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ED Releases New Guidance on Income Verification Requirement for Financial Aid

January 11, 2019

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PRESS CONTACTS
Matthew Shick, Sr. Director, Gov't Relations & Regulatory Affairs
Brett Roude, Legislative Analyst

The Department of Education (ED) Jan. 9 released new income verification requirements for students and families applying for financial aid through the Free Application for Federal Student Aid (FAFSA), effective immediately. The new guidance allows the submission of signed tax return documents as official family income verification.

Under the changes, families that are non-tax filers can now submit a signed document stating they do not file taxes if they are unable to receive Internal Revenue Services (IRS) documentation. ED announced that the changes will apply to the 2018-19 and 2019-20 financial aid cycles. The department also stated that the new guidance supersedes all previous guidance that limits the use of an income tax return as acceptable documentation to verify tax information and supplements the guidance regarding the requirement to obtain verification of nonfiling.

The guidance is intended “to reduce the burden on students and families that have difficulty in obtaining documentation needed to verify their [FAFSA] information.” ED previously required families to submit tax transcripts directly from the IRS as income verification. Approximately one-quarter to one-third of financial aid applicants are chosen by ED for income verification each year.

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