Federal Student Aid has provided a series of important verification updates for the 2025-26 academic year that affect victims of IRS tax-related identity theft and students who are confined or incarcerated. This Dear Colleague Letter also outlines where administrators can find language that the Department recommends for conversations about verification; this information and more is detailed in the Federal Register notice from September 4. Below is a breakdown of the information:
2025-26 Processing Reminders
- The verification completion process for the 2025–2026 award year will largely be unchanged
- The direct data exchange (FA-DDX) between the U.S. Department of Education and the Internal Revenue Service (IRS) will continue to import most U.S income and tax information to the FAFSA
- The federal tax information (FTI) that is transferred via the FA-DDX to the FAFSA form is considered verified for Title IV purposes
- Institutions are not required to collect a Tax Return Transcript or a signed copy of the 2023 income tax return if FTI was successfully transferred
Requirements for Victims of IRS Tax-related Identity Theft
- Tax Return DataBase View (TRDBV) transcripts are taking over a year to process
- Due to the long processing time, victims of IRS tax-related identity theft are required to provide a copy of their signed 2023 income tax return and applicable schedules.
- Individuals must also provide an IRS 4674C letter (a letter from the IRS acknowledging the identity theft) or a statement signed and dated by the tax filer indicating that they were a victim of IRS tax-related identity theft, and the IRS is aware of it.
Confined or Incarcerated Student Reminders
- For students who are confined or incarcerated, the same verification requirements for the 2024–2025 award year will apply for the 2025–2026 award year.
- A confined or incarcerated student (as indicated through the incarcerated applicant flag) will only be required to verify their identity and sign the statement of educational purpose when they are selected for Verification Tracking Group V4 or V5.
- Acceptable documentation of identity includes official IDs issued by the correctional facility. In addition, institutions are not required to verify a confined or incarcerated student selected under Verification Tracking Group V1.
- If a confined or incarcerated student is unable to submit a signed and notarized Statement of Educational Purpose, a school may accept a signed statement from an authorized official who works for the correctional facility or the oversight entity confirming to the school that the individual who completed the FAFSA form and was selected for verification is the person signing the Statement of Educational Purpose.
Suggested Verification Text
The Department of Education provided the following guidance on what language they recommend when discussing verification:
“In APPENDIX A, we provide the suggested text for each of the 2025–2026 verification items in the September 4, 2024, Federal Register notice. While use of the suggested text fulfills the regulatory verification requirements, institutions are not required to use the Department’s suggested text and formats, except as noted below. Instead, institutions may develop and use their own text, forms, documents, statements, and certifications that are specific to the items required to be verified for a particular student or group of students. The one exception is that institutions must use the exact language in the “Statement of Educational Purpose” in APPENDIX A for students who are placed in Verification Tracking Group V4 or V5.
Note that for the 2025–2026 award year, we have moved the educational purpose statements to the end of the appendix since they must be used verbatim and are separate documents with their own certification and signature. The signature pages for the other verification documents are now on pages 9 and 10, directly following the documents for non-tax filers and family size.
We suggest that each page of an institutionally developed verification document include appropriate headings and numbering that identify the item(s) being verified. Institutions should ensure that the verification document collects the student’s name, ID number, and other identifying information as determined by the institution so that each page is identified as belonging to that student. Also, because institutions may on occasion have difficulty matching tax return documentation with a particular student if, for example, the last names are different or if portions of the tax filer’s identifiers are redacted, we recommend that institutions advise students to write their own name on tax documents (when those are required) prior to submitting them to the institution. Verification documents should include any necessary special instructions so that students will know when and how documents are to be submitted to the institution. Institutions are reminded that documentation obtained as part of the verification process must be maintained at the institution for at least the required Title IV record retention period as outlined in Volume 2 of the Federal Student Aid Handbook.
We thank institutions for their cooperation and continued role in safeguarding the integrity of the Title IV programs and in preventing improper payments.”
More information about what an institution and an applicant may be required to verify, as well as the acceptable documentation for verifying FAFSA can be found here.
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