Federal Student Aid’s (FSA) June 17,, 2024, Electronic Announcement clarifies issues around conflicting information that have not needed to be addressed before the 2024 – 2025 award year and the simplified FAFSA®. However, before we go there, let’s review treatment of conflicting information in a broader sense.
Conflicting information can occur in several different scenarios:
- When two related responses do not align. For example, the tax return information contains a large amount of income from interest and/or dividends, but no savings or investment values were reported.
- When based on your knowledge and experience, a response provided in the FAFSA is incorrect. For example, the student reports they are a non-filer and then reports $25,000 in earnings elsewhere in the application.
- When a subsequent ISIR with different responses is received after the student is awarded. So, review every ISIR received for students that are still enrolled even if they already have been verified and/or have had financial aid disbursed.
The information can be in different parts of the financial aid application, or it can be similar information collected by another campus department, or it can be new information that brings a prior year’s responses into question. Regardless, you must resolve the conflicting information by documenting the correct response. When you do this will depend on where in the cycle you determine there is a conflict. If it occurs during the normal course of reviewing an application, the conflicting data must be resolved before any Title IV funds are disbursed. If a discrepancy or possible erroneous information is discovered while completing a Professional Judgment (PJ) review, resolve the issue before completing the adjustment. Finally, the discrepancy is not discovered until after funds have been disbursed, you are still required to reconcile, confirm eligibility, and if necessary, return funds when the student is no longer eligible.
The Electronic Announcement addresses situations where there may be conflicting or erroneous data caused by a processing issue. In some cases mentioned below, the ISIR will be reprocessed when the issue has been resolved which will resolve the discrepancy.
- Data for education tax credits transferred via the FA-DDX prior to March 30, 2024. According to FSA, the incorrect data initially provided has been updated and ISIRs reprocessed, so make sure to use the most recent ISIR received.
- There was a problem with reporting accurately when a contributor had amended their base-year tax return. It has been resolved and the problematic ISIRs reprocessed. Going forward, only the original tax return data will be provided and there will not be an indication of an amended return being filed. That means you probably won’t know if an amended return was filed and that’s okay. However, if you do learn that happened, you’ll need to collect a copy of the amended return and make the necessary adjustments.
- The instructions for manually reporting taxes paid in the application do not reference the same line numbers as the source data provided by the FA-DDX and will at times be a different amount. The instructions are being corrected for the 2025-2026 FAFSA. Until then, it is okay to use the manually entered data without ‘resolving’ the conflict between the two.
- There are still some calculation errors that appear to be discrepant data but are not. FSA is maintaining a list of open issues and workarounds that you should be aware of. Any discrepancies created by errors do not need to be resolved. You will probably need to use PJ to calculate an accurate Student Aid Index (SAI) and be able to award the student.
Finally, there are some new conflicting information situations that result from FTI and manual data that are different in the same ISIR. In some cases, it is correct and in others it is discrepant and must be resolved.
- A change in the marital status of a contributor could cause a difference in the FA-DDX provided data and what was manually entered in the application. The best example of this is a parent or student who was married in the base year and filed a joint tax return but is now divorced or separated. Since only the contributor’s income should be included in the calculation, the manually entered data should be used.
- When a contributor reports they did not file during the base year, but there is FTI information present, there is a conflict that must be resolved.
- There have been reports of taxable grants and scholarships being manually entered in amounts equal to the Adjusted Gross Income (AGI) included in the FTI. It is possible for this to happen, and you are not required to collect additional documentation unless: (1) the ISIR was selected for verification or (2) you have reason to believe the manually entered data is inaccurate. In the second case, treat it like any other conflicting information situation.
The hardest part of resolving conflicting information is knowing when you have it. Often, different departments maintain data in stand-alone systems or even on paper. This is why you need a good plan to understand where the data resides, how you can access it, and at what point in time you should do so. If you don’t have a policy in place and need help creating one let us know at info@heag.us. Our regulatory experts will provide the support you need to ensure all your operations are compliant.