Completing the FAFSA is one of the most important steps in the college-going process.
However, each year, about one third of all high school seniors who file the Free Application for Federal Student Aid — and 50% of low-income filers — are selected for verification, a federal audit of submitted FAFSAs. Students who are flagged for verification are not eligible to receive financial aid until they have successfully completed the verification process.
A National College Access Network (NCAN) analysis shows students are much more likely to get flagged if they are eligible for need-based aid. NCAN’s analysis further shows that low-income students selected for verification are about 25 percentage points less likely to receive a Pell Grant than those who don’t.
Dealing with FAFSA verification for the first time
Axel Soto, 19, became distressingly familiar with the process after being selected twice for verification by two different institutions during his first year of college.
“It was extremely stressful,” said Axel, who attended Tallahassee Community College (TCC) during fall 2018 before transferring to Florida State University (FSU) the following spring. “I was more nervous and worried than surprised when my account got flagged because I really felt the pressure to get the hold resolved on time to pay for my classes.”
Axel is a first-generation college student who was born in Bradenton, Florida and graduated from the city’s Braden River High School.
His path to college took a bit of a detour when he moved with his mother to her native Mexico for three years during middle school. Axel returned to Bradenton with an aunt in time to enroll at Braden River High School for 10th grade while his mother remained in Mexico.
The distance between Axel and his mother complicated matters the first time he was flagged for verification at TCC, where he was tasked with submitting a Dependent Student Verification Worksheet — which requires both a student and parent signature — and a tax form confirming his mother’s income. According to Axel, “When TCC placed a hold on my account, I had to wait about 2-3 weeks to get the forms back from Mexico after sending them.”
Axel said he was able to submit the necessary forms during orientation at TCC, about two weeks before the start of the fall semester.
“Even after I turned in what they asked for, I felt like they could always tell me, ‘This is in Spanish’ or ‘this is from another country, so we can’t read this,’” Axel said.
A few months later in November, Axel was selected for verification at FSU, which also required him to submit the Dependent Verification Worksheet and a tax form with his mother’s income. On top of that, Axel said FSU asked his mom to sign a Parent Non-Tax Filer’s Statement, a form for individuals who did not file and were not required to file a U.S. federal tax return during a given year.
“I was a lot more confident going through this process a second time,” Axel said. “Not having a parent to guide me through the process really caused a lot more stress than was needed.”
The impact of verification on low-income students
Although Axel was able to successfully navigate his two experiences with FAFSA verification, many students are not nearly as fortunate.
Overall, only 31% of low-income high school seniors enroll in a postsecondary institution using a Pell Grant, according to NCAN’s analysis. On top of that, navigating the verification process presents an extra barrier to low-income students.
During the 2016-17 FAFSA award year, only 56% of low-income students received a Pell Grant after being selected for verification and successfully completing the review process. In comparison, among low-income students not selected for verification, 81% ultimately receive a Pell Grant. The gap illustrates that students selected for verification are accessing financial aid at a much lower rate.
While approximately one third of all FAFSA filers are selected for verification each year, the National Association of Student Financial Aid Administrators has stated that it believes this threshold is higher than necessary, according to NCAN’s “FAFSA Verification: Good Government or Red Tape?” report.
The report notes that “compared to the IRS (Internal Revenue Service) audit rate for tax filers, students filing the FAFSA are selected for verification at a much higher rate” given that the IRS audits less than 1% of tax filers with an adjusted gross income of $1 to $500,000.
Additionally, the IRS only audits 2.5% of filers with no earnings, who may be filing to receive refundable tax credits and would likely be eligible for a Pell Grant. In fact, the highest IRS audit category is for individuals earning over $10 million annually, and that rate (14.5%) is still less than half of the FAFSA verification rate.
A helping hand for Hispanic students
While Axel had to sweat out verification twice in one year, he credits UnidosNow — a Manatee County-based nonprofit that seeks to elevate the quality of life of the growing Hispanic/Latino community through education, integration and civic engagement — for getting him on a college campus in the first place.
“I didn’t have any savings at all, so I knew I was going to need a lot help to get to college,” he said.
Axel first encountered UnidosNow during 10th grade, shortly after returning to Bradenton from Mexico. He was particularly intrigued by the UnidosNow Future Leaders Academy, a comprehensive college prep and career readiness program that primarily serves low-income, first-generation Hispanic/Latino students that includes a track for students interested in attending a four-year university.
Among the resources offered by UnidosNow is a guide on How to Fill out FAFSA. According to Axel, UnidosNow emphasized punctuality and preparedness in filling out a FAFSA.
“Unidos(Now) puts it in our minds…October 1, fill out the FAFSA because the later you fill it out, the less money you might get,” said Axel, referring to the earliest date each year that high school seniors can fill out FAFSA. “They also tell you to be prepared. If you think you might not need a piece of documentation, have it in hand anyway just in case.”