The Invisible Barrier To Financial Aid That No One Is Talking About

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Over $2 billion in federal financial aid goes unused each year. How? Why?

Research about it has led to a concept called the “Leaky FAFSA® Pipeline”. Here’s a popular infographic about it that keeps making the rounds on social:

From the National College Access Network

With Bill Gates leading the charge, much of the conversation has revolved around the complexity of the FAFSA® itself.

While it is burdensome, an important big leak further down the pipeline is missing from the conversation — the verification process.

Verification is the FSA’s process to ensure students are providing accurate information on their FAFSA® forms.

The goals of verification may seem simple: ensure no one is committing financial aid fraud, and make sure the right students are getting the right financial aid.

The problem is that 10% of low-income FAFSA® filers give up on financial aid just because of the verification process.

And students with the most need constitute 90% of all verification audits.

How does this happen?

The Institute for College Access & Success recently surveyed financial aid administrators and college access professionals to find out what was going on. And the real life stories they shared were extremely illuminating.

Photo by Monica Melton on Unsplash
Photo by Monica Melton on Unsplash

Here are five intriguing stories from the front line that tell us what’s really going on:

1. “When I first started, I had students come to me and say, ‘My sister, my brother, they got their FAFSA® [forms] rejected.’ And when I dug deeper, it was the verification process that they misinterpreted. They thought they were not going to get any aid.”

As with most things pertaining to financial aid, it’s clear that the communication surrounding verification needs to be significantly improved.

Students literally can’t tell the difference between being flagged for verification and being denied financial aid. As another survey respondent noted, the word verification itself can seem intimidating.

Considering how frequently students are selected at verification — at least a third of applicants! — it’s worth exploring ways to better brand and educate students on the process.

2. “In my state, for your SNAP benefits, you don’t have a document, you just have a card. A lot of colleges don’t accept a photo copy of the card. So parents are saying, ‘We don’t have a statement, the offices won’t give us one.’ So it’s this total disconnect between what’s actually happening on the ground and then what these offices need.”

When students are stuck in a bureaucratic loop that’s impossible to escape, what are they supposed to do? More to the point, how is it the student’s fault that the school doesn’t accept the lone proof of SNAP benefits the state provides?

The student is left witnessing a communication breakdown that’s costing them financial aid.

3. “The students don’t have their book money, they don’t have anything while they’re going through this process. It’s very, very upsetting because we lose them. They drop out. They give up. They just get so frustrated that it’s like an inquisition for them.”

Here’s the “verification leak” in a nutshell. Verification holds up the student’s financial aid, and without financial aid they can’t pay for college.

Right now, the existing infrastructure can’t handle the volume of forms each school is required to verify. The result? Instead of catching financial aid fraud, the process is forcing qualifying students who have done nothing wrong to withdraw from college.

Image by Kyle Glenn on Unsplash

4. “For these types of students, applying for college was so much of a stretch to begin with – they may have been told by so many people that it wasn’t possible – and this proves all of the naysayers right and they decide that maybe it’s not worth going through all of the effort. This is especially difficult for first-generation students.”

It’s this particular revelation that leads to the question: what are we trying to accomplish with verification?

Financial aid is supposed to be the equalizer that allows low-income students to prove the naysayers wrong. Verification, which is only a piece of the financial aid process, has become the vehicle through which those naysayers are being proven right.

This isn’t a simple corruption of the FSA’s purpose, it’s a hijacking.

5. “One thing that we see constantly is students who have an EFC of zero and we verify with minor changes and it’s still at zero, and then we have to wait for that correction to come back when we all know we’re going to be paying them full Pell. So that slowdown is completely pointless.”

Low-income students aren’t getting better or more accurate access to financial aid. The only thing its doing in many cases is causing an unnecessary (and extremely disruptive) delay.

Is it worth costing 10% of low-income students access to financial aid just to make small changes to a handful of other students’ forms? This feels like madness.

So to sum it up, here’s what we’ve learned about the verification process from these stories:

  1. Students don’t know what verification is
  2. Verification has minimal impact on changing financial aid award packages
  3. It can be actually impossible to complete
  4. Students are dropping out of school because of the verification process

In the simplest view possible, the aim of FAFSA® verification is to ensure the right amount of financial aid is given to the right students. Instead, it’s preventing 10% of the neediest students from getting any financial aid at all.

There should be a simple answer to the question of “What are we going to do about the $2 billion in unused financial aid each year?” And it should be: Give it to the neediest students.

To do that, we have to remove some of the barriers that are preventing those students from accessing those funds. Right now that means fixing the verification process.

Do you have a verification horror story? Let us know on Twitter or Facebook!