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Education Dept. extends waiver limiting audits of financial aid forms

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The Biden administration said Wednesday the Education Department will continue to temporarily relax its audit of students who apply for federal grants and loans, with the impact of the coronavirus pandemic still rippling throughout higher education.

The decision means fewer students from low-income households will be asked this year to submit documents to prove the accuracy of information on their 2022-2023 Free Application for Federal Student Aid, or FAFSA. Instead the department will continue to focus its audit process, known as verification, on rooting out identity theft and fraud.

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

It’s been nearly a year since the Education Department first relaxed its audit of students seeking federal financial aid during the pandemic. Higher-education advocates grew concerned that the department would reverse course as months went by without word of an extension. They said ending the temporary waiver would exacerbate already low FAFSA completion rates and depressed enrollment at colleges that serve high proportions of low-income students.

“We laud the Department of Education for providing this sweeping relief to students and schools when they need it most,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “Verification disproportionately impacts low-income students, the very same population that is most impacted by today’s economic turbulence.”

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

Verification is supposed to maintain the integrity of the $120 billion federal financial aid system, but it is widely criticized as an invasive, time-consuming and unnecessary hurdle for some of the most vulnerable populations.

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 IRS onto their FAFSA form and requires more legwork to complete the audit.

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

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

“As the covid pandemic continues to create challenges for prospective and current college students, we must do all we can to reduce barriers to college access,” Kim Cook, executive director of NCAN, said Wednesday, praising the department for continuing the waiver.

As of the end of March, FAFSA applications for the 2022-2023 cycle were down 8.9 percent year-over-year, according to NCAN, which tracks filings. What’s more, FAFSA renewals from currently enrolled college students declined 12.3 percent and renewals from Pell-eligible students dropped by 15.6 percent. Cook said she hopes to see these trends reverse in the wake of the verification waiver.

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