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On July 9, the U.S. Department of Education (ED) released updated guidance regarding FAFSA verification and professional judgment during the
2019-20 and 2020-21 academic years. On verification, the Department reiterates the documentation that can be used in lieu of a tax transcript or a verification of non-filer form (VNF). For professional judgment, ED will not hold institutions to harm
for having an increased rate of professional judgments during these academic years.
Students who are selected for FAFSA verification must provide either a tax transcript or a VNF form. This extension of the alternate documents for verification is crucial to ensuring that students are able to access the financial aid for which they are
eligible. Tax filers continue to be able to submit a tax return, as granted on May 29, 2019, if they are unable to obtain a tax transcript from the IRS. Many students
cannot obtain tax transcripts, at this time due to IRS suspending the ability to request and receive documents by mail.
For non-tax-filers, ED has instructed institutions to accept a copy of a pay stub, an employment offer letter, evidence of direct deposit from an employer in place of an IRS Form W-2. These documents were added to the already eligible signed statement
including income earned from work, the source of that income, and the reason why the student is unable to obtain the IRS Form W-2.
On professional judgment, ED will adjust their algorithm so that institutions are not held accountable for an increase in professional judgment cases. This is a crucial step due to the economic effects of the pandemic, where so many families are experiencing
unexpected unemployment. Institutions should not be concerned that their efforts to assist students will impact their standing with ED.
NCAN has been awaiting this updated guidance, as the June 30 lapse allowing for alternate documents for verification and the rescission of professional judgment guidance made it far more difficult for students to access the financial aid they need to
afford college. This new guidance, released July 9, is an important step forward to helping students from low-income backgrounds access financial aid for this fall.
However, there is more that can and should be done to support both institutions and students. As in 2009 during the Great Recession,
institutions should be able to use the receipt of unemployment benefits to zero out income earned from work, as well as able to discount the unemployment benefits from being counted toward income eligible to be used toward education expenses. For
verification, NCAN encourages the Department to keep the percentage of students selected as low as possible to maintain accuracy in the aid program.
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