Financial Aid Finder

The 2012-2013 award year is bringing many new changes to the world of Financial Aid. One of these changes is the verification process to the FAFSA (Free Application for Federal Student Aid). If you want to avoid spending more time at your campus’ Financial Aid office then you do studying for finals, you’ll want to make sure and find out what changes are taking place.

What is Verification?

When you fill out the FAFSA, you have to put a slew of information on the application. That information includes not only the basics (name, social security number, birth date, address) but also household size and income information. If you’re a dependent student, that means you have to include parent’s information as well. With that much information and the massive amount of aid that the Department of Education is awarding students, there has to be a review system. That system is called: Verification. It’s the Department of Ed’s way to try and make sure that the information student’s are putting on the FAFSA is accurate and catch any mistakes that may have occurred.

When a FAFSA is selected for verification, schools CANNOT award any aid until verification is complete. That means no grants or federal loans until the process is done. Often schools will have a deadline to bring in your verification documents. It’s critical that you complete this on time so there is no delay in getting your financial aid; or worse, you get no aid at all!

Documents that the school might ask for are:

• a verification worksheet (made available from the school)
• your federal income taxes and
• your parents’ federal income taxes if you are a dependent student. Sometimes the school may ask for W2 information as well.

FAFSA Verification Changes

In the past, a student selected for verification was allowed to provide a copy of their federal income taxes (also called the 1040). A signed copy of the 1040 and any other documents the school asked for was enough for the verification process to get going. This was pretty simple since most people save an important document like their federal income Taxes.

For the 2012-2013 FAFSA award year, things aren’t so simple. If you are selected for verification this year, a copy of your 1040s just won’t do. Instead, the Department of Ed is requiring that you provide a copy of your tax transcripts. Tax transcripts come from the IRS as proof that taxes were filed. It has all the same information that is on the 1040s but it’s the information that the IRS has on record. You can order a transcript off the IRS website or call and request one. It can take a few weeks to get and if you recently filed taxes, they may not even have it on file in their system yet! Remember, a school can’t award financial aid until verification is complete.

Linking Your Taxes to FAFSA & More

There is some good news. First, the Department of Education has allowed school to still use a copy of the 1040s for verification up until July 15, 2012. After that, they will only allow the transcripts, as listed above. What’s a student to do if they don’t reach that deadline, or end up filling out their FAFSA after that date? That’s the other good news!

When filling out the FAFSA there is an option to link your taxes straight from the IRS. It is a simple process and if a student links their taxes (and their parents if a dependent student) then no transcripts are needed. Yup, you heard it correctly; linking those taxes can mean relief for everybody. It’s worth doing and actually makes filling out the FAFSA so much easier!

The first thing you have to do to be able to link your taxes is make sure you have a PIN from the Department of Ed. You use your PIN to e-sign your FAFSA and your Master Promissory note for Federal Student Loans, so chances are good you have one already. If you don’t have a PIN (or don’t remember if you do) go to PIN.ed.gov. Also, if you are a dependent student, make sure you have a parent log on and get their own PIN. They will need one too to be able to link their tax information on the FAFSA.

Once your PIN is all set, you are one step closer to linking those taxes. When filling out the part about your income, it will ask you a series of questions to make sure you are able to link your taxes. Certain situations; like if you or your parents are recently separated or if you amended your taxes, might not allow you to link your taxes but will give you instructions on how to complete your FAFSA.

After you select the option to link your taxes from the IRS, it will take you to a separate page. Here it will ask for your address and filing status as it appeared on your 2011 taxes. It’s very important that you type in your address exactly as it appeared on your taxes. They do allow you to go back and make corrections if it doesn’t work, so it pays to keep trying. Once they find your taxes you will be asked if you want to transfer the info to your FAFSA. Check the box and you are good to go!

It’s important that once you go back to the FAFSA site, you don’t make any changes to the information that was linked from the IRS site. If you do, you will still need to provide the tax transcripts.

There you go! You have just saved yourself some time and headaches. You have also made the financial aid office happy, which is always a good thing. Even if you don’t get selected for verification, you saved yourself the hassle of filling out the income information yourself. Now you have more time to study for those finals!

Tags: FAFSA, FAFSA Verification, federal financial aid, student financial aid