Verification and Disbursement of Financial Aid
What is Federal Verification?
It is the process by which the accuracy of information submitted on the FAFSA is confirmed or verified. The federal processor selects FAFSAs for verification and adds a comment in the comment section of the student’s SAR.
Who is required to complete Federal Verification?
The federal government randomly selects who must complete the federal verification process. HCU may also select students for verification. If you are selected, you will be notified on the Student Aid Report (SAR) that you receive via email or by mail after completing your FAFSA. The HCU Office of Financial Aid will also notify you by email as well as post requirements to your Populi Student Account.
If you have been selected for Verification, you must complete the process in order to receive federal aid such as Pell Grant, FSEOG Grant, Work-Study, and Federal Direct Student Loans.
How to Complete Federal Verification Requirements
Students will be randomly selected by the federal processor to verify specific items from the FAFSA application. You may be selected to verify one or more of the items listed below based on your dependency status.
If you were required to provide parent information on your FAFSA, you are considered a dependent student and you will be required to verify one or more of the items listed below regarding you and your parent’s information.
If you were not required to provide parent information, you are an independent student and you will be required to verify one or more of the items listed in regards to you (and your spouse).
NOTE: “Selected for Verification” will appear on the Populi account of students whose FAFSA is selected to be verified. Instructions for completing the Verification process will be emailed to those students from the Office of Financial Aid. Please do not submit any forms unless asked to do so.
Submitting Tax Data for Verification
IMPORTANT: Federal regulations prevent HCU from accepting paper copies of your federal 1040 tax return to complete verification unless specifically requested to do so by our office. We advise using the IRS Data Retrieval Tool when filling out the FAFSA. For those who are ineligible to use the IRS Data Retrieval Tool (see list below), we will require you to submit an original IRS Tax Return Transcript for the Verification process.
What is A Tax Return Transcript?
A tax return transcript is a computerized printout provided by the IRS that shows line items from your tax return (Form 1040, 1040A or 1040EZ) as it was originally filed. Make sure to request the “IRS Tax Return Transcript” and not the “IRS Tax Account Transcript”. IRS Tax Account Transcripts do not satisfy federal verification requirements.
Who Cannot Use the IRS Data Retrieval Tool?
- A married independent applicant and spouse who filed separate tax returns.
- When the parents of a dependent student filed separate tax returns.
- Filed a Puerto Rican or Foreign Tax Return
- An applicant or applicant’s parent who have had a change in marital status after the end of the tax year on December 31.
- The applicant, parent or spouse, who has filed an amended tax return.
How to use the IRS Data Retrieval Tool on the FAFSA
The IRS Data Retrieval Tool is available for online FAFSA submittals and is accessible through the FAFSA web site www.fafsa.ed.gov. The retrieval tool allows FAFSA applicants and parents the ability to transfer their filed income information from the IRS to the FAFSA. ALL FAFSA applicants and parents of dependent applicants who indicate they have filed or will file a federal tax return will be directed to use the IRS Data Retrieval Tool to report and/or update their income information on the FAFSA.
When prompted to do so on the FAFSA, click “Link To IRS”. Your FAFSA will be saved and you will be transferred to the IRS Web site. On the IRS Web site, enter the requested information. Once the IRS has validated your identification, your IRS tax information will display. You can either transfer your information from the IRS, or choose to return to FAFSA on the Web from the IRS Web site. If you do not transfer your information or choose not to return from the IRS Web site, you will have to log in to open your saved FAFSA. If you transfer your IRS tax information, questions that are populated with tax information will be marked with “Transferred from the IRS.”
This step needs to be completed for both student and parent, if both have filed federal tax returns. Once the IRS transfer for the student is complete, click back into the FAFSA and complete the same process for parent tax information with the IRS Data Retrieval Tool.
Updating Your FAFSA Information
Families who have completed their initial FAFSA with estimated income and have since completed their federal tax returns should use the data retrieval process to update the FAFSA by logging back into their FAFSA and:
- Click “View Processed FAFSA”
- Select “Make a Correction”
- Select “Financial Information” and change the tax filing status to “Filed”
Families who have completed their initial FAFSA and chose not to use the IRS Data Retrieval Tool are encouraged as well to update the FAFSA. Applicants can go back into the FAFSA and choose the IRS Data Retrieval tool and resubmit the FAFSA.
NOTE: Applicants who retrieve IRS data but subsequently change it, will be informed that they will need to explain why the information they provided is more accurate than the information that would have been obtained directly from the IRS. They will need to provide information obtained directly from the IRS.
Timeline to Complete Federal Verification Requirements
When a Students is not Required to File a Federal Tax Return
Not everyone is required to file a tax return. Some people may be able to forgo the federal tax filing process based on IRS’s policy for filing. Click here to find out if you need to complete a federal tax return.
Students who are not required to file a Federal Tax Return
Dependent Students – students who were required to provide parent information on the FAFSA
If a parent or dependent student is not required to file a federal tax return, the parent should indicate this on the Federal Verification Form for Dependent Students. If requested by the Office of Financial Aid, forms Verification Information for Parent non-tax filer and the Verification Information for Student non-tax filer must also be submitted along with copies of all W2s.
Independent Students – students who were NOT required to provide parent information on the FAFSA
If a student is not required to file a federal tax return, they should indicate this on the Federal Verification Form for Independent Students. If requested by the Office of Financial Aid, the Verification Information for Student non-tax filer must also be submitted along with copies of all W2s.
Tax Return Information for Individuals with Unusual Circumstances
For example, you were granted a tax extension, filed an amended return, victim of identity theft or filed a foreign tax return. Click here for more information on the Verification requirements for individuals with unusual circumstances.
Received Foreign Income and are not required to file a tax return
Income from non-IRS tax returns would be reported on the FAFSA, with the value of the foreign income and taxes reported in U.S. dollars, using the exchange rate at the time of the application.
For verification these returns are considered equivalent to IRS Form 1040. If the student (or his parents) earned foreign income but did not pay any taxes on it, it should be reported as untaxed income. Persons from a foreign country who are not required to file a tax return can provide the signed statement certifying their income and taxes paid on the non-tax filer form.
Students/ parents are being audited by the IRS
If you are being audited by the IRS, you cannot complete federal verification and receive federal aid until the audit is complete and you are able to submit federal tax documentation.
Financial Aid Disbursement Process
Disbursement Schedules: Disbursement schedules for Pell Grants and student loans are provided to the student with their award letter. They are also published here.
Federal aid funds will be credited to the students’ accounts and will pay unpaid charges in the following order: tuition, fees, books, dorm and any other remaining charges. Any excess funds due to the student after the account is paid in full will be disbursed to the student in accordance with the published disbursement schedules. Students should maintain a current mailing address through their Populi account.
NOTE: Students expecting a refund check, please note that checks may not be mailed until the Wednesday after the scheduled disbursement date.
Pell Grants and student loans are processed in two disbursements each semester (Fall, Spring) consisting of two payments within each semester; the first at the 5th week of school and the second disbursement being at midterm. Application review, verification (if selected), and awarding of aid must be completed before aid can be disbursed.
Disbursement of aid is contingent on the student’s financial aid file status and enrollment. If a student’s file is incomplete at the time of the scheduled disbursement dates, the Business Office will disburse their award after all financial aid holds/incompletes are cleared. The disbursement process is initiated by the student accepting or declining their financial aid offers posted to their Populi student account.
Financial aid award information is posted as “scheduled” on the student’s account until the Office of Financial Aid verifies the student’s actual enrollment and class attendance for the semester. Because the first disbursement does not occur until the 5th week of school, students are allowed to carry a balance until after the second disbursement, which occurs at midterm.
Contact the Office of Financial Aid at firstname.lastname@example.org or by calling 800-367-3565 x303.