NASFAA Requests Reprieve and Review of VONF Requirements, Data in Letter to ED
NASFAA on Thursday urged the Department of Education (ED) to press pause on the “burdensome” Internal Revenue Service (IRS) Verification of Nonfiling (VONF) requirements for independent students and families that do not file a federal tax return, citing concerns that FAFSA filers are subjected to this requirement “based on inaccurate and incomplete data,” according to a letter sent to ED officials
The request was made in a letter from NASFAA President Justin Draeger that was sent to Acting Undersecretary of Education James Manning, Federal Student Aid’s newly appointed Chief Operating Officer A. Wayne Johnson, and Senior Advisor to the Assistant Secretary and Acting Assistant Secretary Kathleen Smith.
The VONF requirement was introduced by ED in the 2017-18 award year after IRS data showed that 14.46 percent of parents and 16.51 percent of students who indicated on the FAFSA that they did not file a federal tax return had, in fact, done so. ED in April waived the VONF requirement
for dependent students for the 2018-19 award year after the IRS Data Retrieval Tool (DRT) was suspended following a security breach this past spring.
However, the requirement is still in place for independent students and parents of dependent students who are nonfilers, even though the data from the IRS is likely “inaccurate and incomplete” because of the award year in which it was collected and the switch to prior-prior year (PPY), according to the letter from NASFAA.
The data used by the IRS was collected from award year 2014-15, when FAFSA applicants were filing using prior year tax data and completing their application before the April 15 IRS tax filing deadline. In many instances, tax filers who did not plan on filing their taxes reported as such, and when they did file later, they failed to update the FAFSA. Since the 2017-18 award year and the switch to PPY, families have been given an extra six months between the start of the FAFSA cycle and the IRS tax filing deadline, which means that the filing status error rate starting in 2017-18 “will likely be lower due to this timing change,” according to NASFAA’s letter.
Moreover, most VONF corrections result in no change to an applicant’s EFC or Pell Grant eligibility, according to reports from several NASFAA member institutions. ED and IRS report that an average of about 15 percent of previous nonfilers did actually file. But a sampling of NASFAA institutions showed an average percentage change of just 4.6 percent.
“Put another way, it appears that a large number of many applicants are being made to go through a difficult verification process that results in very few changes to aid eligibility,” Drager wrote in the letter.
To address this issue, NASFAA is requesting “a reprieve and suspension” of the VONF requirements “and ask[ing] that this relief remain in effect until additional data and a cost-benefit analysis can be conducted to determine the utility of the VONF requirement,” Draeger wrote in the letter.
Specifically, NASFAA is requesting that ED:
- Suspend the VONF requirement for all applicant types while ED fully evaluates the data with the aid community;
- Compare 2017-18 FAFSA applicants who indicated they were nonfilers against 2015 IRS tax filing records, and make that information public;
- Use ED’s own data to determine the EFC and aid eligibility impact for self-reported nonfilers who were corrected to filers upon verification, and make that information public;
- Calculate and make public the percentage breakdown, by dependency status, of FAFSA self-reported nonfilers who were corrected through the verification process to filers;
- Revisit the VONF requirement with correct and complete data, and permanently remove the requirement if the data does not support its existence; and
- If the data ultimately support the VONF collection, continue to work with stakeholders to find a secure solution that is automated for applicants.
“NASFAA supports effective initiatives to ensure federal student aid dollars are properly spent. However, those initiatives must have a basis in sound data to justify the burden for applicants and institutions,” Draeger writes in the letter. “ED’s practice of waiting until the end of an application cycle to review verification documentation requirements amplifies the impact of ineffective requirements, leaving them in place for several years until data is reviewed. Applicants should not have to suffer the consequences of poorly researched program integrity initiatives while ED conducts the data analysis that should have been conducted prior their adoption.”
Publication Date: 7/28/2017