ED Reminds Schools of Acceptable Verification Documentation, Addresses Anticipated High PJ Volume

By Karen McCarthy, NASFAA Policy and Federal Relations Staff

In response to challenges applicants are facing in obtaining verification documentation, the Department of Education (ED) issued an Electronic Announcement (EA) on Thursday that reminds institutions of acceptable uses of signed statements as verification documentation and provides reassurance that an institution’s policy to accept signed statements where allowed will not, alone, be criteria used to select an institution for a program compliance review. 

In anticipation of a higher volume of professional judgment (PJ) requests, ED will also make appropriate adjustments to its risk-based model for the 2019-20 and 2020-21 award years to eliminate increased use of PJ as a selection criterion for a program compliance review.

The EA largely restates guidance provided in the Jan. 9, 2019 EA regarding alternative documentation for tax transcripts and verification of non-filing forms. For tax non-filers, ED is also allowing institutions, during this period of national emergency, to accept a copy of a paystub, an employment offer letter, evidence of direct deposit from an employer, or other similar information for verification purposes in place of a IRS Form W-2, or an equivalent document. In its May 24, 2019 Federal Register document, ED already allows applicants who are unable to obtain a W-2 to provide a signed statement that includes:

  • The amount of income earned from work;

  • The source of that income; and

  • The reason why the IRS Form W-2, or an equivalent document, is not available in a timely manner.

For non-filing foster care youth, ED will permit institutions to accept a signed statement from a foster care youth that he or she earned less than the amount that triggers the requirement for taxpayers to file tax returns.

The EA does not address verification flexibilities for tax filers who are unable to obtain either a tax transcript or a paper copy of their tax returns and cannot use the IRS Data Retrieval Tool. NASFAA will continue to raise this unresolved issue with ED staff.

Regarding PJ, ED takes one more step in encouraging institutions to exercise PJ where appropriate by eliminating PJ rates as a selection criterion in its risk-based model for program review selection for the 2019-20 and 2020-21 award years. In addition, ED will not negatively view increased use of professional judgment.

 

Publication Date: 7/10/2020


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