Study: Financial Aid Verification Poses Heightened Barriers to College Access

By Hugh T. Ferguson, NASFAA Staff Reporter

A new state-based study found that students selected for financial aid verification were 4.9% less likely to enroll in college than those not flagged for the review — and that the impact was particularly acute for underserved student populations.

The report, based on data collected from recent high school graduates in Tennessee, aims to provide documentation of the disparate impacts of verification and offer estimates on the college enrollment decisions of students selected for verification.

“We acknowledge that verification serves an important role in protecting taxpayers’ investment in higher education, but we believe our findings provide convincing evidence that selection for verification is associated with worse enrollment outcomes for students and is more harmful for some students than others,” the authors wrote.

If a student is not selected for verification, they decide whether to enroll based on their financial aid offer, among other factors. But those students selected for verification, which the Department of Education (ED) uses to corroborate an individual's financial aid eligibility, can be dogged with an exhaustive process in order to receive an aid offer that will impact their enrollment decisions.

NASFAA has repeatedly called for the need to improve the verification process. While it is necessary to maintain the integrity of federal aid programs, the process as it currently stands imposes significant burdens on students and aid administrators — and largely does not significantly alter financial aid offers. In a 2018 limited survey of 45 institutions, NASFAA found, for example, that on average, 84% of verified applications resulted in either no change to the student’s expected family contribution (EFC) or a change so small that it did not result in a change to the student’s Pell Grant award.

The process is further complicated for some students because requirements to receive state-based aid differ on the state level.

In Tennessee, eligibility depends on the aid program and the institution’s financial aid policy. According to the report, “in order to receive aid from any program with a need-based eligibility criterion, students must complete verification. For programs without a need-based eligibility criterion, institutions have the authority to set their own policy about whether these students must be verified to receive state financial aid.”

The report — authored by Jason Lee of the State Higher Education Executive Officers Association (SHEEO), Madison Dell of Stanford University, Manuel González Canché of University of Pennsylvania, Alex Monday of University of Georgia, and Amanda Klafehn of the Tennessee Higher Education Commission — uses this qualitative framework of the enrollment process to comprehensively assess the effect verification may have on postsecondary enrollment for recent public high school graduates in Tennessee.

The report pulls from a population-level, multiyear data set of Tennessee public high school graduates who filed the FAFSA and took the ACT exam at least once.

In tabulating the likelihood for a student to enroll in a postsecondary program based on verification, the report found that those students who filed the FAFSA later than their peers and were selected for verification were even less likely to enroll in college. According to the study, students who filed the FAFSA within the first month it was available and were subsequently selected for verification were 3.1% less likely to enroll in college, compared with those who filed the FAFSA more than three months after it was made available, who were 10.8% less likely to enroll.

Tennessee requires students to complete the FAFSA to be eligible for state financial aid and the study urges — based on findings that earlier submissions yield positive enrollment results — that policymakers in states developing mandatory FAFSA submission policies consider having early deadlines for students to complete their application.

The study, the authors wrote, “lends credence to the notion that the timing of FAFSA filing is a strong signal of college matriculation.” 

“Unfortunately, our results suggest that the verification process is a much more significant hurdle for those students who file later, arguably due to the reduced time to meet the paperwork requirements,” the paper said. “The difference in the magnitude of the effect of selection for verification on college enrollment suggests that institutions and financial aid staff may want to strategically target resources toward late FAFSA filers to have the largest impact on college enrollment outcomes.”

These state-based findings come in the wake of a national report that found verification, over the course of the past decade, disproportionately targeted Black and Latino students.

“A decade’s worth of verification data by Zip code obtained through a freedom of information request shows that students in majority-Black and Latino neighborhoods are and continue to be targeted at a much higher rate than other communities per capita, despite the decrease in the number of students audited since 2010,” The Washington Post report found.

The newly published Tennessee study adds to the Post’s findings and demonstrated evidence that students selected for verification are slightly more likely to be female and much more likely to be Black or first-generation students.

“The additional burden verification places on students from less-privileged backgrounds, who typically have fewer resources to help them navigate the verification process and are less likely to enroll in college to begin with, will continue to fuel inequities in college access and affordability,” the paper said. “While access to college is only the first step toward attaining a credential, mitigating barriers by changing policies or targeting support toward those who need it most may enhance the enrollment prospects of thousands of students in Tennessee and potentially hundreds of thousands of students across the country.”


Publication Date: 2/16/2021

Kim J | 2/19/2021 9:21:02 AM

As a long time FAA, titles such as this are often along the lines of "gotcha", IMHO. Even before the DRT (and hopefully datasharing with the IRS, regardless of tax filing status, in the future), completing a verification worksheet, signing it, and providing copies of tax documents are not that difficult. Do we ask higher ed institutions to not require HS transcripts, GED's, etc., because it may affect those applying? Thus, there is likely much more to an individual not providing the required information, which is not unreasonable by any stretch of the imagination, than meets the eye. This may not be the most politically correct response, but it is one that is couched within 27 years of experience in financial aid ... as an FAA, a student completing the FAFSA, and a parent completing the FAFSA. I appreciate reading all of the comments.

Gwen H | 2/18/2021 4:11:27 PM

I agree with Armand R. Verification for those being honest is very simple and painless.

James C | 2/16/2021 2:36:13 PM

Why was the QA program ended? That data was supposed to help the Department determine what criteria should be used in verification selection. Anyone who used the DRT and has a "reasonable" household size given the marital status of parents, should not be selected.

James C | 2/16/2021 11:31:58 AM

It's hard to believe that 84% of verification completed in this limited study did not result in an EFC change. Makes me wonder if counselors are doing their verifications correctly.

Ben R | 2/16/2021 11:0:19 AM

This raises the question as to why program integrity is only important for the Pell grant. On the other extreme we have all the unsubsidized loans. The Parent Plus and graduate loans, which can be 4-5 times the size of a Pell grant (and are without limits in the case of Plus), require no income documentation at all, neither past, current or even anticipated earnings based on major and school.

Paul G | 2/16/2021 10:1:41 AM

Unfortunately, I don't find this study convincing at all. I'm sure verification is an obstacle for some students. However, a 4.9% impact isn't very significant. And, you cannot extrapolate a Tennessee study to the rest of the nation. I think we need to see the study itself and the methodology used to produce these results. I also think a broader study is needed. Last I heard, verification "melt" was somewhere around 25%. This study's results don't come close.

Armand R | 2/16/2021 9:50:36 AM

Apparently the authors of the report have too much time on their hands. Yes, verification is a burden, but if you want free government (taxpayer) money to help pay your overpriced college tuition, then prepare to prove that you need it! In almost all cases of verification I've seen, if you didn't cheat on your taxes, lie on your FAFSA, or steal somebody else's SSN, verification will be quick and easy.

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