'Prove you're a low-income student': After filing FAFSA, some college students are audited

Normally, on the first day of classes, students rush the financial aid office at the University of Nebraska-Lincoln. Phones stay busy, inboxes stay full, and the line of students stays long.

That didn’t happen this year. The federal government relaxed how it audits low-income students who receive taxpayer-funded financial aid.

Instead, the Education Department said it would focus its efforts on identity theft and fraud. That means fewer students had to prove how much they or their families earned.

The change allowed the University of Nebraska's flagship campus to get money immediately to roughly 500 students stuck in bureaucratic limbo, said Justin Chase Brown, the director of financial aid.

“So many students were able to be in their classroom learning rather than waiting in line or on the phone with the financial aid office,” Brown said.

Financial aid experts fear this extra help for students could be short-lived.

The U.S. Department of Education had narrowed its audit process for the Free Application for Federal Student Aid because of the pandemic. Now that life is returning to some level of “normal,” the government could again start requiring millions of students from poor families to prove they would struggle to pay for college themselves. The lengthy and arduous audit is known as “verification.”

The audit disproportionately affects the country’s poorest students, those eligible for Pell Grant scholarships – an added burden for students who already face more difficulties on their path to graduation. That’s because the federal government only asks Pell-eligible students to prove their income.

Many students who have completed their FAFSA but later are selected for this government audit never make it to college.

Student loan forgiveness has stalled: But Biden is continuing COVID-era payment freeze

It's a scam: Robocalls are selling student loan forgiveness. Don't fall for it.

Student advocates have criticized the process, saying there’s little evidence verification saves the government a significant amount of money. And even the federal government has acknowledged the “challenges” posed by the verification process.

“While these challenges predated the pandemic, we are aware that the temporary changes made to the verification process for the 2021-22 application cycle helped many students from low-income backgrounds," said Kelly Leon, the Education Department’s press secretary.

The federal government estimates 7% of students who are accepted to college and then receive a government audit don’t attend.

The audit process can also slow how quickly a college can send federal money, which can then make life harder for cash-strapped students. And the Washington Post found the government’s method for choosing students for verification disproportionately selected those in Black or Latino neighborhoods.

Protecting public money or a barrier to college?

The verification process is meant to safeguard taxpayer money by ensuring students receive the right amount of aid, and it's supposed to stop fraud. Earlier this year, the Los Angeles Times reported the California Community Colleges system found nearly 65,000 fake applications for aid, though it’s unclear if any federal money was given out. Few financial aid officers are against removing verification altogether, but they question if the current scope is effective.

In recent years, about 70% of those selected for verification saw no change to their Pell Grant award in the 2018-19 and 2019-20 award cycles, according to the National College Attainment's Network analysis of federal data. About 10% of those students received even more money.

The group estimated the process saved taxpayers roughly $428 million in the 2019-20 award year. For context, the government awarded about $27.8 billion in Pell Grants to 6.7 million students in the 2019-20 school year, according to federal data analyzed by the College Board.

The federal government chooses which students should be audited based on an algorithm, and in past years the department had selected up to 38% of all FAFSA filers. That figure is now closer to 18%, though the figure is higher for students eligible for Pell Grants.

After the federal government makes its selections, it’s up to colleges and students to navigate verification. College financial aid officers are required to ask students for more documentation than what they had initially submitted through the FAFSA. They might, for example, have to track down their tax transcripts or wrangle documents tied to their parents’ earnings.

“It’s a very cumbersome process,” said Jennifer Harpham, the financial aid director at the University of Akron in Ohio. “Especially for our lower-income families, it creates barriers to enrolling in college.”

A college closed, upending one veteran’s: Two years later, he’s still rebuilding.

Sophomore Bezawit Atnafseged, 19, has twice gone through verification while attending the University of Akron. She choose this school, she said, because it was near her home in Columbus and it was affordable. Her financial aid package, which includes a Pell Grant, makes it easier to attend.

Atnafseged, who is studying biomedical engineering, said she was confused when she first saw an email indicating she would need to verify her financial aid application. Not only was it yet another administrative hurdle, she said, but she wasn't even sure what needed to be done initially. She feared, Atnafseged said, she might make an error in responding to the government's request for more information that could threaten her financial aid package.

She and her mother were able to take advantage of a tool that links applicants' taxes to their FAFSA form, but that raised questions too. If the IRS already had her information, why did she need to serve as an intermediary? It felt excessive, she said, as though she was being told, "Do you really want to go to college?"

After all the work to verify her information, Atnafseged said her award package stayed exactly the same. 

Don't have the money? Prove it.

In mid-July, Rich Cordray, the head of Federal Student Aid, announced the government’s verification efforts would be focused on identity theft and fraud.

“We will continue to evaluate what improvements can be done longer-term to make the verification process more equitable while still preventing fraud, " Cordray said.

The department predicted the waiver could result in 200,000 more students of color and those from low-income backgrounds attending college in 2021-22.

But the change only applied to aid for the current school year – raising questions as next year’s financial aid season starts Oct. 1. What’s more, college enrollment dipped during the pandemic. Why make the process complicated again, just as some people are once again considering higher education?

Feel like you’re surviving, not thriving? Join us at Keeping It Together, a newsletter about wellness and living life amid COVID-19.

The urgency of those questions increased earlier this month when the federal government issued a notice on the Federal Register that some say suggests a return to business as normal for verification. The Education Department, however, has stressed additional changes remain possible.

Matthew Moore is an assistant vice president that oversees enrollment and director of financial aid at Sinclair Community College in Ohio, where nearly 46% of students are eligible for Pell Grants, according to data from the federal government. Last year, Moore said the community college processed about 20,000 applications for financial aid.

“We sometimes joke that the FAFSA is their application to come to our school,” Moore said.

The federal government marked about a quarter of those for verification. And the waiver announcement came after the college’s peak season in July for processing financial aid applications, Moore said.

Still, it allowed his office to waive the verification requirements for hundreds of students immediately. And it allowed him and his staff to focus on counseling students trying to pay for college rather than collecting paperwork.

That’s been especially important during the pandemic, Moore said, because more students have greater financial need. And colleges have also been tasked with distributing federal stimulus money. He, like the other financial aid officers who spoke to USA TODAY, hoped to see the government continue the waiver.

“What does it take to prove you’re a low-income student?” Moore asked. “It’s an unfair burden sometimes.”

Stay in the know: For more news on student loans and financial aid, plus more can’t-miss moments of the day, sign up for Daily Briefing.

This article originally appeared on USA TODAY: College financial aid audit: Extra FAFSA work after deadline for some