Over the course of the past couple of months I have been receiving a number of questions from readers related to the verification process that is randomly initiated for some families after they complete the FAFSA. The verification process is not too cumbersome but it does require some follow through from the families and the student. A couple of months ago, I wrote an informative article to help guide those families that are selected for verification. You can read it here.

I recently got a question from a reader that inquired about a college’s ability to access their IRS records to verify the information they submitted on the FAFSA. A similar question I received asked if the Department of Education can arbitrarily access their tax information.

Fortunately, for your privacy’s sake,  the answer to both of these questions is a resounding NO…

I can tell you that colleges and universities would love to have the ability to pull up your IRS database information at the click of a button. Not because they are nosy people or want to root through your private information, it would just make the verification process go much smoother and they wouldn’t be forced to “bug” families and students that have been chosen for verification. As you can imagine though, this type of access provided to financial aid administrators would definitely infringe upon a number of your rights…so… as helpful as it may be, college and university financial aid offices will probably never have direct access to your IRS information. I only say probably because laws and rules are subject to change and you never know when the IRS will come up with an easy access system that allows private non-government third parties to research your tax information. (who knows, maybe that already exists!)

Which leads us to the Department of Education question above… The Department of Education does not have direct access to your tax information. However, when you are completing your FAFSA, you now have the ability to give permission to DOE to import your recent tax information into the appropriate fields on your FAFSA. They have been testing this importing process for the past 4-5 months and plan to roll it out in January of 2011 for all students/families completing the FAFSA. I am sure it will not be immune from bugs and glitches but it is certainly a step in the right direction and a good use of technology.

Hope this information is helpful to our readers. If you find that you have a question related to paying for college, saving for college, or the financial aid process, please be sure to drop us a line. We are always glad to help our readers.

Ah.. the dreaded “V” word. It is a term that you don’t like to hear when going through the financial aid process but the unfortunate truth is that about one third of all families completing the FAFSA are randomly selected for verification. If you happen to complete something wrong on the FAFSA, it WILL increase your chances of being selected for verification. In addition, if a financial aid officer thinks your information is not quite up to snuff, they can flag your file to be channeled through the verification process…so always be nice to the financial aid folk!

The most simplistic definition that I can provide for the verification process is that it is the Department of Education’s systematic approach for auditing the information that you submitted on the FAFSA. Don’t let it scare you though… I have heard some families compare it to an IRS audit but I can assure you that the verification process is much easier and will only consume about an hour of your time (that is including a restroom break and a short snack).

If you have been selected for verification, you will need to complete a worksheet provided by the Department of Education and submit it, along with appropriate documentation, to the financial aid office at your college. You can download a copy of the most current verification worksheet here.

The verification worksheet is going to prompt you for the following information:

• Student Information- Name, Social Security Number, Date of Birth, etc…
• Family Information- Name and relationship of everyone living in your parent’s household and even other children that may not live in the household but your parent’s provide more than half of their support
• Student Tax Information- Copy of tax return (as applicable) or amounts and sources of taxable income, dollar amount and sources of untaxed income
• Parent Tax Information- Copy of tax return (as applicable) or amounts and sources of taxable income, dollar amount and sources of untaxed income
• Signature from the Student and a Parent- very important and easily overlooked

Once you have this worksheet completed (and have made a copy for your records), you will submit it to the school with any supporting documentation requested by the financial aid office. The financial aid administrator will compare the information you provided with the information submitted on your FAFSA. If everything checks out, you are good to go. If you forgot something, the school will contact you to let you know that they are missing some information. (You should follow-up to their request ASAP). If the information on your verification worksheet is different than what you put on your FAFSA, the financial aid administrator is required to go in and update your Student Aid Report (SAR). Which could impact (good or bad) the amount of financial aid you receive…

The important thing to remember through the verification process is that you don’t let grass grow under your feet. If you are selected for verification, you need to get the appropriate worksheet completed right away (see link above) and follow-up with the school to make sure there is nothing else required from you. The reason for this urgency is that you will not be eligible to receive any need-based financial aid until the verification process is complete.

Hope this information is helpful. If you think others could benefit from this, please feel free to use the “Share Tab” below to pass it along.