Blog Post | August 5, 2010

The Unintended Consequences of Verification

After_the_FAFSA Last week, we released After the FAFSA: How Red Tape Can Prevent Eligible Students from Receiving Financial Aid. While past reports have discussed ways that the Free Application for Federal Student Aid (FAFSA) can be simplified and improved, After the FAFSA looks at how the complicated process after students submit their application can keep them from getting grants for which they would otherwise qualify. Analyzing the data of 13 participating California community colleges, we found that one out of three likely Pell Grant-eligible applicants didn’t receive a grant. The 13 colleges together spent between $1.7 and $2.5 million attempting to verify student information, yet very few verified applicants became ineligible for Pell Grants.

The colleges we studied are in California, but this is a national issue at all types of schools. Since releasing the report, we’ve heard from others outside California with similar concerns about this issue. One college even disclosed an internal report they did on verification at their school, which they agreed to let us share, stripped of identifying information. As we documented in After the FAFSA, this college also found that the vast majority of its verification activity had relatively little effect on student aid eligibility.

Both reports raise important questions about the federal aid application process, including the unintended consequences of federal verification regulations and the way schools implement them. We cited both reports in our recent comments to the Department about its proposed new verification regulations, which could increase administrative burdens for some colleges and students without necessarily improving safeguards for taxpayers. Instead, the Department could reduce both application errors and student obstacles by enabling all applicants to transfer their IRS information (data from 1040 tax forms, or W2 forms for those with very low incomes who do not have to file) directly to their FAFSA.

Read After the FAFSA