Think the Federal-Aid Process Is Crazy? Here’s Some ‘Bureaucratic Sanity’

The U.S. Department of Education on Wednesday made many people happy. No, really.

Financial-aid officers, college-access advocates, and education wonks all cheered the news that a vexing part of the federal-aid process had just gotten simpler.

Here’s what happened. The Education Department released new guidance on recent changes in 2018-19 and 2019-20 verification requirements. Traditionally, those requirements have hindered many students who file the Free Application for Federal Student Aid. Why? They had to round up all the required documents in a world of red tape.

The guidance, effective immediately, essentially acknowledges that challenge, giving colleges more flexibility when verifying students’ financial information. Colleges may now accept signed tax returns instead of tax transcripts, which often aren’t easy to get.

Another change concerns students who don’t file (and aren’t required to file) tax returns. They still must obtain verification of their nonfiling status from the Internal Revenue Service, but those who are unsuccessful may now submit a signed statement explaining that they tried, along with a copy of their W-2.

“This is a moment of bureaucratic sanity,” said Tyler Pruett, director of financial aid at Samuel Merritt University, in Oakland, Calif. “I’m usually pretty critical of the Education Department, but I need to give them props when they do something that’s helpful for students.”

All this might sound like way-too-nerdy minutiae. But verification is a high-stakes issue with real-world consequences, as The Chronicle has reported. For some students, it’s a trap that can delay or derail their plans.

Each year, the Education Department selects one-quarter to one-third of all federal-aid applicants for verification. Most have something in common: financial need. Though the Education Department doesn’t release verification numbers annually, it has revealed that 5.3 million students were selected for verification in 2014-15. About 5.2 million of them were eligible for federal Pell Grants, which help lower-income students pay for college.

But many of them never get that aid. In 2015-16, just 56 percent of Pell-eligible students selected for verification went on to receive the grants, compared with 78 percent of those who weren’t selected.

There are probably a few reasons for that gap, but one is that verification deters some college hopefuls who are very much entitled to their aid. The National College Access Network estimates that verification kept one in five Pell-eligible students from receiving the grants that year.

Sara Urquidez, executive director of the Academic Success Program, a Dallas nonprofit group that provides college advisers at public high schools, has seen verification slow down the wheels of the aid process. Sixty-five percent of the applicants her organization served in 2017-18 were selected for verification, up from 33-40 percent in previous years. Many high schools and colleges saw a similar increase.

The new federal guidelines, Urquidez said, give colleges the opportunity to streamline the financial-aid process. “Given the verification hurdle that everyone had to overcome last year,” she said, “it is my hope that colleges will be open to these simplified requirements, especially given the present difficulties in obtaining required verification documents due to the government shutdown. Ultimately, the adoption of these guidelines is good for students, and as a byproduct, college access collectively.”

Eric Hoover writes about admissions trends, enrollment-management challenges, and the meaning of Animal House, among other issues. He’s on Twitter @erichoov, and his email address is eric.hoover@chronicle.com.