ISIR Verification changes for 2013-2014

Verification Tracking GroupsThe 2013-2014 Financial Aid Award Year is just around the corner. Just when you thought you were getting the hang of the rules for Verification in the 2012-2013 award year, the rules are changing again. Are you ready for what the U.S. Department of Education is heralding as “Customized Verification”?

Beginning with the 2013-2014 Institutional Student Information Report (ISIR), the Central Processing System (CPS) will select a student for verification based on the data reported they reported on the FAFSA, and assign that ISIR to a “Verification Tracking Group.” The Financial Aid office will have to verify specific data on the ISIR based on the Verification Tracking Group the applicant’s ISIR has been assigned to.

As the chart (above, right) indicates, there are five Verification Tracking Groups, each with their own “Verification Tracking Flag,” indicating they type of Verification required.


While the official word out of Washington is that ED won’t be providing Sample or Model Verification Worksheets to institutions, opting rather to provide institutions with sample language to help them describe the verification process to their students, Jeff Baker Et Al, seemed to soften their position when called on the carpet by the Financial Aid Community at last week’s FSA Conference in Orlando Florida. Either way, customized verification looks like a win for Financial Aid Officers as it is likely to reduce administrative burden, especially for those students and families using the IRS Data Retrieval tool to complete their FAFSA. Could we be that lucky?

Nope. Think again.

We’ve got two new verification items to contend with. High School Completion Status and Identity / Statement of Educational Purpose. Whaaaaaat? Well, it’s a new set of documents to collect and a new process to follow, but that’s ED for you. Keeping us on our toes. For a complete overview of the changes for verification check out these resources:


New verification rules for 2012-2013 and beyond

Beginning with the 2012-2013 award year, schools will no longer be able to accept a copy of a student’s tax return to complete verification. Under new rules for verification official IRS tax return transcripts will be required instead.

Under certain conditions, an applicant selected for verification will need to submit to the school an official IRS Tax Return Transcript of 2011 tax year information for the applicant, his or her spouse, and his or her parents, as applicable. See DCL GEN-11-13 for a complete listing of such conditions. A transcript is not required to be signed by the tax filer since it originates from the IRS.

Under the new rules, schools will only be required to verify the data selected by CPS. Ed also removed the 30% verification limit and expects targeted verification of error prone data will reduce the burden on aid administrators while strengthening the efficacy of the FSA program. Students who complete the IRS data retrieval through FAFSA on the web will be less likely to be selected for verification as long as they don’t change any information pulled from the IRS.

According to Jeff Baker, speaking at last weeks FSA conference in Las Vegas, the department of education is having some trouble creating a verification worksheet for the up coming award year that will be comprehensive yet still allow aid administrators to verify only the data selected by CPS. He offered reassurance the Ed would ultimately provide additional guidance after the 1st of the year, but made no promises regarding the verification worksheet.

Some aid administrators voiced their frustration with the new rules citing cutbacks at their schools in addition to heavy workloads and asked Ed to move quickly to develop guidance and worksheets. While the 2012-2013 award year doesn’t officially begin until July 1, 2012, students can begin applying as early as January 1, 2012 so aid administrators will need to be ready pretty soon.

While the potential for the new rules to reduce the administrative burden associated with verification exists, aid administrators expect to see more conflicting information such as students filing as married and head of household on their tax return. Administrators are also concerned about the length of time it will take to get a copy of the tax return as Ed will no longer allow schools to make interim Pell disbursements. Unsubsidized Direct Loans and Parent PLUS disbursements will still be allowed.