Pop Quiz – Must This Student File Even Though He is Not Selected for Verification?
Scenario:
A school has a dependent student who is not selected for verification. As a result of the parent's income, the student is only eligible for unsubsidized loans. On the FAFSA the student reported income earned from working which exceeds the tax filing threshold. Does the school still need to require the student to file taxes before processing aid?
Answer:
Yes. The student must file. This falls within the realm of conflicting information that must be resolved. Please see the following from page AVG-115 of the 2018-19 FSA Handbook:
"If your school has conflicting information concerning a student’s eligibility or you have any reason to believe his application information is incorrect, you must resolve the discrepancies before disbursing FSA funds and, as with verification, before making any PJ adjustment. If you discover discrepancies
after disbursing FSA funds, you must still reconcile the conflicting information and take appropriate action under the specific program requirements."
There is no exception for conflicting information.
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Publication Date: 6/21/2019
Garrett C | 6/28/2019 12:57:54 PM
We all know we need to resolve conflicting information. How the handbook was interpreted in relation to this scenario is a bit severe. The lack of clarity regarding how the situation arose is a problem. If the intent is to police every application, either select all applicants for verification, reject the ISIR or at least throw us a comment code.
Andy F | 6/28/2019 10:52:36 AM
I agree with Katie. We don't have enough information for most scenarios to consider it conflicting information. For folks with marital status changes, are we supposed to just guess what their tax filing requirement was? "financial aid administrators do not need to be tax experts" but are we supposed to be psychic?
Katie S | 6/28/2019 9:54:54 AM
The scenario as presented is too vague. Which tax filing threshold? if the student made $7500, it is above the threshold for a single person who CAN NOT claim their own exemption. Do we know with 100% certainty that his exemption was claimed by someone else? Even if the parents' exemptions claimed matches household size, that is still not conflicting, they could be claiming an exemption for a person NOT being counted in the household size. I would argue that NO CONFLICTING INFORMATION exists. It is POSSIBLE it is wrong, but it is also POSSIBLE that it is right. Nothing is inherently conflicting.
Bettie W | 6/28/2019 8:30:52 AM
So were are responsible for policing ALL ISIRS on behalf of the IRS? I am more concerned about why Ed doesn't automatically select these students/parents for verification. And even more concerned about students who report 0 income, 0 assets, no benefits and 8 people in the household. If the goal is to be better stewards of Federal tax dollars, this should be the first thing addressed. Not, the filing status of a student who is getting a non need based loan.
Rose H | 6/24/2019 3:4:35 PM
This is what our school does but this is a perfect example of something (IMO) that should be selected for verification from the start.
Laura H | 6/21/2019 4:46:58 PM
If the student isn't selected for verification and there are no SAR comments that need to be resolved, then it's the FAA's responsibility to require students to file. If the DOE is so concerned with these students, then have FAFSA reject their records or flag them for verification.
Jennifer S | 6/21/2019 11:16:46 AM
I beg to differ with this interpretation. If the DOE was that concerned about someone not filing, they would select them all for verification or introduce a new reject reason. I don't think they are that concerned, nor should they be.
Judith C | 6/21/2019 8:53:54 AM
Are we IRS enforcement now?
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