It’s FAFSA season again for high school seniors, others aspiring to postsecondary education, and current college students. A completed Free Application for Federal Student Aid (FAFSA) is the necessary ticket that makes college possible for millions of
students by granting them access to financial aid.
While the often-tricky FAFSA filing process gets much attention, the follow-up procedure called verification can be even more burdensome – for both students and financial aid administrators. Today, college access practitioners and financial aid administrators
are joining together to recommend solutions to ease the process for all involved.
In a new report – “The Burden of Proof: Impact of and Solutions for FAFSA Verification” – the National Association of Student Financial Aid Administrators (NASFAA) joins NCAN to recommend solutions
for addressing the burden students and aid offices experience due to the FAFSA verification process.
These recommendations for continual reduction and better targeting of those selected for verification come at a time when FAFSA filing and the related verification process are going through a host of changes. The Office of Federal Student Aid (FSA), which
manages the FAFSA and federal aid programs, suspended verification for the 2021-22 award year but not for the 2022-23 FAFSA, which opened Oct 1. Further, these recommendations coincide with improvements from FSA to better target who is selected. The
recommendations are:
Recommendation No. 1
The Department of Education should better leverage existing federal data. This can be achieved through the implementation of the FUTURE Act and FAFSA Simplification Act, which allow direct IRS-to-ED sharing of data for all FAFSA filers,
including using the transfer to confirm non-filer status in lieu of requiring a non-filing statement.
The department should also adjust the IRS Data Retrieval Tool to verify non- tax-filing status for the 2023-24 award year, given the lengthy implementation timeline for the new laws.
Recommendation No. 2
The Department of Education should modify the verification selection algorithms to target FAFSA filers with likely expected family contribution (EFC) changes and exclude filers who:
Transferred information directly from the IRS, or
Successfully completed the verification process in the previous year with no significant change to their EFC, remain continuously enrolled, and their EFC in the subsequent year does not change significantly.
Verification has recently come under scrutiny for its questionable value to the taxpayer and the burden it places on students and institutions. Concerns include:
Is the burden worth the impact on financial aid offices when 1 in 5 financial aid administrators spend at least half their time on the verification process?
In recent years, the portion of FAFSA filers selected by FSA to complete this audit-like process was as high as 38%. However, advancements in the process have allowed for improvements to greatly reduce this rate. For the 2019-20 filing cycle, FSA switched
to a new machine learning approach to determine the students who would be selected for verification. This change yielded better results in that fewer students were selected and a larger dollar proportion of aid payments was corrected. This allowed
FSA to set a goal to continually decrease the portion of FAFSA filers selected for verification.
FSA's stated goal for the 2021-22 academic year is to select 18% of FAFSA filers. Through the first three quarters of the cycle, FSA is surpassing that goal, having selected just over 17% of filers. (Data in the table below were provided to NCAN from
FSA for this report.)
FSA’s efforts to decrease the percentage of students selected for verification are a step in the right direction, and the recommendations in “The Burden of Proof” report provide a blueprint for building upon that success.
The forthcoming implementation of the FUTURE Act and FAFSA Simplification Act must include a thoughtful approach to verification that does not require students to prove that information transferred from the IRS is indeed accurate. Given that the implementation
of these laws is still two FAFSA cycles away, NCAN and NASFAA additionally recommend that FSA and the IRS work to provide verification of non-filing via the IRS Data Retrieval Tool, as one group of students most burdened by verification are students
whose families do not file taxes.
Additionally, the Department of Education should continue to adjust its selection algorithms to target the FAFSA filers who are most likely to have a change in their financial aid award. One way to lessen the burden is to exclude filers with information
directly transferred from the IRS, students who successfully completed the verification process previously and do not see a significant change in their EFC, and students who qualify for the automatic zero-dollar EFC when completing the FAFSA.
As college continues to become increasingly unaffordable for more and more of today’s students, it is paramount that students have access to the financial aid for which they are eligible. Targeting fewer students for verification and having students complete
verification fewer times throughout their postsecondary career will provide much-needed relief. It will also allow financial aid administrators to spend their time serving students who need assistance instead of working through mountains of
verification forms.
For an in-depth look at college access practitioners’ and financial aid advisers’ experiences with and recommendations regarding FAFSA verification, download our full report: “The Burden of Proof: Impact of and Solutions for FAFSA Verification.”
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