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Committee Reports
Government Relations Committee
Submitted by Carmen Panlilio, Chair
Director, Office of Financial Aid.
New Jersey City University
GRC Response to HR3613
First, a general comment: We welcome this change,
and simply wish that we are now in the fifth or sixth year after it has been
implemented. This
is said in anticipation of the huge administrative burden placed on schools
for the first several years of implementing this change, until the “education
of the public” sets in.
Second comment: Based on reports from an EAC attendee, only five data elements
will be matched in this process: AGI, Filing status, and Total earnings
from employment, federal tax liability, and type of tax returns filed.
These are
only a portion of what really determines eligibility for federal student
aid. The other half of federal methodology include items only verifiable
through collection of verification documents including family size, #
in college, untaxed income, etc. Therefore, comment to the politicians
and the
legislators: To expect this one step alone (the IRS match) to solve the
problem of undeserving students getting Pell grants is not realistic.
Now for issues and concerns identified at the GRC meeting:
- Timing issues: especially for the first two years after this is implemented,
until the “education of public” sets in. The fact
that the match will not occur until very late in the awarding
year will simply create
a
second layer or wave of verification for the schools, unless
they do 100% verification already, and assuming that the match
goes against the latest,
verified and corrected information on file.
- Will the match occur on the first set of information filed by
the student? Or on the latest information filed by the student?
And what
is to stop the
student from then going back after the match to change it to
more desirable figures? Will there be a lock to prevent families and
students
from
making corrections after the match is done?
- Professional Judgment concerns – will the programming be smart enough
to recognize PJ’s and not cause the FAA’s to redo these changes?
We could assume yes, since there is a flag set to identify these PJ’s
in the first place.
4. Marital status definition for financial aid may not necessarily
be the same as that of the IRS.
- Verification is a separate process, and is still in addition
to the two-step process outlined at the EAC. Will the concern
for the
privacy
of the student
and the family now prevent the FAA from requiring copies
of 1040’s
for verification purposes? Will this IRS match be considered by non-FA Practitioners
as sufficient to meet the needs of verification of taxable income? If so,
then we’re heading in the wrong direction.
- IRS – voluntary system, jeopardize this by encouraging
citizenry to not file? It would be interesting to see if there
is a decline in the
number of tax return filers in the years that follow the implementation
of the legislation.
- The “education of the public” process needs to be intensive
and effective, to reduce the anticipated pain of the first several years.
High schools, accountants, FAA’s, the feds, the media,
have to all partner in this.
- How are amended 1040’s to be dealt with? Will the IRS forward discrepant
information based on amended 1040’s as they are filed?
Bottom line, by allowing only the fact that there is a discrepancy
in reported figures to be forwarded to schools and contractors
(without sharing the actual
figures) will make this match behave much like a verification flag
late
in the awarding year, with no mitigating factors to redeem it (such
as forwarding
actual figures identified as discrepant).
It will also not expedite the processing of the application and
packaging for aid (there were no expectations for that anyway);
it will, in
fact, delay it a great deal.
And yet, we do welcome it. After all, we've been asking for
it for a while now.
 
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