34 C.F.R. Subpart E—Verification of Student Aid Application Information
Title 34 - Education
Source: 56 FR 61337, Dec. 2, 1991, unless otherwise noted.
(a) Scope and purpose. The regulations in this subpart govern the verification by institutions of information submitted by applicants for student financial assistance in connection with the calculation of their expected family contributions (EFC) for the Federal Pell Grant, campus-based, Federal Stafford Loan, Federal Direct Stafford/Ford Loan programs. (b) Applicant responsibility. If the Secretary or the institution requests documents or information from an applicant under this subpart, the applicant shall provide the specified documents or information. (c) Foreign schools. The Secretary exempts from the provisions of this subpart institutions participating in the Federal Stafford Loan Program that are not located in a State. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 59 FR 22067, Apr. 28, 1994; 59 FR 61207, Nov. 29, 1994; 63 FR 40625, July 29, 1998] The following definitions apply to this subpart: Base year means the calendar year preceding the first calendar year of an award year. Edits means a set of pre-established factors for identifying— (a) Student aid applications that may contain incorrect, missing, illogical, or inconsistent information; and (b) Randomly selected student aid applications. Institutional student information report as defined in 34 CFR 690.2 for purposes of the Federal Pell Grant, campus-based, Federal Stafford Loan, and William D. Ford Federal Direct Loan programs. Student aid application means an application approved by the Secretary and submitted by a person to have his or her EFC determined under the Federal Pell Grant, campus-based, Federal Stafford Loan, Federal Direct Loan or programs. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 59 FR 22067, Apr. 28, 1994; 59 FR 61206, 61207, Nov. 29, 1994; 69 FR 12276, Mar. 16, 2004] (a) An institution shall establish and use written policies and procedures for verifying information contained in a student aid application in accordance with the provisions of this subpart. These policies and procedures must include— (1) The time period within which an applicant shall provide the documentation; (2) The consequences of an applicant's failure to provide required documentation within the specified time period; (3) The method by which the institution notifies an applicant of the results of verification if, as a result of verification, the applicant's EFC changes and results in a change in the applicant's award or loan; (4) The procedures the institution requires an applicant to follow to correct application information determined to be in error; and (5) The procedures for making referrals under §668.16. (b) The institution's procedures must provide that it shall furnish, in a timely manner, to each applicant selected for verification a clear explanation of— (1) The documentation needed to satisfy the verification requirements; and (2) The applicant's responsibilities with respect to the verification of application information, including the deadlines for completing any actions required under this subpart and the consequences of failing to complete any required action. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 59 FR 61206, Nov. 29, 1994] (a) General requirements. (1) Except as provided in paragraph (b) of this section, an institution shall require an applicant to verify application information as specified in this paragraph. (2)(i) An institution shall require each applicant whose application is selected for verification on the basis of edits specified by the Secretary, to verify all of the applicable items specified in §668.56, except that no institution is required to verify the applications of more than 30 percent of its total number of applicants for assistance under the Federal Pell Grant, Federal Direct Stafford/Ford Loan, campus-based, and Federal Stafford Loan programs in an award year. (ii) An institution may only include those applicants selected for verification by the Secretary in its calculation of 30 percent of total applicants. (3) If an institution has reason to believe that any information on an application used to calculate an EFC is inaccurate, it shall require the applicant to verify the information that it has reason to believe is inaccurate. (4) If an applicant is selected to verify the information on his or her application under paragraph (a)(2) of this section, the institution shall require the applicant to verify the information as specified in §668.56 on each additional application he or she submits for that award year, except for information already verified under a previous application submitted for the applicable award year. (5) An institution or the Secretary may require an applicant to verify any data elements that the institution or the Secretary specifies. (b) Exclusions from verification. (1) An institution need not verify an application submitted for an award year if the applicant dies during the award year. (2) Unless the institution has reason to believe that the information reported by the applicant is incorrect, it need not verify applications of the following applicants: (i) An applicant who is— (A) A legal resident of and, in the case of a dependent student, whose parents are also legal residents of, the Commonwealth of the Northern Mariana Islands, Guam, or American Samoa; or (B) A citizen of and, in the case of a dependent student, whose parents are also citizens of, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau. (ii) An applicant who is incarcerated at the time at which verification would occur. (iii) An applicant who is a dependent student, whose parents are residing in a country other than the United States and cannot be contacted by normal means of communication. (iv) An applicant who is an immigrant and who arrived in the United States during either calendar year of the award year. (v) An applicant whose parents' address is unknown and cannot be obtained by the applicant. (vi) An applicant who is a dependent student, both of whose parents are deceased or are physically or mentally incapacitated. (vii) An applicant who does not receive assistance for reasons other than his or her failure to verify the information on the application. (viii) An applicant who transfers to the institution, had previously completed the verification process at the institution from which he or she transferred, and applies for assistance on the same application used at the previous institution, if the current institution obtains a letter from the previous institution stating that it has verified the applicant's information, the transaction number of the verified application, and, if relevant, the provision used in §668.59 for not recalculating the applicant's EFC. (3) An institution need not require an applicant to document a spouse's information or provide a spouse's signature if— (i) The spouse is deceased; (ii) The spouse is mentally or physically incapacitated; (iii) The spouse is residing in a country other than the United States and cannot be contacted by normal means of communication; or (iv) The spouse cannot be located because his or her address is unknown and cannot be obtained by the applicant. (Authority: 20 U.S.C. 1091, 1094) [56 FR 61337, Dec. 2, 1991, as amended at 59 FR 22067, Apr. 28, 1994; 59 FR 61206, Nov. 29, 1994; 63 FR 40625, July 29, 1998] (a)(1) Unless the provisions of paragraph (a)(2) or (a)(3) of this section apply, an applicant is required to update— (i) The number of family members in the applicant's household and the number of those household members attending postsecondary educational institutions, in accordance with provisions of paragraph (b) of this section; and (ii) His or her dependency status in accordance with the provisions of paragraph (d) of this section. (2) An institution need not require an applicant to verify the information contained in his or her application for assistance in an award year if— (i) The applicant previously submitted an application for assistance for that award year; (ii) The applicant updated and verified the information contained in that application; and (iii) No change in the information to be updated has taken place since the last update. (3) If, as a result of a change in the applicant's marital status, the number of family members in the applicant's household, the number of those household members attending postsecondary education institutions, or the applicant's dependency status changes, the applicant shall not update those factors or that status. (b) If the number of family members in the applicant's household or the number of those household members attending postsecondary educational institutions changes for a reason other than a change in the applicant's marital status, an applicant who is selected for verification shall update the information contained in his or her application regarding those factors so that the information is correct as of the day the applicant verifies the information. (c) If an applicant has received Federal Pell Grant, campus-based, Federal Stafford Loan, or Federal Direct Stafford/Ford Loan program assistance for an award year, and the applicant subsequently submits another application for assistance under any of those programs for that award year, and the applicant is required to update household size and number attending postsecondary educational institutions on the subsequent application, the institution— (1) Is required to take that newly updated information into account when awarding for that award year further Federal Pell Grant or campus-based, assistance or certifying a Federal Stafford Loan application, or originating a Direct Subsidized Loan; and (2) Is not required to adjust the Federal Pell Grant or campus-based, assistance previously awarded to the applicant for that award year, or any previously certified Federal Stafford Loan application or previously originated Direct Subsidized Loan for that award year, to reflect the newly updated information unless the applicant would otherwise receive an overaward. (d)(1) Except as provided in paragraphs (a)(3) and (d)(2) of this section, if an applicant's dependency status changes after the applicant applies to have his or her EFC calculated for an award year, the applicant must file a new application for that award year reflecting the applicant's new dependency status regardless of whether the applicant is selected for verification. (2) If the institution has previously certified a Federal Stafford Loan application for an applicant, the applicant shall not update his or her dependency status on the Federal Stafford Loan application. If the institution has previously originated a Direct Subsidized Loan for a borrower, the school shall not update the borrower's dependence status on the loan origination record. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 59 FR 22067, 22068, Apr. 28, 1994; 59 FR 61206, 61207, Nov. 29, 1994; 63 FR 40625, July 29, 1998; 69 FR 12276, Mar. 16, 2004] (a) Except as provided in paragraphs (b), (c), (d), and (e) of this section, an institution shall require an applicant selected for verification under §668.54(a)(2) or (3) to submit acceptable documentation described in §668.57 that will verify or update the following information used to determine the applicant's EFC: (1) Adjusted gross income (AGI) for the base year if base year data was used in determining eligibility, or income earned from work, for a non-tax filer. (2) U.S. income tax paid for the base year if base year data was used in determining eligibility. (3)(i) For an applicant who is a dependent student, the aggregate number of family members in the household or households of the applicant's parents if— (A) The applicant's parent is single, divorced, separated or widowed and the aggregate number of family members is greater than two; or (B) The applicant's parents are married to each other and not separated and the aggregate number of family members is greater than three. (ii) For an applicant who is an independent student, the number of family members in the household of the applicant if— (A) The applicant is single, divorced, separated, or widowed and the number of family members is greater than one; or (B) The applicant is married and not separated and the number of family members is greater than two. (4) The number of family members in the household who are enrolled as at least half-time students in postsecondary educational institutions if that number is greater than one. (5) The following untaxed income and benefits for the base year if base year data was used in determining eligibility— (i) Social Security benefits if the institution has reason to believe that those benefits were received and were not reported or were incorrectly reported; (ii) Child support if the institution has reason to believe that child support was received; (iii) U.S. income tax deduction for a payment made to an individual retirement account (IRA) or Keogh account; (iv) Interest on tax-free bond; (v) Foreign income excluded from U.S. income taxation if the institution has reason to believe that foreign income was received; (vi) The earned income credit taken on the applicant's tax return; and (vii) All other untaxed income subject to U.S. income tax reporting requirements in the base year which is included on the tax return form, excluding information contained on schedules appended to such forms. (b) If an applicant selected for verification submits an SAR or output document to the institution or the institution receives the applicant's ISIR, within 90 days of the date the applicant signed his or her application, or if an applicant is selected for verification under §668.54(a)(2), the institution need not require the applicant to verify— (1) The number of family members in the household; or (2) The number of family members in the household, who are enrolled as at least half-time students in postsecondary educational institutions. (c) If the number of family members in the household or the amount of child support reported by an applicant selected for verification is the same as that verified by the institution in the previous award year, the institution need not require the applicant to verify that information. (d) If the family members who are enrolled as at least half-time students in postsecondary educational institutions are enrolled at the same institution as the applicant, and the institution verifies their enrollment status from its own records, the institution need not require the applicant to verify that information. (e) If the applicant or the applicant's spouse or, in the case of a dependent student, the applicant's parents receive untaxed income or benefits from a Federal, State, or local government agency determining their eligibility for that income or those benefits by means of a financial needs test, the institution need not require the untaxed income and benefits to be verified. (Authority: 20 U.S.C. 1094, 1095) [56 FR 61337, Dec. 2, 1991, as amended at 57 FR 39089, Aug. 27, 1992; 59 FR 22067, Apr. 28, 1994; 59 FR 61206, Nov. 29, 1994] (a) Adjusted Gross Income (AGI), income earned from work, and U.S. income tax paid. (1) Except as provided in paragraphs (a)(2), (a)(3), and (a)(4) of this section, an institution shall require an applicant selected for verification to verify AGI and U.S. income tax paid by submitting to it, if relevant— (i) A copy of the income tax return of the applicant, his or her spouse, and his or her parents. The copy of the return must be signed by the filer of the return or by one of the filers of a joint return; (ii) For a dependent student, a copy of each Internal Revenue Service (IRS) Form W-2 received by the parent whose income is being taken into account if— (A) The parents filed a joint return; and (B) The parents are divorced or separated or one of the parents has died; and (iii) For an independent student, a copy of each IRS Form W-2 he or she received if the independent student— (A) Filed a joint return; and (B) Is a widow or widower, or is divorced or separated. (2) If an individual who filed a U.S. tax return and who is required by paragraph (a)(1) of this section to provide a copy of his or her tax return does not have a copy of that return, the institution may require that individual to submit, in lieu of a copy of the tax return, a copy of an IRS form which lists tax account information. (3) An institution shall accept, in lieu of an income tax return or an IRS listing of tax account information of an individual whose income was used in calculating the EFC of an applicant, the documentation set forth in paragraph (a)(4) of this section if the individual for the base year— (i) Has not filed and is not required to file an income tax return; (ii) Is required to file a U.S. tax return and has been granted a filing extension by the IRS; or (iii) Has requested a copy of the tax return or a Listing of Tax Account Information, and the IRS or a government of a U.S. territory or commonwealth or a foreign central government cannot locate the return or provide a Listing of Tax Account Information. (4) An institution shall accept— (i) For an individual described in paragraph (a)(3)(i) of this section, a statement signed by that individual certifying that he or she has not filed nor is required to file an income tax return for the base year and certifying for that year that individual's— (A) Sources of income earned from work as stated on the application; and (B) Amounts of income from each source; (ii) For an individual described in paragraph (a)(3)(ii) of this section— (A) A copy of the IRS Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return,” that the individual filed with the IRS for the base year, or a copy of the IRS's approval of an extension beyond the automatic four-month extension if the individual requested an additional extension of the filing time; and (B) A copy of each IRS Form W-2 that the individual received for the base year, or for a self-employed individual, a statement signed by the individual certifying the amount of adjusted gross income for the base year; and (iii) For an individual described in paragraph (a)(3)(iii) of this section— (A) A copy of each IRS Form W-2 that the individual received for the base year; or (B) For an individual who is self-employed or has filed an income tax return with a government of a U. S. territory or commonwealth, or a foreign central government, a statement signed by the individual certifying the amount of adjusted gross income for the base year. (5) An institution shall require an individual described in paragraph (a)(3)(ii) of this section to provide to it a copy of his or her completed income tax return when filed. When an institution receives the copy of the return, it may re-verify the adjusted gross income and taxes paid by the applicant and his or her spouse or parents. (6) If an individual who is required to submit an IRS Form W-2 under this paragraph is unable to obtain one in a timely manner, the institution may permit that individual to set forth, in a statement signed by the individual, the amount of income earned from work, the source of that income, and the reason that the IRS Form W-2 is not available in a timely manner. (7) For the purpose of this section, an institution may accept in lieu of a copy of an income tax return signed by the filer of the return or one of the filers of a joint return, a copy of the filer's return that has been signed by the preparer of the return or stamped with the name and address of the preparer of the return. (b) Number of family members in household. An institution shall require an applicant selected for verification to verify the number of family members in the household by submitting to it a statement signed by the applicant and one of the applicant's parents if the applicant is a dependent student, or the applicant if the applicant is an independent student, listing the name and age of each family member in the household and the relationship of that household member to the applicant. (c) Number of family household members enrolled in postsecondary institutions. (1) Except as provided in §668.56(b), (c), (d), and (e), an institution shall require an applicant selected for verification to verify annually information included on the application regarding the number of household members in the applicant's family enrolled on at least a half-time basis in postsecondary institutions. The institution shall require the applicant to verify the information by submitting a statement signed by the applicant and one of the applicant's parents, if the applicant is a dependent student, or by the applicant if the applicant is an independent student, listing— (i) The name of each family member who is or will be attending a postsecondary educational institution as at least a half-time student in the award year; (ii) The age of each student; and (iii) The name of the institution attended by each student. (2) If the institution has reason to believe that the information included on the application regarding the number of family household members enrolled in postsecondary institutions is inaccurate, the institution shall require— (i) The statement required in paragraph (c)(1) of this section from the individuals described in paragraph (c)(1) of this section; and (ii) A statement from each institution named by the applicant in response to the requirement of paragraph (c)(1)(iii) of this section that the household member in question is or will be attending the institution on at least a half-time basis, unless the institution the student is attending determines that such a statement is not available because the household member in question has not yet registered at the institution he or she plans to attend or the institution has information itself that the student will be attending the same school as the applicant. (d) Untaxed income and benefits. An institution shall require an applicant selected for verification to verify— (1) Untaxed income and benefits described in §668.56(a)(5)(iii), (iv), (v), (vi), and (vii) by submitting to it— (i) A copy of the U.S. income tax return signed by the filer or one of the filers if a joint return, if collected under paragraph (a) of this section, or the IRS listing of tax account information if collected by the institution to verify adjusted gross income; or (ii) If no tax return was filed or is required to be filed, a statement signed by the relevant individuals certifying that no tax return was filed or is required to be filed and providing the sources and amount of untaxed income and benefits specified in §668.56(a)(5) (iii), (iv), (v), and (vi); (2) Social Security benefits if the institution has reason to believe that those benefits were received and were not reported, or that the applicant has incorrectly reported Social Security benefits received by the applicant, the applicant's parents, or any other children of the applicant's parents who are members of the applicant's household, in the case of a dependent student, or by the applicant, the applicant's spouse, or the applicant's children in the case of an independent student. The applicant shall verify Social Security benefits by submitting a document from the Social Security Administration showing the amount of benefits received in the appropriate calendar year for the appropriate individuals listed above or, at the institution's option, a statement signed by both the applicant and the applicant's parent, in the case of a dependent student, or by the applicant, in the case of an independent student, certifying that the amount listed on the applicant's aid application is correct; and (3) Child support received by submitting to it— (i) A statement signed by the applicant and one of the applicant's parents in the case of a dependent student, or by the applicant in the case of an independent student, certifying the amount of child support received; and (ii) If the institution has reason to believe that the information provided is inaccurate, the applicant must verify the amount of child support received by providing a document such as— (A) a copy of the separation agreement or divorce decree showing the amount of child support to be provided; (B) A statement from the parent providing the child support showing the amount provided; or (C) Copies of the child support checks or money order receipts. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 57 FR 39089, Aug. 27, 1992; 59 FR 22067, Apr. 28, 1994; 59 FR 61206, Nov. 29, 1994; 60 FR 34432, June 30, 1995] (a)(1) If an institution has reason to believe that the information included on the application is inaccurate, until the applicant verifies or corrects the information included on his or her application, the institution may not— (i) Disburse any Federal Pell Grant or campus-based program funds to the applicant; (ii) Employ the applicant in its Federal Work-Study Program; (iii) Certify the applicant's Federal Stafford Loan application or process Federal Stafford Loan proceeds for any previously certified Federal Stafford Loan application; or (2) If an institution does not have reason to believe that the information included on an application is inaccurate prior to verification, the institution— (i) May withhold payment of Federal Pell Grant, campus-based funds; or (ii)(A) May make one disbursement of any combination of Federal Pell Grant, Federal Perkins Loan, or FSEOG funds for the applicant's first payment period; and (B) May employ or allow an employer to employ an eligible student under the Federal Work-Study Program for the first 60 consecutive days after the student's enrollment in that award year; and (iii)(A) May withhold certification of the applicant's Federal Stafford Loan application or origination of the applicant's Direct Subsidized Loan; or (B) May certify the Federal Stafford Loan application or originate the Direct Subsidized Loan provided that the institution does not deliver Federal Stafford Loan proceeds or disburse Direct Subsidized Loan proceeds. (b) If an institution chooses to make disbursement under paragraph (a)(2)(ii) (A) or (B) of this section, it is liable for any overpayment discovered as a result of the verification process to the extent that the overpayment is not recovered from the student. (c) An institution may not withhold any Federal Stafford Loan or Direct Loan proceeds from a student under paragraph (a)(2) of this section for more than 45 days. If the applicant does not complete the verification process within the 45 day period, the institution shall return the proceeds to the lender. (d)(1) If the institution receives Federal Stafford Loan or Direct Loan proceeds in an amount which exceeds the student's need for the loan based upon the verified information and the excess funds can be eliminated by reducing subsequent disbursements for the applicable loan period, the institution shall process the proceeds and advise the lender to reduce the subsequent disbursements. (2) If the institution receives Federal Stafford Loan or Direct Loan proceeds in an amount which exceed the student's need for the loan based upon the verified information and the excess funds cannot be eliminated in subsequent disbursements for the applicable loan period, the institution shall return the excess proceeds to the lender. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 57 FR 39089, Aug. 27, 1992; 59 FR 22067, 22068, Apr. 28, 1994; 59 FR 61207, Nov. 29, 1994; 63 FR 40625, July 29, 1998] (a) For the Federal Pell Grant Program— (1) Except as provided in paragraph (a)(2) of this section, if the information on an application changes as a result of the verification process, the institution shall require the applicant to resubmit his or her application information to the Secretary for corrections if— (i) The institution recalculates the applicant's EFC, determines that the applicant's EFC changes, and determines that the change in the EFC changes the applicant's Federal Pell Grant award; or (ii) The institution does not recalculate the applicant's EFC. (2) An institution need not require an applicant to resubmit his or her application information to the Secretary, recalculate an applicant's EFC, or adjust an applicant's Federal Pell Grant award if, as a result of the verification process, the institution finds— (i) No errors in nondollar items used to calculate the applicant's EFC; (ii) No dollar amount in excess of $400 as calculated by the net difference between the corrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid and the uncorrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid. If no Federal Income Tax Return was filed, income earned from work may be used in lieu of Adjusted Gross Income (AGI). (b) For the Federal Pell Grant Program— (1) If an institution does not recalculate an applicant's EFC under the provisions of paragraph (a)(2) of this section, the institution shall calculate and disburse the applicant's Federal Pell Grant award on the basis of the applicant's original EFC. (2)(i) Except as provided under paragraph (b)(2)(ii) of this section, if an institution recalculates an applicant's EFC because of a change in application information resulting from the verification process, the institution shall— (A) Require the applicant to resubmit his or her application to the Secretary; (B) Recalculate the applicant's Federal Pell Grant award on the basis of the EFC on the corrected SAR or ISIR; and (C) Disburse any additional funds under that award only if the applicant provides the institution with the corrected SAR or ISIR and only to the extent that additional funds are payable based on the recalculation. (ii) If an institution recalculates an applicant's EFC because of a change in application information resulting from the verification process and determines that the change in the EFC increases the applicant's award, the institution— (A) May disburse the applicant's Federal Pell Grant award on the basis of the original EFC without requiring the applicant to resubmit his or her application information to the Secretary; and (B) Except as provided in §668.60(b), shall disburse any additional funds under the increased award reflecting the new EFC if the institution receives the corrected SAR or ISIR. (c) For the campus-based, and Federal Stafford Loan or Federal Direct Stafford/Ford Direct Loan programs— (1) Except as provided in paragraph (c)(2) of this section, if the information on an application changes as a result of the verification process, the institution shall— (i) Recalculate the applicant's EFC; and (ii) Adjust the applicant's financial aid package for the campus-based, and Federal Stafford Loan or Federal Direct Stafford/Ford Direct Loan programs to reflect the new EFC if the new EFC results in an overaward of campus-based funds or decreases the applicant's recommended loan amount. (2) An institution need not recalculate an applicant's EFC or adjust his or her aid package if, as a result of the verification process, the institution finds— (i) No errors in nondollar items used to calculate the applicant's EFC; (ii) No dollar amount in excess of $400 as calculated by the net difference between the corrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid and the uncorrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid. If no Federal Income Tax Return was filed, income earned from work may be used in lieu of Adjusted Gross Income (AGI). (d)(1) If the institution selects an applicant for verification for an award year who previously received a Direct Subsidized Loan for that award year, and as a result of verification the loan amount is reduced, the institution shall comply with the procedures specified in §668.61(b)(2). (2) If the institution selects an applicant for verification for an award year who previously received a loan under the Federal Stafford Loan Program for that award year, and as a result of verification the loan amount is reduced, the institution shall comply with the procedures for notifying the borrower and lender specified in §668.61(b) and §682.604(h). (e) If the applicant has received funds based on information which may be incorrect and the institution has made a reasonable effort to resolve the alleged discrepancy, but cannot do so, the institution shall forward the applicant's name, social security number, and other relevant information to the Secretary. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 59 FR 22067, 22068, Apr. 28, 1994; 59 FR 61206, 61207, Nov. 29, 1994; 60 FR 34432, June 30, 1995; 63 FR 40625, July 29, 1998] (a) An institution shall require an applicant selected for verification to submit to it, within the period of time it or the Secretary specifies, the documents set forth in §668.57 that are requested by the institution or the Secretary. (b) For purposes of the campus-based, Federal Stafford Loan, Federal Direct Stafford/Ford Loan programs— (1) If an applicant fails to provide the requested documentation within a reasonable time period established by the institution or by the Secretary— (i) The institution may not— (A) Disburse any additional Federal Perkins Loan, FSEOG or funds to the applicant; (B) Continue to employ or allow an employer to employ the applicant under FWS; (C) Certify the applicant's Federal Stafford Loan application or originate the applicant's Direct Subsidized Loan; or (D) Process Federal Stafford Loan or Direct Subsidized Loan Direct Loan proceeds for the applicant; (ii) The institution shall return to the lender, or to the Secretary, in the case of a Direct Subsidized Loan, any Federal Stafford Loan or Direct Subsidized Loan proceeds that otherwise would be payable to the applicant; and (iii) The applicant shall repay to the institution any Federal Perkins Loan, FSEOG, or payments received for that award year; (2) If the applicant provides the requested documentation after the time period established by the institution, the institution may, at its option, award aid to the applicant notwithstanding paragraph (b)(1)(i) of this section; and (3) An institution may not withhold any Federal Stafford Loan proceeds from an applicant under paragraph (b)(1)(i)(D) of this section for more than 45 days. If the applicant does not complete verification within the 45-day period, the institution shall return the Federal Stafford Loan proceeds to the lender. (c) For purposes of the Federal Pell Grant Program— (1) An applicant may submit a verified SAR to the institution or the institution may receive a verified ISIR after the applicable deadline specified in 34 CFR 690.61 but within an established additional time period set by the Secretary through publication of a notice in the (2) If the applicant does not provide to the institution the requested documentation and, if necessary, a verified SAR or the institution does not receive a verified ISIR, within the additional time period referenced in paragraph (c)(1) of this section, the applicant— (i) Forfeits the Federal Pell Grant for the award year; and (ii) Shall return any Federal Pell Grant payments previously received for that award year to the Secretary. (d) The Secretary may determine not to process any subsequent application for Federal Pell Grant, and an institution, if directed by the Secretary, may not process any subsequent application for campus-based, Federal Direct Stafford/Ford Loan, or Federal Stafford Loan program assistance of an applicant who has been requested to provide documentation until the applicant provides the documentation or the Secretary decides that there is no longer a need for the documentation. (e) If an applicant selected for verification for an award year dies before the deadline for completing the verification process without completing that process, and the deadline is in the subsequent award year, the institution may not— (1) Make any further disbursements on behalf of that applicant; (2) Certify that applicant's Federal Stafford Loan application, originate that applicant's Direct Subsidized Loan, or process that applicant's Federal Stafford Loan or Direct Subsidized Loan proceeds; or (3) Consider any funds it disbursed to that applicant under §668.58(a)(2) as an overpayment. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 59 FR 22068, Apr. 28, 1994; 59 FR 61207, Nov. 29, 1994; 63 FR 40625, July 29, 1998] (a) If an institution discovers, as a result of the verification process, that an applicant received under §668.58(a)(2)(ii)(A) more financial aid than the applicant was eligible to receive, the institution shall eliminate the overpayment by— (1) Adjusting subsequent financial aid payments in the award year in which the overpayment occurred; or (2) Reimbursing the appropriate program account by— (i) Requiring the applicant to return the overpayment to the institution if the institution cannot correct the overpayment under paragraph (a)(1) of this section; or (ii) Making restitution from its own funds, by the earlier of the following dates, if the applicant does not return the overpayment: (A) Sixty days after the applicant's last day of attendance. (B) The last day of the award year in which the institution disbursed Federal Pell Grant, Federal Perkins Loan, or FSEOG funds to the applicant. (b)(1) If the institution determines as a result of the verification process that an applicant received Stafford Loan or proceeds for an award year in excess of the student's financial need for the loan, the institution shall withhold and promptly return to the lender or escrow agent any disbursement not yet delivered to the student that exceeds the amount of assistance for which the student is eligible, taking into account other financial aid received by the student. However, instead of returning the entire undelivered disbursement, the school may choose to return promptly to the lender only the portion of the disbursement for which the student is ineligible. In either case, the institution shall provide the lender with a written statement describing the reason for the returned loan funds. (2) If the institution determines as a result of the verification process that a student received Direct Subsidized Loan proceeds for an award year in excess of the student's need for the loan, the institution shall reduce or cancel one or more subsequent disbursements to eliminate the amount in excess of the student's need. (Authority: 20 U.S.C. 1094) [56 FR 61337, Dec. 2, 1991, as amended at 57 FR 39089, Aug. 27, 1992; 59 FR 22068, Apr. 28, 1994; 59 FR 23095, May 4, 1994; 59 FR 61207, Nov. 29, 1994; 63 FR 40626, July 29, 1998]
Title 34: Education
PART 668—STUDENT ASSISTANCE GENERAL PROVISIONS
Subpart E—Verification of Student Aid Application Information
§ 668.51 General.
§ 668.52 Definitions.
§ 668.53 Policies and procedures.
§ 668.54 Selection of applications for verification.
§ 668.55 Updating information.
§ 668.56 Items to be verified.
§ 668.57 Acceptable documentation.
§ 668.58 Interim disbursements.
§ 668.59 Consequences of a change in application information.
§ 668.60 Deadlines for submitting documentation and the consequences of failing to provide documentation.
§ 668.61 Recovery of funds.
