Skip to content

Ask a Fed – Perkins, Verification, and More

March 31, 2016

Federal Training Officer David Bartnicki recently shared these updates. bartnicki

Perkins

On March 14, 2016, we provided updated guidance around what supporting documentation a school can use when assigning Perkins loans to the Department in various situations. We hope the information and updated processing will help streamline the Perkins assignment process.

In addition, we announced on March 30, 2016 that ED had posted a new combined Federal Perkins Loan Assignment and Liquidation Guide on the Campus-Based Processing Information Page on the Information for Financial Aid Professionals (IFAP) website.

The guide now includes information about the assignment process, as well as detailed information about the required processes for the liquidation of a school’s Federal Perkins Loan portfolio and Perkins Loan Revolving Fund when a school decides to end its participation in the Perkins Loan Program. In addition, we have included information about two key processing changes: Perkins Loan Assignment System (PLAS) and Online Perkins Liquidation Module in the eCampus-Based (eCB) System. For more information, please see the March 30, 2016 electronic announcement or contact the Campus-Based Call Center at 877.801.7168.

3rd Party Debt Relief Companies

On March 30, 2016, ED posted an announcement indicating that we are aware of certain 3rd party debt relief companies inappropriately using the Department’s or school’s logo or other identifying information with student loan borrowers to give the impression that they were working with or for the government or school to provide a benefit to student loan borrowers. Many times these “benefits” (for which students are charged) can often be obtained at no charge, such as consolidations, resolving defaults or changing payment plans.

Many of you have contacted me about ads, phone calls, fliers, etc., being shared with students about some of these questionable practices. We strongly recommend that each institution monitor whether there are organizations that are using the institution’s name, mascots, logos, trademarks or other identifying information in a manner that has not been authorized by the institution. If an institution believes that an organization is using, without the institution’s approval, the institution’s identity as part of its marketing efforts, it should consider contacting its Attorney General’s Office or other state consumer protection agency or consider taking legal action against such companies.

For more information about how you can help promote our free services to student borrowers, along with great resources you can utilize, please see the March 30, 2016 electronic announcement for more information.

Prior-Prior Year

ED posted an electronic announcement on March 18, 2016 that provides a nice chart outlining what EFC related 17-18 FAFSA items will actually be based on prior-prior year data (2015) and what common items will be based on current data as of when the FAFSA is signed or based on the current award year data. Financial data that will be based on 2015 data (prior-prior year) include: tax filing status, tax return status, type of return, return eligibility, AGI, taxes paid, exemptions, income earned from work, income exclusions, and untaxed income. FAFSA items current at the time the FAFSA is completed or for the current award year (not prior-prior year data) include: dislocated worker, household size, number in college, assets, and certain means-tested benefits.  For more information, please see the 3/18/16 electronic announcement.

And for those folks anxiously awaiting ED’s guidance around potential conflicting information situations and prior-prior year data, please rest assured that ED officials are continuing to develop, review and finalize guidance on this crucial topic. Once our guidance is complete we will share it with all schools as quickly as possible through our IFAP website.

High School Diplomas

In case you missed it, ED recently posted a new Q&A on our program integrity Q&A website about determining valid high school diplomas.  The new Q&A is listed below.

CVD-Q2. How can an institution determine whether a student’s high school diploma is valid for purposes of establishing Title IV eligibility?

CVD-A2. Final regulations published on October 29, 2010, require postsecondary institutions to develop and apply procedures to evaluate the validity of a student’s high school diploma if the institution or the Department has reason to believe that the diploma is not valid or was not obtained from an entity that provides secondary school education (34 CFR §668.16(p)).

Because we rely on a State’s determination as to what constitutes a high school diploma in that State, we encourage institutions to check with the relevant department or agency in the State in which the high school is located to determine if a diploma from the high school (which does not have to be accredited) is recognized by that State (see Volume 1 of the Federal Student Aid Handbook). Another resource within the State that an institution may want to consult with is the State Attorney General’s office. For example, one State Attorney General’s office has taken enforcement actions against entities that issue diplomas or other certificates of completion of secondary education without providing a legitimate secondary school education.

Another publication that may be helpful to institutions is the “State Regulation of Private and Home Schools” which provides a brief description for each state’s legal requirements that apply to K–12 private schools in the United States. See http://www2.ed.gov/about/offices/list/oii/nonpublic/regulation-map.html. [Guidance issued 2/23/2016]

Verification

On March 23, 2016, ED posted the long awaited 16-17 IRS Tax Return Transcript Matrix to assist schools in their verification efforts regarding applicant- and family-tax-related items. The matrix provides a cross-walk between IRS financial data on the FAFSA, tax return transcripts and paper tax returns.

In addition, many schools have asked me questions about the “recomputed” line items appearing on 2015 tax transcripts and how those items should be evaluated.  Please note that in the 3/23/16 EA we specifically state that any line item on the IRS Tax Return Transcripts that say “RECOMPUTED <tax return item name> PER COMPUTER” should be ignored for purposes of verification.

Finally, several schools and servicers have had some concerns with our matrix guidance concerning the taxes paid line items with various IRS transcripts. Please note that we are currently reviewing these concerns and if, and when, any updates occur regarding the matrix we will promptly notify the higher ED community through IFAP.

Have a great rest of the week and hope to see many of you at your upcoming state conferences.

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: