How FAFSA Verification Deters Low-Income Students from College

May 3, 2018

By Jack Porter, Advocacy Associate

Estuardo did everything right in completing the FAFSA to receive the financial aid he needs to attend college. But now that he is tied up in the pervasive and problematic post-filing verification process – one that requires students to further demonstrate their household status by providing additional documentation such as tax transcripts – whether he gets his award is an open question.

“It wouldn’t be possible to enroll without the financial aid,” the would-be college freshman, pictured at left, told NCAN from his Los Angeles home.

Throughout the past several years, highly influential policymakers have come to a bipartisan consensus that something must be done to ensure that prospective college students have an easier time accessing financial aid for which they are qualified. An inherent barrier within the FAFSA process is that of verification, which has been proven to deter students from receiving financial aid. NCAN staff members were fortunate to recently speak about these issues with Bill Gates and other leaders advocating for a simpler FAFSA.

What is perhaps most disheartening about the issue of “verification melt” is that it disproportionately affects low-income students.

Consider this: Approximately one-third of all FAFSA completers are selected for verification, but astoundingly, about 98 percent of those flagged come from a low-income household. Moreover, the data show that half of all Pell-eligible filers are picked. So not only do underrepresented students comprise virtually the entire verification pool, but one in two low-income students is affected.

The impact of the verification process on low-income students is illustrated by the stark discrepancy in Pell Grant receipt rates between those selected for verification and those who are not. These grants are all but essential for low-income students’ college completion. Yet an NCAN analysis of U.S. Education Department data show that in award year 2015-16, just 56 percent of Pell-eligible students who were selected for verification went on to receive a Pell Grant, while 78 percent of eligible students who were not selected got one.

All of this is especially alarming considering that data for a previous verification group show that 95 percent of aid packages are not altered as a result of verification, calling into question the validity of the process, which is meant to identify incorrect or falsified applications.

As additional evidence surfaces depicting the difference in Pell-receipt rates between those selected for verification and those who are not, it is clear that policymakers must not only take a good, hard look at what justifies asking students and families to endure what is essentially a second round of FAFSA completion. They should also consider policy changes such as expanding the IRS Data Retrieval Tool and promoting inter-agency data sharing to reduce this unnecessary burden.

Common verification tasks that may discourage students from clearing this additional hurdle include turning over tax transcripts, completing a dependent verification worksheet, or demonstrating current investments and assets available to the student or family. However, because institutions write their own verification rules, and filers can be required to go through verification for each institution to which they apply, students in unique situations can be subject to a particularly cumbersome procedure.

That’s what happened to Estuardo, who moved by himself to the United States from Guatemala in 2013, and is set to graduate from high school this year. The verification process at a large public university in California has left him uncertain as to whether he will receive a financial aid award.

This common situation is especially challenging for Estuardo, as his desire to enroll at that institution largely stems from a need to remain in L.A. and keep his current job to support himself as well as his family back home.

Just a few weeks ago, Estuardo received a notice from the university’s financial aid office stating that he must produce his family’s tax transcript in order to receive financial aid. But because his parents do not live in the United States, and therefore do not file for taxes in the United States, Estuardo has had to jump through several hoops to prove that this is indeed the case and have his financial situation verified.

“It was going to be too expensive and time-consuming for me to send the documents by ground transportation, and my parents would have had to travel into the city to send them back to me,” he said. “I had to have my sister go into Guatemala City – because my family does not have internet access at home – to create an email account and send back photos of the signed document stating my parents do not file taxes in the United States.”

The entire process has been not just unwieldy, but very worrisome and potentially devastating for Estuardo. He was ultimately forced to commit to the university without confirmation that he will receive financial aid, a scenario that more than one-third of financial aid administrators acknowledge “almost always” or “often” happens to students selected for verification. And one-half say verification “almost always, often or sometimes” results in them being unable to enroll on time.

“I got so frustrated because the deadline was coming up so soon,” he said. “It made me so nervous I wouldn’t get to enroll.”

Any forthcoming attempt to simplify the FAFSA must also address the verification issue to ensure students like Estuardo get the financial aid they depend on to access and succeed in college.

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