Amid the pandemic, the verification process for federal financial aid was waived, making the application process for college loans and grants a lot more simple. However, a recent article signaled that the Biden administration may end the verification relief.
Intelligent.com offered 2 experts whose opinions differed on the wavier:
- “Removing the current waiver will return student services to burdensome processes slowing down the delivery of critical services that help struggling students and families understand how to enroll and finance their education.” – Tom O’Hare, Education Consultant and Expert at Intelligent.com.
- “Many families don’t receive federal grants due to errors made on the form just as there are those receiving funds when they perhaps they shouldn’t have. Being selected for verification may seem scary but it really is not. If you don’t file taxes due to low income you simply provide a statement saying so. The rules make it simple. Waiving verification for low income families may have an unintended consequence of not receiving the aid they deserve.” -Denise Thomas, Financial Aid Expert and Expert at Intelligent.com.
I had a chance to interview both experts to learn more.
Tom O'Hare, College Planning Advisor and Expert at Intelligent.com.
Can you explain a little bit about the verification process for federal financial aid?
It is a process by which a post-secondary education institution (4-YR, 2-YR, and For-Profit) is required by the Fed to double-check the financial information provided by family members who have completed and filed the Free Application for Student Aid (FAFSA). A school can elect to do 100% verification or to 30% random fillers selected by the Feds.
If selected, a family (parents and students) must submit copies of their base year tax returns, bank, investment, and personal holdings statements, and business and farm ownership information.
What were the benefits of verification?
The process, exercise is in place to ensure that families are using accurate financial and personal information when seeking federal financial aid. The information gathered and results from the verification process can also affect one's eligibility for need-based institutional support and, in some cases, state assistance.
What are the drawbacks of verification?
· Time-consuming process and expense for the institution and family
· Creates delays in communicating financial aid awards to families
· Impacts critical to the decision making and selection process by families
· It affects many who are non-filers, low income, or no income families
If the verification process gets reinstated, what can families do to make sure they're prepared?
1. If working, file income tax returns on a timely basis and accurately
2. When completing the FAFSA, always use the IRS Data Retrieval Tool embedded as a part of the application process.
3. Obtain a hard copy (or data file) of the family's (student and parent) tax return.
4. Seek out assistance from non-profit, civic and community organizations to help complete the FAFSA
Denise Thomas, Financial Aid Consultant and Expert at Intelligent.com
What’s the verification process like?
Periodically check your college website financial aid portal. Being selected for verification may not come in an email and your college may not call on the phone to alert you. You may not be notified other than to see it in your student portal. If you are selected for verification the process is very simple. They are requesting documentation to verify that the information supplied in your FAFSA is accurate. You’ll be asked to upload copies of the requested documentation. Don’t worry if your income fro example isn’t enough to file taxes that year. They’ve seen it all and there are accommodations of every inevitability. If your circumstance is not listed, call the school financial aid office to ask and find someone who has the answer. Funds will not be released to your school account until the verification documentation is submitted by the deadline.
What are the benefits of verification?
Verification may result in additional grants or tuition discounts. But not completing the verification is a guarantee of nit receiving funds.
What are the drawbacks of verification?
With verification, the family whose financial situation has improved or who initially entered incorrect information could find that the initial grant offered is being reduced. The truth is that someone else has a greater need, and your need is no longer as large.
If the verification process gets reinstated, what can families do to make sure they’re prepared?
Don’t panic. It’s a natural reaction to panic when selected for verification much like finding out your taxes are being audited by the IRS. The good news is that this is much less traumatic. Being selected may be totally random, or it may be that you did not use the IRS Data Retrieval Tool, or you did use it but reported rollovers or amended your tax return. Some schools verify ALL student FAFSA forms.
To better prepare for the possibility, keep a copy of the information you originally submitted in a folder on your computer until your teen begins that college school year. Where did the number you entered come from? If it was your bank account statement, then either keep a hard copy or save a digital copy on your computer. Since you can upload PDFs or JPG’s taking a screenshot and saving it to your computer is good enough.
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