstudentsforfederalstudentaidandencouragedaid

administratorstoconsiderthespecialcircumstancesthatmayariseforstudentsandfamiliesduringtheongoing

COVID-19pandemic,especiallyastheyrelatetounemploymentorreductioninwork.

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ensurethatthestudentsubmitsaFAFSAformandpassesalltheeligibilitymatches.Theresultwillbearejected

applicationwithnoEFC.YoucanthenawardthestudentunsubsidizedDirectLoansuptothemaximumthestudentwould

normallybeeligiblefordependingonhisorhergradelevel(butnottheamountastudentcangetwhenhisorherparent

isunabletogetaPLUSloan).SeeDCLGEN-08-12formoreinformation.

Refusingorreducingaloan

RememberthatthediscretionofFAAsextendstorefusingorreducingDirectLoanfundsaslongasthereasonis

documentedandretainedinthestudent’sfile,thedeterminationisdoneonacase-by-casebasis,giveninwritingtothe

student,andnotduetodiscriminationagainsthimorheronthebasisofrace,nationalorigin,religion,sex,income,age,

ordisability.

DependencyOverrides

AnFAAmayconductdependencyoverridesonacase-by-casebasisforstudentswithunusualcircumstances.IftheFAA

determinesthatanoverrideisappropriate,heorshemustmaintainthedeterminationwithanysupporting

documentation.However,noneoftheconditionslistedbelow,singlyorincombination,qualifyasunusual

circumstancesmeritingadependencyoverride:

1. Parentsrefusetocontributetothestudent’seducation.

2. ParentswillnotprovideinformationfortheFAFSAorverification.

3. Parentsdonotclaimthestudentasadependentforincometaxpurposes.

4. Studentdemonstratestotalself-sufficiency.

Unusualcircumstancesdoinclude(andmaycauseanyoftheaforementionedconditions)parentabandonment,an

abusivefamilyenvironmentthatthreatensthestudent’shealthorsafety,orthestudentbeingunabletolocatehis

parents.Insuchcasesanoverridemightbewarranted.

Theseconditionswouldalsonotdisqualifyastudentfrombeingahomelessunaccompaniedyouthorself-supportingand

atriskofhomelessness.

Anaidadministratormayoverrideonlyfromdependenttoindependent(thoughassuggestedearlier,ifanindependent

studentreceivessubstantialsupportfromothers,aschoolmayusePJtoadjusttheCOAorFAFSAdataitemssuchas

untaxedincome).

Documentationiscritical—itmustsupport,andincludethereasonfor,thedecisionandshouldinalmostallcases

originatefromathirdpartywithknowledgeoftheunusualcircumstancesofthestudent.

AnFAAmay,withoutgatheringdocumentation,useanoverridethatanotherschoolgrantedinthesameawardyear.

Refusingorreducingaloan

34CFR685.301(a)(8)

Dependencyoverrides

HEASec.480(d)(1)(I)and(d)(2).AlsoseeDearColleagueLettersGEN-03-07andGEN-11-15.

https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2008-12-31/gen-08-12-subject-higher-education-opportunity-act
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However,overridesdonotcarryoverfromoneyeartothenext;theFAAmustreaffirmeachyearthattheunusual

circumstancespersistandanoverrideisstilljustified.

Athirdpartythatknowsthestudent’ssituation—e.g.,ateacher,counselor,medicalauthority,memberoftheclergy,

prisonadministrator,governmentagency,orcourt—shouldestablishtheunusualcircumstances.Evidencecanbea

signedletteroranofficialdocument,suchasacourtorder.Ifthirdpartydocumentationisnotavailable,theschoolmay

(itisnotrequiredto)acceptasignedanddatedstatementfromthestudentorafamilymemberdetailingtheunusual

circumstances.Suchastatementshouldbealastresort.

Tooverridethestudent’sdependentstatusonaninitialapplicationthroughFAAAccesstoCPSOnline,theFAAshoulduse

theDependencyOverridecodeof“1”(seetheEDETechnicalReferenceformoreinformation).

ToauthorizeadependencyoverrideonapaperFAFSAform,theFAAmarksthebubbleforanoverride,labeled“D/O,”in

the“CollegeUseOnly”area,fillsintheschool’sfederalcode,andsigns.Aseparateletterattachedtotheapplicationin

lieuofmakingtheoverrideisnotacceptable.

Ifthestudenthasalreadyapplied,youcanuseFAAAccesstoauthorizeorcancelanoverride;overridescannotbedone

ontheSAR.Ifheorshehadanoverridedoneatanotherschoolinthecurrentyear,thatwillbenotedwiththeschool’s

federalcodeonFAAAccess.Onlytheschoolperformingtheoverridewillreceivethattransaction.Ifthestudentaddsyour

schooltothetransactionorifheorshegivesyouhisorherdatareleasenumber(DRN),youcanaccesstherecord.

Overrideexample:SaidisarefugeefromSyriawhoqualifiesforfederalstudentaidasaneligiblenoncitizen.Buthis

FAFSAformwasrejectedbecauseheisadependentstudentanddidnotprovidedataforhisparents.Whentheaid

administratoraskshimforhisparents’information,hesaystheyareinSyriaandhavebeendisplacedduetothe

upheavalthere,andhedoesn’tknowhowtocontactthem.TheFAAaskshimfordocumentationofthis,andSaidsays

thathehasanunclelivingintheU.S.whocanattesttohissituation.TheFAAasksforSaid’suncletoeitherappearin

personandsignastatementconfirmingSaid’saccountortosendtheaidofficeanotarizedstatement.Said’suncle,who

worksnotfarfromtheschool,comestotheaidoffice,signsthestatement,andtheFAAgrantsSaidadependency

override.

Unabletoprovideparentdata

StudentscanindicateintheonlineFAFSAthattheybelievetheyhavespecialcircumstancesthatpreventthemfrom

providingparentaldata.Thosewhoindicatethisarethoroughlyinformedaboutwhatwarrantsadependencyoverrideand

whattheresultswillbefortheirapplication.Iftheypersistthroughthosescreensanddonotincludeparentaldata,they

willgetarejectedISIRwiththespecialcircumstancesflagset.Youwillhavetoreviewsuchastudent’ssituationand

determineifheorshe:(1)isunaccompaniedandhomeless,(2)meritsadependencyoverride,(3)mustinsteadprovide

parentaldata,or(4)shouldbepermittedtoborrowonlyunsubsidizedloansbecauseheorshecandocumentthathisor

herparentshaverefusedtosupporthimorherandtoprovidetheirinformationonhisorherFAFSA.

Overridesandprofessionaljudgment

Thephrase“professionaljudgment”islooselyusedforthediscretionFAAsapplytodependencyoverridesandtodata

adjustmentsintheapplication.TheprovisionsforthesetwotypesofchangesareinseparateplacesintheHEA.The

citationfordependencyoverridesisSec.480(d)(1)(I);andiscopiedintotoearlierinthischapterunderthesection

entitled“EntiretextoftheHEAsectiononPJ.

Page 67: Application and Verification Guide

ConflictingInformation

InadditiontoreviewingapplicationanddatamatchinformationfromtheCPS,aschoolmusthaveanadequateinternal

systemtoidentifyconflictinginformation—regardlessofthesourceandregardlessofwhetherthestudentisselectedfor

verification—thatwouldaffectastudent’seligibility,suchasinformationfromtheadmissionsofficeastowhetherthe

studenthasahighschooldiplomaorinformationfromotherofficesregardingacademicprogressandenrollmentstatus.

Theschoolmustresolveallsuchconflictinginformation,exceptwhenthestudentdiesduringtheawardyearorwhenhe

orsheisnolongerenrolledandwillnotre-enroll;ifthestudentlaterenrolls,youareagainobligatedtoresolvethe

conflictinginformation.

Ifyourschoolhasconflictinginformationconcerningastudent’seligibilityoryouhaveanyreasontobelievehisorher

applicationinformationisincorrect,youmustresolvethediscrepanciesbeforedisbursingFSAfundsand,aswith

verification,beforemakinganyPJadjustment.IfyoudiscoverdiscrepanciesafterdisbursingFSAfunds,youmuststill

reconciletheconflictinginformationandtakeappropriateactionunderthespecificprogramrequirements(dependingon

theoutcome,fundsmayhavetobereturned).

SubsequentISIRs

Youaregenerallyrequiredtoreviewallsubsequenttransactionsforastudentfortheentireprocessingyearevenifyou

verifiedanearliertransaction.Anexceptiontothisrequirementisifalatertransactioncomesinafterthestudentisno

longerenrolledatyourinstitution.FirstdetermineiftheEFCortheCflaghaschangedoriftherearenewcommentsor

NSLDSinformationthatimpactseligibilityforaid.Also,checkanyupdatesorcorrectionsorwhethertheverification

trackinggrouphaschanged.IftheEFChasnotchangedandtherearenochangesintheCflag,trackinggroup,orNSLDS

information,noactionisgenerallyrequired.IftheEFCdoeschangebutiteitherdoesn’taffecttheamountandtypeofaid

receivedorthedataelementsthatchangedwerealreadyverified,noactionisrequired.ButiftheEFCchangesandthe

pertinentdataelementswerenotverified,thenyoumustinvestigate.Ofcourse,anytimetheCflagchangesorNSLDS

datahavebeenmodified,youmustresolveanyconflicts.

Discrepanttaxdata

Financialaidadministratorsdonotneedtobetaxexperts,yettherearesomeissuesthatevenalaypersonwithbasictax

lawinformationcanevaluate.Becauseconflictingdataofteninvolvesuchinformation,FAAsmusthaveafundamental

understandingofrelevanttaxissuesthatcanconsiderablyaffecttheneedanalysis.Youareobligatedtoknow(1)

whetherapersonwasrequiredtofileataxreturnand(2)whatthecorrectfilingstatusforapersonshouldbe.TheIRS’s

onlineInteractiveTaxAssistantisausefultoolthatcanhelpwiththeseandotherissuesbywalkingtheuserthrougha

seriesofquestions.

Publication17oftheIRS,YourFederalIncomeTax(2020),isausefulresource.Itaddressespertinenttaxissues:thefiling

Requirementtoidentifyandresolvediscrepantinformation

34CFR668.16(f)

Requirementtoverifyquestionabledata

34CFR668.54(a)(2)“Ifaninstitutionhasreasontobelievethatanapplicant’sFAFSAinformationisinaccurate,it

mustverifytheaccuracyofthatinformation.”

https://www.irs.gov/help/ita
https://www.irs.gov/pub/irs-pdf/p17.pdf
Page 68: Application and Verification Guide

requirements—i.e.,whoisrequiredtofileareturn—areonpages5–9ofthePDFversionandthefilingstatusrequirements

areonpages20–25.

Forexample,anFAAwhonoticesthatadependentstudent’sparents,whoaremarriedandlivetogether,haveeachfiled

asheadofhousehold(whichoffersagreatertaxdeductionthanfilingassingleormarried)mustaskifthatistheright

status.Publication17explainsonpages23–25thecriteriaapersonmustmeettofileasheadofhousehold.Resolutionof

theconflictcouldbetheparentsrefilingandsubmittingacopyoftheamendedreturnorareasonableexplanationofwhy

therereallyisnoconflictunderIRSrules.

Maritalandtaxfil ingstatus

TheISIR/SARcommentcodes361–368indicateapossibleerrorwhenthefilingstatusandmaritalstatusdonotmatch.

Thisisnotconsideredtobeconflictinginformationsubjecttotheresolutionrequirementsof34CFR668.16(f),butwedo

encourageschoolstoreviewtheapplicationformistakeswhenthesecommentsappear.NotethattheFAFSA’suseof

priorprioryeartaxdatacanincreasethenumberofthesecommentcodes.Seethe2022-2023SARCommentCodesand

TextGuideformoreinformation.

Resolutionofconflictinginformation

Youmaynotdisburseaiduntilyouhaveresolvedconflictinginformation,whichyoumustdoforanystudentaslongashe

orsheisatyourschool.Eveniftheconflictconcernsapreviousawardyear,youmuststillinvestigateit.Youhave

resolvedthematterwhenyouhavedeterminedwhichdataarecorrect;thismightsimplybeconfirmingthatanearlier

determinationwastherightone.Ofcourse,youmustdocumentyourfindingsandincludeanexplanationthatjustifies

yourdecision.

TheverificationpageontheFSAAssessmentssitehasguidancetohelpyoureviewyourconflictinginformation

procedures;seeActivity1.

ReferralofFraudCases

Ifyoususpectthatastudent,employee,orotherindividualhasmisreportedinformationoraltereddocumentationto

fraudulentlyobtainfederalfunds,youmustreportyoursuspicionsandprovideanyevidencetotheOfficeofInspector

General(OIG).SeealsoVolume2.

OIGAddressandPhoneNumbers

NationalHotline

InspectorGeneral’sHotlineOfficeofInspectorGeneralU.S.DepartmentofEducation400MarylandAvenue,SW

Washington,DC20202-1500

Fax:(202)245-7047

1-800-MIS-USED(1-800-647-8733)Hours:M,W9–11a.m.T,Th1–3p.m.

Tosubmitacomplaintonlineatanytime,gotohttps://www2.ed.gov/about/offices/list/oig/hotline.htmlandclickonthe

appropriatelink.

RegionalOffices TelephoneNo.

Boston,MA 617-289-0174

NewYork,NY 646-428-3861

Philadelphia,PA 215-656-6900

https://fsapartners.ed.gov/knowledge-center/library/handbooks-manuals-or-guides/2021-08-03/2022-2023-sar-comment-codes-and-text-guide-updated-sept-9-2021
https://fsapartners.ed.gov/knowledge-center/library/fsa-assessments/2019-03-05/verification
https://www2.ed.gov/about/offices/list/oig/hotline.html
Page 69: Application and Verification Guide

Pittsburgh,PA 412-395-4528

Atlanta,GA 404-974-9430

PembrokePines,FL 954-450-7346

Chicago,IL 312-730-1630

Dallas,TX 214-661-9530

AnnArbor,MI 734-330-2059

Denver,CO 303-844-0058

Nashville,TN 615-736-2205

KansasCity,MO 816-268-0500

LongBeach,CA 562-980-4141

Phoenix,AZ 602-507-6180

SanJuan,PR 787-773-2746

Washington,DC 202-245-8467

ReportingFraudRings(DistanceEducation)

TheOIGfraudringemailaddresshasbeendisabledandisnolongerinuse.Institutionsnowsubmitfraudringcomplaints

throughtheDepartment’sOIGencryptedcomplaintwebportalattheURLaddresshttps://oighotlineportal.ed.gov.

Becausetheportalisencrypted,institutionsnolongerneedtoencryptsubmitteddocuments.

Inaddition,institutionswillsubmitaFraudRingReportingSpreadsheetthroughtheIG’scompliantprocess.Formore

informationonhowtoreportfraudringsorforacopyoftheFraudRingReportingSpreadsheet,pleasereviewtheAugust

21,2020electronicannouncement.

FSAFeedbackCenter

OIGreferrals

34CFR668.16(g)

https://oighotlineportal.ed.gov/
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-08-21/fraud-postsecondary-distance-education-programs-fraud-rings-reporting-change
Page 70: Application and Verification Guide

ThroughtheFSAFeedbackCenter,students,parents,andotherscansubmittotheDepartmentthefollowingfeedback:

complimentsaboutapositiveexperiencetheyhavehadwiththeDepartment,aschool,orafederalloanservicer;

allegationsofsuspiciousactivitybyaschoolorpersonthatmighthaveviolatedfederallawsregardingfederal

studentaid;or

complaintsabout

applyingforandreceivingfederalloans,grants,andworkstudy;

experienceswithfederalloanservicers,collectionagencies,ortheDepartment;and

schools—theiradministrationoftheFSAprograms,marketingandrecruitmentpractices,ormisrepresentations

offacts.

UnaccompaniedHomelessYouth

Ifastudentdoesnothaveandcannotgetdocumentationfromanyoftheauthoritieslistedunderthe“Unaccompanied

homelessyouth”sectioninChapter2,you(theFAA)mustdetermineifheorsheisanunaccompaniedyouthwhois

homelessorisself-supportingandatriskofbeinghomeless.Anystudentwhoisnotyet24mayqualifyforahomeless

youthdetermination.Itisimportanttomakehomelessyouthdeterminationsonacase-by-casebasis.

Asdefinedlater,astudentisconsideredhomelessifheorshelacksfixed,regular,andadequatehousing.Thisisbroader

thanjustliving“onthestreet.”Itincludesliving

withotherpeopletemporarilybecauseheorshehadnowhereelsetogo;

insubstandardhousing(ifitdoesn’tmeetlocalbuildingcodesortheutilitiesareturnedoff,itisgenerallynot

adequate);

inemergencyortransitionalshelters,forexample,trailersprovidedbytheFederalEmergencyManagementAgency

afterdisasters;

inmotels,campgrounds,cars,parks,abandonedbuildings,busortrainstations,oranypublicorprivateplacenot

designedforhumanstolivein;and

intheschooldormitoryifthestudentwouldotherwisebehomeless.

Astudentlivinginanyofthesesituationsandfleeinganabusiveparentmaybeconsideredhomelesseveniftheparent

wouldprovidesupportandaplacetolive.

ThedocumentationforanFAA’sevaluationofthelivingarrangementsofastudentmustdemonstratethatheorshe

meetsthedefinitionofthiscategoryofindependentstudent.Thedeterminationmaybebasedonadocumentedinterview

withthestudentifthereisnowrittendocumentationavailable.

Whenyouaremakingadeterminationofhomelessness:

Askforhelpfromlocalschooldistricthomelessliaisons,statehomelesseducationcoordinators,theNationalCenter

forHomelessEducationhttps://nche.ed.gov/,ortheNationalAssociationfortheEducationofHomelessChildrenand

Youthwww.naehcy.org.

Useschooldistricthomelessliaisonsandshelterproviderstohelpdevelopandimplementproceduresforverification.

Rememberthatrelevantinformationcancomefromrecognizedthird-partiessuchasprivateorpubliclyfunded

homelesssheltersandserviceproviders,financialaidadministratorsfromanothercollege,collegeaccessprograms

suchasTRIOandGEARUP,collegeorhighschoolcounselors,othermentalhealthprofessionals,socialworkers,

mentors,doctors,andclergy.

Usediscretionwhengatheringinformation,andrespectthestudent’sprivacy.Someinformation,suchasthat

Homelessyouthdeterminations

DCLGEN-15-16

https://studentaid.gov/feedback-center/
https://nche.ed.gov/
http://www.naehcy.org/
Page 71: Application and Verification Guide

protectedbydoctor-patientprivilege,isconfidential.Also,documentssuchaspoliceorChildProtectiveServices

reportsarenotnecessary.Don’tfocusonwhythestudentishomelessorunaccompaniedbutonwhetherthe

evidenceshowsheorsheisanunaccompaniedhomelessyouthasdefinedinsection725oftheMcKinney-Vento

HomelessAssistanceAct.

Determineeligibilitybasedonthelegaldefinitionsprovided.

RecallthatunaccompaniedhomelessyouthmayusetheaddressofyourschoolastheirownontheFAFSAform.

Forstudentsyoudeterminetobeunaccompaniedhomelessyouthsorunaccompanied,self-supportingyouthsatriskof

beinghomeless,selectthehomelessyouthdeterminationoption(#4)inthedependencyoverridefieldinFAAAccessto

CPSOnlineorEDE.OnthepaperFAFSA,fillintherelevantbubbleinthe“CollegeUseOnly”box(seethegraphicunder

the“DependencyOverrides”sectionearlierinthischapter),includeyourschoolcode,andsign.Forstudentswhohave

alreadyfiledtheirFAFSAformsubmitaFAFSAcorrectionusingtheHomelessYouthDeterminationflagonthe

“dependencydetermination”page(SpecialCircumstancesflagontheISIR).Tocancelahomelessyouthdetermination,

youusethesamemethodaswhencancelingadependencyoverride:changethedependencyoverridevalueto“2—FAA

overridecanceled”inFAAAccessorEDE.

YoumayrelyonadeterminationbyanotherschoolthatastudentwasinthiscategoryonorafterJuly1,2021.Also,a

newdeterminationmustbemadeeachyearforanapplicantwhoishomelessoratriskofbeinghomeless.

Confirmationnotrequired

Youarenotrequiredtoconfirmtheanswerstothehomelessyouthquestionsunlessyouhaveconflictinginformation.A

documentedphonecallwith,orawrittenstatementfrom,oneoftherelevantauthoritiesissufficientverificationwhen

needed.

Inmostcasestheofficialsauthorizedtomakeanunaccompaniedhomelessyouthdetermination(thoselistedunderthe

“Unaccompaniedhomelessyouth”sectioninChapter2)willonlyprovidedocumentationofthatstatusforpersonsthey

aredirectlyprovidingservicesto.However,theremaybeafewcase-by-caseinstanceswheresuchanofficialwillprovide

documentationforapersonwhoisnolongerofficiallyreceivingservices.Also,localliaisonsmaywritesubsequent-year

lettersofverificationforunaccompaniedhomelessyouththroughage23forwhomtheyhavethenecessaryinformation

towritesuchletters.Thisdocumentationisacceptableforverifyingunaccompaniedhomelessness.

Itisnotconflictinginformationifyoudisagreewithanauthority’sdeterminationthatastudentishomeless.Ifyoubelieve

theauthorityisincorrectorabusingtheprocess,accepthisorherdeterminationbutcontactthefollowingoversightparty,

asrelevant,toevaluatetheauthority’sdeterminations:

Schooldistricthomelessliaison:contactthecoordinatorofeducationforhomelesschildrenandyouthprogramsof

thestate’seducationalagency.Youcanfindstatecoordinatorcontactinformationathttps://nche.ed.gov/data/.

Directorofanemergencyshelterortransitionalhousingprogram:youshouldcontactthelocalContinuumofCare

(CoC)administeringtheHUDhomelessassistanceprogram.Gotohttps://www.hudexchange.info/programs/coc/and

clickon“ContactaCoC”ontherightsideofthepage.

Directorofarunawayorhomelessyouthbasiccenterortransitionallivingprogram:contacttheNational

ClearinghouseonFamiliesandYouthbyphoneat301-608-8098orbyemailatncfy@acf.hhs.gov.

McKinney-VentoAct

42U.S.C.11434a

Homelessyouthdefinitions

https://nche.ed.gov/data/
https://www.hudexchange.info/programs/coc/
mailto:[email protected]
Page 72: Application and Verification Guide

Atriskofbeinghomeless—whenastudent’shousingmayceasetobefixed,regular,andadequate,for

example,astudentwhoisbeingevictedandhasbeenunabletofindfixed,regular,andadequatehousing

Homeless—lackingfixed,regular,andadequatehousing

Self-supporting—whenastudentpaysforhisorherownlivingexpenses,includingfixed,regular,andadequate

housing

Unaccompanied—whenastudentisnotlivinginthephysicalcustodyofaparentorguardian

Housing

Fixed—stationary,permanent,andnotsubjecttochange

Regular—usedonapredictable,routine,orconsistentbasis

Adequate—sufficientformeetingboththephysicalandpsychologicalneedstypicallymetinthehome


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