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Fewer college students will have to verify financial aid information this school year, Education Dept. says

Officials say changes to FAFSA verification could help 200,000 students applying for aid

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Fewer college students from low-income households will be asked this year to provide further proof that the information on their financial aid application is accurate, the Education Department said Tuesday.

With the financial impact of the pandemic still rippling through communities, the agency is temporarily relaxing its audit of students who rely on federal grants and loans to pay for school. The department will focus the audit, known as verification, on ferreting out identity theft and fraud for the 2021-2022 Free Application for Federal Student Aid, or FAFSA, cycle.

The decision will help the millions of students whose FAFSA applications are being processed for the upcoming school year as well as those who had been selected for verification but have not yet completed the audit, according to the department.

Verification is intended to maintain the integrity of the $120 billion federal financial aid system, especially the billions of dollars in Pell grants provided to students with limited means. But the process is widely criticized as being an invasive, time-consuming and unnecessary hurdle for some of higher education’s most vulnerable populations.

To protect taxpayer dollars, the Education Dept. is disproportionately auditing Black and Latino college students

A Washington Post analysis of federal data this year found that the Education Department has disproportionately audited students from majority Black and Latino neighborhoods for at least the past decade. Those same populations are at the center of the steep declines in college enrollment since the pandemic, particularly at community colleges.

After a spring semester in which the National Student Clearinghouse tracked an enrollment decline of 603,000 students, or 3.5 percent, the Education Department says it is trying to stem the tide. The department estimates that narrowing the parameters for verification can help about 200,000 more students from low-income households and students of color.

“This has been an exceptionally tough year,” Richard Cordray, head of the Education Department’s Federal Student Aid office, said Tuesday. “We need to ensure students have the most straightforward path to acquiring the financial aid they need to enroll in college and continue their path to a degree."

Nearly a quarter of the roughly 18 million students who filed the FAFSA were selected for verification in the 2019-2020 cycle. Comparatively, less than half a percent of all returns last year were subject to an audit by the Internal Revenue Service.

Colleges puzzled by surge in FAFSA verification requests

A National College Attainment Network analysis of federal data found that when the Education Department selected fewer students in the 2019-20 FAFSA cycle, it actually prevented more improper payments than the prior cycle. This suggests high audit rates were inefficient.

The Education Department routinely reconfigures the verification model to reduce risks to taxpayers and students, lowering the percentage of people flagged from a high of 38 percent in the 2011-2012 FAFSA cycle to 22 percent in the last two rounds.

In December, the agency said it would audit no more than 18 percent of FAFSA filers because the costs exceed the benefits when more people are selected. Financial aid officials and student advocates have pressed for even lower targets.

While the latest verification changes are temporary, advocates say it is a step in the right direction.

“This cycle’s changes are more important than ever in these times of exacerbated inequities from the pandemic,” said Kim Cook, executive director of the nonprofit National College Attainment Network. “This relief also helps our advisers and school counselors to better focus their time on outreach and support to students to stay on track for their postsecondary goals.”

Students must comply with a verification request or lose access to grants, scholarships and loans. The more complex their financial situation, the more documents they must submit and the longer the verification may take.

Financial aid applicants with the lowest incomes tend to face the highest hurdles. At least 20 percent of Pell-eligible applicants are exempt from filing taxes because of their low-income levels, according to the Education Department. That prevents them from easily importing verified income data from the Internal Revenue Service onto their FAFSA form and requires more legwork to complete the audit.

Because of the challenges some students face acquiring required documents, some never complete verification and fail to receive the money needed for school, according to the Education Department.

Cordray said the department will continue to evaluate longer-term improvements to the verification process to make the audit more equitable while still preventing fraud.

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