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Biden administration signals it may end waiver limiting audits of students applying for financial aid

Richard Cordray, now head of the Education Department’s Federal Student Aid office, shown in 2018. (John Minchillo/AP)
correction

An earlier version of this article incorrectly said that the Education Department would end a rule temporarily relaxing audits of some students' financial aid forms. The agency said it is still reviewing the issue. The story has been corrected.

Weeks after relaxing its audit of college students relying on federal grants and loans to pay for this academic year, the Education Department signaled it could resume the process for the following term.

The decision could result in more students from low-income households being asked to provide further proof that the information on their 2022-2023 Free Application for Federal Student Aid, or FAFSA, is accurate. The audit, known as verification, is widely criticized as being an invasive, time-consuming and unnecessary hurdle for some of higher education’s most vulnerable populations.

As communities on the margins continued to feel the financial sting of the coronavirus, Richard Cordray, head of the Education Department’s Federal Student Aid office, said in July the agency would narrow the parameters of the audit for the 2021-2022 FAFSA cycle. Although the economy is climbing out of the hole, higher-education experts say the impact of the pandemic is far from over, as evidenced by tepid enrollment at community colleges and low FAFSA completion rates.

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

“All of the reasons the department cited for offering these waivers previously will continue to exist this next year,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators (NASFAA). “Adding back in this burdensome process … is going to make all of this that much more difficult.”

In a Federal Register notice published Tuesday, the department notified college financial aid offices of the various forms students would need to submit if selected for verification during the upcoming 2022-2023 cycle but did not mention whether the existing waiver would be extended.

The Education Department said it is still reviewing what adjustments, if any, will be made to verification for the upcoming FAFSA.

“We are aware that the temporary changes made to the verification process for the 2021-22 application cycle helped many students from low-income backgrounds access critical aid,” Education Department spokeswoman Kelly Leon said in a statement. “The Department is continuing to evaluate what changes may be made to the verification process for the 2022-23 award year and has not determined if the temporary changes made for this cycle will continue in future award years.”

Verification is supposed 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 resources. Financial aid applicants with the lowest incomes tend to face the highest hurdles because many are exempt from filing taxes. That prevents them from easily importing verified income data from the IRS onto their FAFSA form and requires more legwork to complete the audit.

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.

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

Higher-education experts say those same populations are still struggling to regain their footing, and they are urging the department to extend the waiver.

“Extending the current relief would help our advisers and school counselors spend more time on student support and postsecondary planning and less time on paperwork,” said Kim Cook, executive director of the nonprofit National College Attainment Network (NCAN). “This is especially important as we seek to build back from historic college enrollment drops of over 10 percent for students from low-income backgrounds.”

Nearly a quarter of the roughly 18 million students who filed the FAFSA were selected for the audit in the 2019-2020 cycle. An NCAN analysis of federal data concluded that high audit rates are an inefficient way to root out wasteful spending. The organization found that when the Education Department selected fewer students in the 2019-2020 FAFSA cycle, it actually prevented more improper payments than in the prior cycle.

Biden administration extends pause on federal student loan payments through January

Tuesday’s notice arrives weeks after the Biden administration extended the pause on student loan payments through January. The NASFAA’s Draeger questioned why the administration is willing to extend relief to people who have gone through school but potentially not those who are still trying to pursue higher education.

“How do you extend the repayment pause for another six months because of the pandemic but you don’t extend these upfront waivers?” Draeger said. “There is a disjointed policy rollout here.”

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