Should We Verify FAFSA Data Beyond Federal Verification Requirements?

This is a difficult question to answer. We will give you our anecdotal impressions of what schools are doing and where the extra verification may and may not be justified.

You have to run the numbers. It is NASFAA’s opinion that too many schools go far beyond federal verification requirements out of an abundance of caution or a natural sense of suspicion rather than a proven need to address an inequity. There is a fine line between skepticism and wanting to perform a fiduciary responsibility. You should ask yourself the following questions:

1. Am I performing extra verification because I have evidence that it impacts the student aid index (SAI) of a substantial number of students?
2. Am I performing the extra verification because that is the way we have always done it?
3. When is the last time I analyzed the data to see if the extra data being verified has a major overall aggregate impact on students’ SAIs and awards?
4. Have I analyzed the data to consider whether performing extra verification adversely impacts student matriculation and retention?

We do not believe skepticism based on a few bad actors should be the sole basis of any verification policy. This is why we say to run the numbers and analyze the data for your student population—this should be the justification for any institutional verification policies you have. The U.S. Department of Education's (ED’s) verification selection model is already risk-based, so your policies should supplement ED’s only when necessary.

Other Untaxed Income: Starting with the 2024-25 award year under the FAFSA Simplification Act, other untaxed income is not reported on the FAFSA, is not included in need analysis, and is not treated as other financial assistance (OFA) when packaging the student with Title IV aid. See AskRegs Knowledgebase Q&A, What Untaxed Income Will Be Included On the FAFSA For Need Analysis In 2024-25 and Beyond?

Low Income Verification: Fortunately, ED has already done the research on low income verification. Please see AskRegs Q&As, Are We Required To Verify Exceptionally Low or Zero Income?, and, “Is Low Income or Zero Income Conflicting Information? These Q&As explain that, while a school can have a policy to verify this information, we do not recommend it for two reasons:

• Based on concern from the financial aid community, ED previously implemented Verification Tracking Group V6 to verify families with low or zero income. However, ED's review of the resulting data from those award years revealed that verification of V6 revealed no significant misreporting of income information by families with low or no income. If ED specifically concludes that it is not a fiduciary risk, why would you choose to verify this information?
• It is our understanding that most often these families simply are confirming for a second time that they are low-income families, and most of them qualify for the maximum Federal Pell Grant anyway. In other words, it is not worth all the trouble for the family or the school.

Specific Data Elements: It is acceptable to verify individual FAFSA data elements that have proven to be problematic for your student population. This is why schools are allowed under 34 CFR 668.54(a)(3) to select individual data elements for their verification policies. However, selection policies should be based on historical data that indicates a particular data element is problematic for your student population.

Dependency Status: While we believe this is generally unnecessary (because ED does not require it), we know that many schools have data indicating that these questions are error prone for their student populations. In these cases, it is acceptable to have an institutional verification policy to verify this data. Even then, we are not sure that you should verify ALL dependency status questions just because one or two of them may be error prone for your students. See AskRegs Q&A, Are Schools Required To Verify That a Student Answered the Dependency Status Questions Correctly On the FAFSA?

Income Changes From Year to Year: This is a common institutional verification selection criterion. Again, evaluate your historical data to determine if you need to select all data elements for verification or just income data elements.

Verifying Prior Professional Judgment (PJ) Decisions: Another area where schools might be overly diligent is comparing subsequent year FAFSAs to PJ adjustments/projections made in earlier award years. While this may be helpful from a PJ process-improvement perspective, it is not required from a verification/conflicting information perspective. If the PJ adjustment was reasonable and appropriately documented in the previous award year, it is not conflicting information and you do not go back and make adjustments to that prior award year data. See AskRegs Q&A, Are We Required To Retroactively Correct Prior-Year Income That Was Estimated Using Professional Judgment?

In the End: Is it really fair or productive to place this extra verification burden on a large number of your students just to find a few bad actors? It is entirely up to the school how to best balance responsible stewardship and pragmatism. Just be sure your institutional verification policies make sense for your student population.

Conflicting Information: Remember, independent of verification requirements, under 668.16(f), institutions must resolve all discrepancies and conflicting information related to the student’s aid application (even for prior award years). See AskRegs Q&A, Are There Exceptions To Resolving Conflicting Information?

P&P Builder: NASFAA’s Policies & Procedures (P&P) Builder guides you step-by-step through the creation of a centralized, accessible policies and procedures manual. This is included in the cost of NASFAA Value Plus membership. There is an additional cost for other membership levels.