Resolving Conflicting Information (Updated July 24, 2024) (2024)

Posted Date

June 17, 2024

Author

Federal Student Aid

Electronic Announcement ID

GENERAL-24-71

Subject

Resolving Conflicting Information (Updated July 24, 2024)

Note

Update on July 24, 2024:The Department is revising the instructions with additional steps for resolving conflicting information when an applicant or contributor who had FTI data reported on the ISIR also manually indicated that they did not file a U.S. tax return in 2022. Each of these steps—including collecting appropriate documentation—must be completed prior to submitting a correction to the FAFSA Processing System (FPS) for the system to allow the changes.

Conflicting Information Defined

In order to meet the standards for administrative capability at § 34 CFR 668.16(f), a school must have an adequate internal system to identify conflicting information that would affect a student’s eligibility. An institution is required to resolve conflicting information regardless of the source or whether the student is selected for verification. Common examples of conflicting information include questions on the status of a student’s high school diploma, academic progress, enrollment, and tax filing status. It can also arise from other offices such as admissions, the registrar, or academic affairs. If your school has conflicting information concerning a student’s eligibility or you have any reason to believe the student’s application information is incorrect, you must resolve the discrepancies before disbursing Title IV funds. If you discover discrepancies after disbursing Title IV funds, you must still reconcile the conflicting information and take appropriate action under the specific program requirements. Depending on the outcome, funds may have to be returned.

Though the requirements surrounding a school’s requirement to resolve conflicting information have not changed, the U.S. Department of Education (the Department) acknowledges the unique circ*mstances institutions are facing for the 2024-25 FAFSA processing year and announced in Electronic Announcement (GENERAL-24-11) that it would be significantly reducing verification requirements, while continuing key measures focused on avoiding identity fraud. The Department reminds institutions that they have the authority to select any Institutional Student Information Record (ISIR) for verification if they suspect incorrect information or to resolve conflicting information.

Not Considered Conflicting Information for 2024-25

As announced in Electronic Announcement (GENERAL-24-29), the Department identified data issues that resulted from data received from the IRS via the FUTURE Act Direct Data Exchange (FA-DDX) that impacted a subset of FAFSA forms. The Department has also previously noted ISIRs that were impacted by calculation errors within the FAFSA Processing System (FPS). The following issues do not create conflicting information for the 2024-25 award year:

Data for education tax credits transferred via the FA-DDX prior to March 30, 2024. The Department reprocessed impacted records and the IRS updated the FA-DDX to include the correct data on applications moving forward.
Discrepancies with amended and updated tax return data transferred via the FA-DDX. In cases when taxpayer information was updated through an amended tax return or other adjustment, the FA-DDX transferred the most recent AGI and filing status and the original values for other tax return elements. The Department reprocessed all impacted records. The IRS also updated the FA-DDX to transfer original tax data only, which means the FA-DDX will not include amended or updated tax data. Further, ISIRs will not include an indicator that amended or updated tax data is available.
In general, while institutions are not required to determine whether taxpayer information on the FAFSA form was amended before awarding or disbursing Title IV funds, institutions that become aware that amended tax information exists for a student or their contributors should treat those circ*mstances as conflicting information that must be reviewed and resolved.
Issues resulting from discrepant instructions on the FAFSA form for individuals required to manually provide income and tax information. Specifically, the FAFSA instructions (both on the paper or PDF FAFSA, and on the online FAFSA form) directed applicants to report IRS Form 1040, line 22 minus Schedule 2: line 2 for income taxes paid. These instructions removed the refundable credit for coverage under a qualified health plan under section 36B of the IRS Code from income taxes paid. However, the data transferred via the FA-DDX is drawn from IRS Form 1040, line 24. Similarly, the FAFSA instructions directed applicants to report IRS Form 1040, Schedule 3: line 3 for education credits. However, the FA-DDX is providing data from IRS Form 8863, line 8 plus line 19. In Electronic Announcement (GENERAL-24-29), which discussed this issue, the Department indicated that we would amend the FAFSA instructions to align with the data definition used by the FA-DDX. We have determined that this correction to the instructions will not occur until the 25-26 FAFSA cycle. However, applicants (or their contributors) who are directed to manually enter income taxes paid and education credits into the online FAFSA form or who completed a PDF FAFSA form and used the provided instructions on the 24-25 FAFSA form are not considered to have reported incorrect or conflicting information.
Known issues resulting from calculation errors with the FAFSA Processing System (FPS). The Department has announced and will continue to communicate about—as applicable—known issues that impact records due to calculation errors. These known issues are not considered conflicting information and have been identified by the Department for reprocessing, as appropriate. A complete list of known issues, their status, and their assigned reprocessing reason code are detailed in the Technical Frequently Asked Questions and Known Issues document. Additionally, Electronic Announcement (GENERAL-24-39) provides further guidance for how institutions may use professional judgment (PJ) on a case-by-case basis to decide whether to proceed with the current ISIRs for packaging aid awards when the record is subject to reprocessing by the Department due to a known FPS processing error and the original ISIR results in greater financial aid eligibility for the student. Differences in student aid eligibility that result from the PJ flexibilities afforded institutions with respect to these specific reprocessed transactions are also not considered conflicting information.

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Federal Tax Information (FTI) and Manual Input on Same ISIR

The Department has received questions from schools regarding instances when FTI and manually entered tax and income information is present on the same ISIR, but the manually entered information was used instead of the FTI to calculate the student’s SAI. To clarify, there are circ*mstances where this occurrence is not conflicting information, and other circ*mstances where it may be.

Marital Status

There are certain circ*mstances in which manually entered tax and income information and FTI may be present on the same ISIR based on the student’s or contributor’s marital status, including in the following scenarios:

Parental marital status is “divorced” but the FTI has a tax filing status of “married filing jointly” (MFJ). The ISIR would have the FTI from the IRS and the self-reported tax and income data. The use of self-reported data is correct and should be used for the SAI calculation and Pell eligibility.
Student marital status is “married” and filed with current spouse is "no,” but FTI has a tax filing status of “MFJ.” The ISIR would have the FTI from the IRS and the self-reported tax and income data. The use of self-reported data is correct and should be used for the SAI calculation and Pell eligibility.

In the circ*mstances described above, the manually entered information is not conflicting information.

Non-filers with FTI

There are instances where FTI indicates that a student is a “non-filer,” but the student indicates they have foreign income. In these circ*mstances, the ISIR would have the IRS Response code of 214 (did not file) along with self-reported tax and income data.

However, some schools have observed situations where it appears that an applicant or contributor who had FTI data reported on the ISIR also manually indicated that they did not file a U.S. tax return in 2022, resulting in a SAI and Pell Grant calculation based on the manually entered non-filing status. The FAFSA Processing System (FPS) does not use the FTI in the SAI and Pell eligibility calculations for students that incorrectly indicated “did not file” when FTI is transferred. If this occurs and the data indicates that the person is a U.S. tax filer, but the appropriate FTI was not used in the SAI calculation, schools should consider these cases as conflicting information that must be resolved.

When resolving the conflicting information, a school must confirm the student’s or contributor’s tax information by requesting documentation from the student or applicable contributor. Appropriate documents to collect include either IRS tax transcripts or signed copies of the 2022 income tax return and applicable schedules. The school must use the collected documentation to correct the conflicting financial information and submit it as a correction to the FPS. Schools must update all the manual entry data fields associated with financial and tax information (e.g., tax filing status, AGI, foreign income exclusion, and earned income credit). While the action is not a professional judgment (PJ), the school must also set the PJ flag to force the FPS to use the manually entered financial and tax information in the SAI calculation. Changing the tax filing status from “did not file” to “filed” is not enough to trigger FPS to use the FTI in the student’s calculations.

More information on the requirements around resolving conflicting information are outlined in Chapter 5 of the Application and Verification Guide in the Federal Student Aid Handbook.

Taxable Grants and Scholarships

The Department’s has also received questions about scenarios when the amount of taxable grants and scholarships manually reported by an individual on the FAFSA form is equal to their AGI. Similar to manually entered income information, there are circ*mstances where this occurrence is not conflicting information, and other circ*mstances where it may be depending on other information in the institution’s possession. Although it is uncommon, it is possible for a student, or their contributor, to have grants, scholarships, or AmeriCorps benefits as their only sources of taxable income. While schools are not required to select FAFSA records for verification that report a large amount of taxable grants and scholarships, schools must take action to review and correct the amount if they receive conflicting information that indicates it may be incorrect.

Get Help

For technical issues related to ISIR processing:

For support with your SAIG agreement and mailbox, or for help with technical issues related to ISIR processing, the FAFSA Partner Portal (FPP), or EDExpress, please contact the FPS Help Desk (formerly CPS/SAIG Technical Support) at 1-800-330-5947 or by email at support@fps.ed.gov.
For general questions related to 2024-25 FAFSA processing, we welcome our partners to continue using the Contact Customer Support form in FSA’s Partner Connect Help Center. To submit a question, please enter your name, email address, topic, and question. When submitting a question, please select the topic “2024–25 FAFSA.”

To request assistance with financial aid management systems configuration or processing applications:

For schools that need direct technical assistance related to processing applications and packaging aid award offers, please continue submitting your requests to the College Support Concierge mailbox CollegeSupportStrategy-FAFSA@ed.gov.

Last Modified: 07/24/2024