2021-2022 Application and Verification Guide

1 AVG-iApplication and Verification Guide2021 2022 Introduction ..1 CHANGES FOR 2021 2022 ..1 Chapter 1: The Application Process: FAFSA to ISIR ..3 TYPES OF online, myStudentAid mobile app, FAA Access to CPS Online,Paper (PDF) FAFSA forms, FAFSA on the phone, FSA ID, Renewal FAFSA, FAFSA filers under the age of 13 PROCESSING THE FAFSA FORM ..5 OUTPUT DOCUMENTS: THE SAR AND ISIR ..6 DEADLINES ..8 Websites for students, Resources for schoolsChapter 2: Filling Out the FAFSA ..11 STEP ONE: GENERAL STUDENT INFORMATION ..11 Questions 1 31, IRS Data Retrieval Tool, Definitions, No income reported on the FAFSA form,Married filing separately, EFA or not?STEPS TWO AND FOUR: INCOME AND ASSETS.

2 18 Questions 32 44 (and questions 79 92 for parents), Qualified education benefits, Reporting take-back mortgages, Reporting trust funds, Ownership of an assetSTEP THREE: DEPENDENCY STATUS ..30 Questions 45 57, Who does and does not count as a parent on the FAFSA?, Other sources of support for children and other household members, Veteran match, Documentation of foster youthSTEP FOUR: PARENTS INFORMATION (DEPENDENT STUDENTS ONLY) ..37 Questions 58 78, 83 (see Step Two for discussion of questions 79 82, 84 92); Reporting information in cases of death, separation, divorce, and remarriageSTEP FIVE: INDEPENDENT STUDENT DATA ..42 Questions 93 100 STEP SIX: SCHOOL INFORMATION.

3 43 Questions 101 STEP SEVEN: SIGNATURE(S) ..43 Questions 102 106, Signatures for electronic applications , Signature requirements chartAVG-iiChapter 3: Expected Family Contribution (EFC) ..47 GENERAL INFORMATION ..47 SIMPLIFIED FORMULA ..47 AUTOMATIC ZERO EFC ..48 DEPARTMENT OF DEFENSE MATCH AND IRAQ AND AFGHANISTAN SERVICE GRANT ..49 ALTERNATE EFCS ..49 THE EFC WORKSHEETS ..49 Negative AGI or zero?FORMULA A DEPENDENT STUDENTS ..50 Parents contribution, Student s contribution from income, Student s contribution from assets, Calculation of student s EFC , Alternate EFCs for other than nine-month enrollmentFORMULA B INDEPENDENT STUDENT WITHOUT DEPENDENTSOTHER THAN A SPOUSE.

4 54 Contribution from available income, Contribution from assets, Calculation of student s EFC , Alternate EFCs for other than nine-month enrollmentFORMULA C INDEPENDENT STUDENT WITH DEPENDENTSOTHER THAN A SPOUSE ..56 Available income, Contribution from assets, Calculation of student s EFC, Alternate EFCs for other than nine-month enrollmentChapter 4: Verification , Updates, and Corrections ..59 REQUIRED POLICIES AND PROCEDURES ..59 Verification selection and PJAPPLICATIONS AND INFORMATION TO BE VERIFIED ..60 School-selected Verification , Verification tracking groups, Changing tracking groups,Reporting results for groups V4 and V5, Verification exclusions, Verification following disasters,Higher Education Relief Opportunities for Students (HEROES) ActDOCUMENTATION.

5 65 Documenting AGI, taxes paid, and other tax data with the DRT; Using a joint return to figure individual AGI and taxes paid; Using the tax transcript; Rollovers and Verification ; Using the tax return; If a W-2 is not available; Immigrants and tax filing; Special situations; Household size; Number in college; High school completion; ATB alternatives for high school completion; Identity and statement of educational purposeINTERIM DISBURSEMENTS ..79 Overpayments from interim disbursements, Schools that can t make interim disbursementsUPDATING INFORMATION ..80 Parent remarriage after applyingAVG-iiiCORRECTING ERRORS ..81 CHANGES IN A SELECTED APPLICANT S FAFSA ..81 Campus-based and Direct Loan changes, Pell changes, Selection after disbursement,Disbursing unsubsidized aid, After documentation is completeHOW TO SUBMIT CORRECTIONS AND the online FAFSA, Submitting changes via FAA Access to CPS Online or EDE, Using the SAR to make corrections, Adding schools and changing a student s address, SignaturesDEADLINES AND FAILURE TO SUBMIT DOCUMENTATION.

6 84 Campus-Based and Direct Loan, Pell Grants, Other considerations, Late disbursements, Verification status codesSUGGESTED Verification TEXT ..86 Chapter 5: Special Cases ..87 PROFESSIONAL JUDGMENT ..87 Entire text of the HEA section on PJ, Dependent students without parent support,Refusing or reducing a loanDEPENDENCY OVERRIDES ..91 Unable to provide parent data, Overrides and professional judgmentCONFLICTING INFORMATION ..93 Subsequent ISIRs, Discrepant tax data, Marital and tax filing status,Resolution of conflicting informationREFERRAL OF FRAUD CASES ..95 OIG address and phone numbers, Reporting Fraud Rings (Distance Education), FSA Feedback CenterUNACCOMPANIED HOMELESS YOUTH.

7 96 Confirmation not required, Homeless youth definitionsAVG 1 FSA HB January 2021a 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 Department of Education (the Department, ED), and federal student aid and Title IV aid are synonymous terms for the financial aid offered by the appreciate any comments that you have on the Application and Verification Guide , as well as all the volumes of the FSA Handbook.

8 We revise the text based on questions and feedback from the financial aid com-munity, so please write us at about how to improve the Handbook so that it is always clear and on Active LinksAt the top of each page you will find links to the Handbook glossary and acronyms, the Code of Federal Regulations, and Dear Colleague for 2021-2022On the bottom of page 3 we provided additional information where stu-dents can obtain and download the myStudentAid added the definition of a valid ISIR or SAR on page chapter 2, all dates and pertinent tax return and schedule information have been updated to conform to the requirements associated with the 2021-2022 processing year and the 2019 base tax page 15 we provided new information pertaining to the DRT s ability to automatically answer the question about whether or not a tax filer filed a Schedule 1, including current 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 )

9 Form, verifying infor-mation, and making corrections and other changes to the informa-tion reported on the Glossary CFR DCLAVG 2 Application and Veri cation Guide 2021-2022 FSA HB January 2021On page 48 we increased the income threshold for the automatic zero EFC consideration to $27, chapter 3 we removed the EFC calculation worksheets and tables from the end of the chapter and instead refer individuals to the 2021-2022 EFC Formula added a sentence on page 63 reminding schools that when reporting corrections for V4 or V5 outcomes in FAA Access to CPS Online, the latest outcome results will supplant any previously reported outcome provided examples of acceptable signatures for paper and electronic tax returns on page page 74 we clarified that an IRS Request Flag value of 07 will be returned if the tax filer or the IRS amends a tax filer s page 78 we added a definition of a valid unexpired government-issued photo ID for identity proposes including the exclusion of military Chapter 4, we removed the section discussing paper FAFSA correc-tions by phone with the Federal Student Aid Information Center (FSAIC)

10 As that functionality was removed from FSAIC a couple of years removed the suggested text from the end of Chapter 4 and instead refer individuals to the appropriate electronic announcement to review the suggested text for the 2021-2022 processing chapter 5 we added clarifying guidance on page 89 indicating that a school cannot perform professional judgement for a student after that stu-dent ceases to be eligible, including when the student is no longer page 95 we added the new fraud ring reporting procedures schools need to follow when communicating with the Inspector General s 3 CHAPTER1aFSA HB January 2021 Glossary CFR DCLTo be considered for federal student aid, a student must complete a FAFSA form.