1
FAFSA on the Web Changes and IRS DRT
ISIR and EFC Formula Changes
Marital Status
Parent Definition
Independent Student Status
Customized/Targeted Verification
2
Start a New FAFSA


fafsa.ed.gov
Demographic Information
◦ Social Security Card
◦ Permanent Resident Receipt
Card (if applicable)
◦ Address, phone, Email

Federal Student Aid ID
◦ Student
◦ Parent
◦ https://studentaid.ed.gov/sa/faf
sa/filling-out/fsaid
◦ Create a New FSA ID
3
Online Navigation

Create a Password
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Password must be between 4
and 8 characters (any)
Help and Hints
Internet Back Arrow
Auto Save
Saved Applications – Deleted
after 45 Days
Live Chat Session
System Security
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3 Levels of Encryption
Close/Clear Browser
4
Student Eligibility

Citizenship
◦ Alien Registration Number
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High School Completion or
GED
Grade Level
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Received Financial Aid
Highest School – Father
and Mother
First Bachelor’s Degree
Work-Study Interest
5
Drug Conviction
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Sale or Possession
Grade level other than
first year, never attended
Prior aid received
Conviction while receiving
federal aid
Conviction on Record
Rehabilitation Program
6
High School Graduate

High School Information
◦ Required for 2017-2018
◦ Regardless of grade level
◦ Name and Location
◦ Encouraged to Confirm but not
required to proceed with
application

No C-Code for High School
Confirmation Process
7
Dependency
Determination
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Prefilled from student
demographic questions
Skip Logic through 8 Questions
 Support Children
 Active Duty
 Ward of Court/Foster
 Emancipated Minor
 Legal Guardianship
 Homelessness
Dependent – Option to Provide
Parental Info.
Special Circumstances
8
IRS Data Retrieval Tool
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Marital Status
Unable to Retrieve
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Married Filing Separately
Married and either filed Head of
Household
Amended Return
Puerto Rican or Foreign Return
Filed Recently – 3 or 8 Weeks
Message – Leaving FAFSA on
the Web
9
Skip Logic
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Citizenship
High School Diploma
Grade Level
Dependency
Parent Information
IRS Data Retrieval Tool
Financial Data
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Tax Return Filed
Untaxed Sources
Dislocated Worker
Receipt of Federal Benefits
Income Exclusions
Assets
10
Assets

Simplified Needs Analysis
Asset Protection Allowance
Reporting Assets
Assets Not Included
Skip Logic

Type of Tax Return
 Eligible to File 1040A/EZ
 Total Assets as of FAFSA Filing
Date
 Dislocated Worker
 Receipt of Federal Benefits
Help Topics – Need Help?
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11
Confirmation Results
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Instructions
Hyperlinks
Confirmation Number
Data Release Number
Estimated EFC
Estimated Pell and Loans
College Rates
Federal Student Aid Center
Contact Information
12
Institutional Student
Information Record (ISIR)
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Institutional Result of FAFSA
Filing
Sent to Listed Schools
Electronically
Cover Letter – Comment Codes
Reported Data
Calculation Results
Verification Status
Database Match Flags
NSLDS Data
13
Verification
Information
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CPS Selection
EFC – Asterisk
Verification Flag
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Y = Selected for verification
N = No selected
* = Selected on a subsequent transaction
Verification Tracking Flag
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V1 = Standard Verification
V4 = Custom Verification
V5 = Aggregate Verification
Blank = Not selected for verification
14
Transaction & Processing
Codes
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EFC Type
Source of Correction
Reprocessing Code
Processed Record Type
CPS Pushed ISIR
Dependency Override
Electronic Transaction
Indicator (ETI)
Correction # Applied To
Intermediate Values
Signature Reject EFC
15
Rejects and
Assumptions
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Reject Codes
Reject Reasons
Rejects Met
Assumption Codes
Signature Rejects
16
NSLDS Pell History
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Postscreening Reason Codes
Overpayment Flag
Pell Lifetime Eligibility Used
Pell Lifetime Limit Flag
Pell Payment Data
NSLDS Professional Access
Web site – nsldsfap.ed.gov
17
NSLDS Loan
History
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Default, Discharge,
Fraud, and Active
Bankruptcy Flags
Loan Satisfactory
Payment
Arrangement Flag
Loan Details
Annual and Aggregate Loan
Limits
Master Promissory Note
Lender, Servicer, and Guaranty
Agency Contact Codes
18
NSLDS Unusual
Enrollment Flag
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NSLDS Financial Aid History
Section
Unusual Enrollment Flag
Resolution Required
 Codes 2 and 3
19
What is the EFC?
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Federal Methodology
Cost of Attendance
Expected Family Contribution
FAFSA Data
Federal Eligibility
 Pell Grant
 Direct Loans
 Campus-Based Programs
State Grant Programs
Institutional Aid Programs
Title IV of HEA – Part F
Federal Register/Volume 81, No. 152,
08/08/2016
20
EFC Worksheets

Formula A, B, C – Regular and Simplified
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Dependent
Independent without dependents
Independent with dependents
Total Taxed and Untaxed Income
Income Exclusions
Allowances Against Income
Contribution from Assets
Calculations Carried Three decimal
places –

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Rounded up for .500 - .999
Rounded down for .001 - .499
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22
FAFSA Definitions
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Status as of Date Signed
Current Status – Divorced
then Remarried
Separation
Reporting Student Status
Data Reported
23
IRS Marital/Filing Status
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Single
Unmarried
Divorced
Widow(er)
Head of Household
Considered Married – Last
Day of Tax Year
Married Living Apart
Divorce and Remarriage
Annulled Marriage
IRS Publication 17
24
Head of Household (HOH)
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Considered Unmarried
File a Separate Return
Pay more than 50% of
Costs to Keep up Home
Support Test
Qualifying Person
Exemption Claimed
Temporary Absences
Nonresident Alien
Married to US Citizen
Benefits of Filing HOH:
 Higher Standard
Deduction –


Lower Tax Rate


$6300 for Single and $9250
for HOH
Wider Income brackets
Refundable Earned
Income Credit
Nonresident Alien – Chapter 1, Publication 519
25
Divorced or Separated
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Divorce
Separation
Documenting Divorce or
Separation
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Proof of Separate Addresses
Divorce Decree
Legal Separation Court Document
States Recognizing Legal
Separation
Separation - Cannot File Taxes as
Single
LEGAL SEPARATION NOT
RECOGNIZED:
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Delaware
Florida
Georgia
Maryland
Mississippi
New Jersey
Pennsylvania
Texas
26
Common Law Marriage
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Definition
Married Couple – All
Rights
FAFSA and IRS
State Conditions
US Marriage Laws
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www.usmarriagelaws.com
Divorce
Documenting Common
Law Marriage
STATES THAT RECOGNIZE
COMMON LAW
MARRIAGE:
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Alabama
Colorado
Iowa
Kansas
Montana
Rhode Island
South Carolina
Texas
Utah
Washington D.C.
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Resolving Marital Status Conflicting Information
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Tax Expert
FAFSA
Tax Return
Correct Filing Status
Documentation
Correcting FAFSA
Amending Taxes
Conflicting Situations
CONFLICING INFORMATION:
34 CFR 668.16(f).
34 CFR 668.54(a)(3).
34 CFR 668.61.
2012-2013 Federal Student Aid Handbook, p. AVG-80.
28
Publication 17
www.irs.edu
Introduction and What’s New
Part 1 – Income Tax Return
Part 2 – Income
Part 3 – Gains and Losses
Part 4 – Adjustments to Income
Part 5 – Standard and Itemized Deductions
Part 6 – Figuring Your Taxes and Credits
Tax Tables and Additional Material
1-800-829-3676
29
What is a Parent?
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Dependency
Status
Parents
Biological
Adoption
Stepparent
FAFSA Data
30
Foster Parent or Legal Guardian
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Foster Parents
Legal Guardianship
Legal Custody
Court Appointed
Temporary
Orphan, foster child, or ward of the court (53). A student
who was an orphan—both her parents were dead—when
13 or older is independent even if she was subsequently
adopted. Likewise, a student who was at any time since the
age of 13 a foster child or a ward of the court is
independent even if her status changed later.
31
Divorced or Separated Parent
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Divorced
Legal or Informal
Separation
Separate Addresses
Residency
Financial Support
Tax Exemption
Death of a Parent
Priority Order for Divorced or
Separated Parents:
1. Which parent did student
live with more during the
12 months preceding
FAFSA completion date?
2. If live(d) with neither or
both equally, which parent
provided more financial
support during the 12
months preceding FAFSA
completion date?
3. If financial support is
exactly 50/50, which
parent has the greater
income and benefits.
32
Dependency Override
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Independence Criteria
Unusual Circumstances
Special Cases
Not Eligible
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Parents Refuse Support or Unwilling
to Provide Information
Student Demonstrates Self-Sufficiency
Not Claimed on parent Taxes
Can Include
 Abandonment
 Abusive Environment
 Unable to Locate
Case-by-case
Dependency Override Form
33
Independent - Automatic Criteria

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
Age –
Born before
January 1, 1994
Master’s or Doctorate
Programs
Married prior to Filing
FAFSA
 Engaged
 Divorce
34
Independent - Other Criteria
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Veteran of US Armed Forces
or Active Duty
Support Children or
Dependents (>50%)
Foster Care or Ward of the
Court
Parents Deceased
Emancipated Minor
Legal Guardianship
Homelessness
35
Independency
Documentation
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Not a Verification Requirement
Resolve Conflicting
Information
C-Code Resolution
Documentation
Financial Aid Administrators
Discretion
Professional Judgment
36
37
Tracking Groups
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V1- Standard
V4 – Custom
V5 – Aggregate
GEN-16-07
(4/5/2016)
 Appendix A
 Appendix B
 Appendix C
38
Changes for 2017-2018
DCL ID: GEN-16-07
April 5, 2016
39
Documentation 2016-2017
40
V1 – Standard Group

Tax Filers
o
o
o
o
o
o
o
o
o
Adjusted Gross Income
U.S. Income Tax Paid
Untaxed Portions of IRA
Distributions
Untaxed Portions of Pensions
IRA Deductions and Payments
Tax Exempt Interest Income
Education Credits
Number of Household Members
Number in College

Non-Tax Filers
o
o
o
Income Earned from Work
Number of Household Members
Number in College
41
V4 - Custom Group
42
V5 Aggregate Group
43
Non-Tax Filers


GEN-16-07
Federal Register – Vol 81, No. 63 – April 1, 2016
o
o
o
Signed Statement AND
W2 Forms AND
Confirmation of non-filing from the IRS
44
Conflict Resolution - 399

GEN-16-14 – 399 Conflict Code
o
o
o
o
o
o
o
Edit will pop up to FAFSA filer - Warning
Encourage use of DRT
Pell Eligible – Significant Change in EFC
Resolve Conflict for both years
Not Flagged:
o Not Pell for 17-18
o Change in Dependency Status
o Change in Marital Status
Professional Judgment Flagged ISIRs
10/17/16 – Reprocessed a number of ISIRs with
incorrect 399s
45
Considerations and Clarification

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Verification Deadlines
Professional Judgment
Interim Disbursements
IRS Extension
Tax Return Preparer
IRS/Pension Distributions
(Rollovers)
Student Communications
Conflicting Information
Electronic Signatures
IRS or Pension Rollovers:
• Excluded from EFC Calculation
• FAFSA Instructions –
Untaxed except rollovers
• DRT – Rollover unknown
Assumes untaxed
Solution (DOE Guidance):
• Applicant or FAA may modify
• Maintain documentation
• Written and signed statement
• 02 may update to 04
OK to waive Tax transcript if
only change is rollover amount
46
Thank you – Any Questions?
47