As we prepare for the 2025-2026 FAFSA cycle, the U.S. Department of Education has issued important updates on verification requirements. Here’s what you need to know:
1. Tax and Income Verification:
- For students whose tax data is transferred directly from the IRS to the FAFSA using the Federal Student Aid Direct Data Exchange (FA-DDX), that information continues to be considered verified automatically. Institutions do not need to request tax return transcripts or signed copies of tax returns for these students for those specific data points.
- Identity Theft Cases: Students who are victims of IRS tax-related identity theft will now only need to provide a signed copy of their 2023 income tax return and its pertinent schedules, along with an IRS 4674C letter or a signed statement confirming their situation. Students no longer have to submit the Tax Return DataBase View transcript for these reviews to be completed.
2. Verification for Non-Tax Filers:
- Independent and Parent non-filers must submit a signed statement confirming that they weren’t required to file a 2023 tax return, along with documentation of their earnings (e.g., W-2 forms). They must also provide a verification of non-filing letter unless they are dependent students.
3. Family Size Verification:
- If family size data is transferred from the IRS to the FAFSA and remains unchanged, verification isn’t required. Moreover, if a student updates this information on their FAFSA manually, and that information matches what was transferred from the IRS, schools are no longer required to verify the family size. If that manually-entered information is different, however, students will need to provide a signed statement listing the names, relationship to student, and ages of their household members.
4. Incarcerated Students:
- Incarcerated students, if selected for Verification Tracking Groups V4 or V5, only need to verify their identity and provide a Statement of Educational Purpose. Documentation from correctional facilities, such as official IDs, are now being accepted.
5. Identity and Statement of Educational Purpose:
- For students selected for V4 or V5 verification groups, they must present an unexpired government-issued photo ID and sign the Statement of Educational Purpose. Institutions must retain an annotated copy of this ID and the signed statement.
Following this announcement, financial aid administrators can share a sigh of relief, as it confirms that the verification process remains largely unchanged from the previous year with a few updates that focus on simplifying the requirements for students whose tax information is transferred from the IRS and those facing difficult situations.
In order to make sure your institution remains compliant, however, please feel free to connect by emailing email@example.com. Our expert advisors can help you complete these reviews or train your new staff to ensure your office continues operating at the highest level of service and support that students need.