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| **DCLPublicationDate: 4/1/95DCLID: GEN-95-19AwardYear: Summary: 1995-96 Verification Changes; Updated Verification Worksheets; Signature Requirement Chart**April 1995GEN-95-19SUBJECT:  1995-96 Verification Changes                   Updated Verification Worksheets                   Signature Requirement ChartREFERENCES:  Chapter 2 of the 1995-96 Federal Student FinancialAid Handbook; Student Assistance General ProvisionsRegulations, 34 CFR Part 668.Dear Colleague:Changes to the Student Assistance General Provisions regulationspublished in the Federal Register on November 29, 1994,simplified the verification process and reduced signaturerequirements for title IV student aid applicants.  The purpose ofthis letter is to provide you with information that may help youin implementing the new provisions, thereby enhancing theopportunity for you and your students to benefit from the revisedrequirements.  In addition, we are enclosing copies of the1995-96 Verification Worksheets and a Signature Requirementchart.Effective Date     Since the new simplified verification regulations are     effective for award years beginning on or after     July 1, 1995, they should be used for any application     selected for verification for the 1995-96 award year, even     if the application is processed before July 1, 1995.Unsubsidized Aid     Applications for participation in the title IV unsubsidized     Stafford or PLUS loan programs are not subject to the     verification regulations.  Consequently, an applicant with     an expected family contribution (EFC) that is too high to     qualify the applicant for any subsidized title IV assistance     at the institution he or she is attending is not required to     complete the verification process.30 Percent Limitation Reappears - §668.54     Because of a change in law, for the 1994-95 award year,     institutions are required to verify 100 percent of all     applications selected for verification by the Secretary's     edits, if those applications were processed on or after     July 1, 1994 (see Dear Colleague Letter GEN 94-41).     Beginning with the 1995-96 award year, institutions must     verify all selected applicants, except that no institution     will be required to verify more than 30 percent of its total     Federal student aid applicant pool in any award year.     Applications not selected for verification by the     Secretary's edits, but verified by the institution, cannot     be included as verified for the purpose of determining when     the institution has met its 30% verification requirement.Institutionally Selected Applications     If an institution selects applicants for verification not     selected by the Secretary, the institution may verify any     data element(s) it chooses and may use the tolerance options     provided under §668.59.Updating Change - §668.55     Beginning with the 1995-96 award year, Title IV applicants     are no longer required to sign updating statements at the     time they submit SARs or other documents to their school.     Please note that this change does not impact the provision     requiring applicants to update application information if     there is a change in household size, a change in the number     of household members attending postsecondary educational     institutions, or a change in dependency status, unless those     changes result from a change in the applicant's marital     status.  Also, please note that it is the applicant's     responsibility, and not the institution's, to update the     above information.Social Security Benefits - §668.57     Institutions are not required to verify or document receipt     of Social Security benefits simply because there is an     amount indicated on the application.  Documentation is only     required if the institution has reason to believe that     benefits were received and were not reported, or that the     applicant has incorrectly reported the amount of Social     Security benefits.Signature Requirement Change - §668.57     Beginning with the 1995-96 processing year, verification     documents, other than copies of tax returns, require the     signature of the applicant and at least one parent who     completed the Free Application for Federal Student Aid     (FAFSA) of a dependent student, without regard to which     parent's income was used in calculating the applicant's EFC.     If an independent student is married, both applicant and     spouse must sign any document necessary to verify the number     of family members in the household and the number of family     household members enrolled in postsecondary institutions.     Adjusted gross income, income earned from work, and U.S.     taxes paid will continue to be verified using a copy of a     tax return signed by at least one of the filers of a joint     return, by the preparer of the return, or stamped with the     name and address of the preparer of the return.     Faxed or photocopied signatures on verification documents     are acceptable assuming that they are legible.  The current     verification regulations do not require original signatures     on documents used to verify application information.  Please     refer to Chapter Two, Required Verification Items and     Acceptable Documentation, in The Verification Guide.Tolerance Change - §668.59     The separate $200 Federal Pell Grant and $800 Stafford Loan     and campus-based verification tolerances have been     eliminated for the 1995-96 award year.  Instead, one $400     tolerance will be used for verification for all title IV     programs.  This $400 tolerance is a net tolerance.  The     tolerance amount is the difference between the corrected sum     of AGI plus untaxed income minus U.S. taxes paid and the     uncorrected sum of AGI plus untaxed income minus U.S. income     taxes paid.  If the net difference is greater than $400,     then the applicant's EFC must be recalculated.  The example     below will further clarify the use of the $400 tolerance     option:     Example:  A student's $2500 AGI is corrected to read $3000,                      and the student's $300 entry for U.S. income taxes                      paid is corrected to read $400.  The student's                     untaxed income remains the same in both                     calculations at $300.  Therefore, the student's                     corrected sum of AGI plus untaxed income minus                     U.S. income taxes paid is $2900, and the student's                     uncorrected sum using the same calculation is                     $2500, leaving a net difference of $400, which is                     within the allowable tolerance.  In this example,                     recalculation of the EFC is not required and a                     Verification Status Code "T" can be used when                     Federal Pell Grant payment information is reported                     to the Department.Of course, institutions may recalculate an applicant's EFCinstead of using the verification tolerance if they so choose.1995-96 Verification Worksheets     The 1995-96 Verification Worksheets for dependent and     independent students have been enclosed for your     convenience.Signature Requirements     A Signature Requirement Chart for use beginning with the     1995-96 delivery system process is enclosed.For further information concerning the material listed above,please contact Lorraine Kennedy of my staff on (202) 708-7888.Sincerely,William L. MoranDirectorStudent Financial Assistance ProgramEnclosures[[ The Enclosures "Signature Requirements for the 1995-96 Delivery System",Independent Student 1995-96 Verification Worksheet" and "Dependent Student 1995-96 Verification Worksheet" are currently unavailable for viewing.  Please reference your paper document for additional information.]] |
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