Resolving Conflicting Information
Colleges and universities have an obligation to resolve conflicting information that may affect a student’s eligibility for Title IV financial aid. Notice how we said it is an institutional responsibility. That is because the conflict may develop when information is received by an office other than the Financial Aid Office. As such, institutions need to have policies and procedures to inform departments when they need to share information and how the sharing will be done.
So, what is conflicting information? It can occur under several different scenarios such as:
- FAFSA reported information that doesn’t match the federal tax return
- A C-flag or other comment on an ISIR which generally indicates an eligibility conflict (i.e., citizenship, social security administration match, selective service registration, etc.)
- FAFSA reported information that doesn’t match institutional data such as address or high school graduation status
- FAFSA reported tax filing status that is not consistent with reported earnings
Common situations that are often thought to be conflicting information but are not include:
- A difference in the FAFSA reported household size and number of tax exemptions on the 1040 – the rules are different, so these two figures may not always match and that’s okay
- Dependency status determined by FAFSA reported information and that determined by the IRS – again, different rules apply
- Expired immigration documents and secondary confirmation of an eligible status – as long as you received the former, you don’t need to collect additional documentation.
While financial aid administrators are not required to be tax professionals, there is an expectation that they are aware of some basic tax information such as the circumstances that require an individual to file a federal tax return and how eligibility for certain filing statuses is determined. So, keep a copy of IRS Publication 17 handy! Also, there is an expectation that financial aid administrators have a working knowledge of federal methodology and Title IV regulations to know when conflicting information may impact student eligibility.
How is conflicting information resolved? Well, that really depends on the cause. Each case has to be considered individually and the appropriate documentation for resolution determined. As such, each institution should have a system for not only identifying but also resolving conflicting information. It’s important to note that in these instances we expect that the conflicts are caused by reporting errors rather than an intentional attempt to deceive. If you find a case that you believe to more serious than a mistake, don’t attempt to resolve it yourself. Instead, call the Office of the Inspector General (OIG) that serves your area. Don’t forget, all conflicting information must be resolved before performing professional judgment adjustments and/or disbursing funds.
Do you want to learn more about resolving conflicting information? Visit FSA Training and find a short video on the topic under Policy and Guideline Videos. Also, the FSA Handbook, Volume 2, Chapter 3 is a great resource.
If you’re not confident that you have all your bases covered when it comes to resolving conflicting information, let The Higher Education Group assist you in identifying any weaknesses in your current procedures. Please contact us at info@heag.us to arrange for a compliance expert to review your processes and offer actionable recommendations.