Violations of financial aid verification remain in the top 10 most common audit and program review findings.
Give back the money!?
That’s right. Violations of financial aid verification remain in the top 10 most common audit and program review findings for the past three years and that can lead to students receiving ineligible disbursements and schools having to return their federal funds and possibly incur penalties and/or fees.
To help avoid this, your school is required to have written financial aid verification policies that include the following:[1]
- the time period in which students must submit verification documentation,
- the consequences for failing to submit those documents in time,
- the method you will use to notify students if their EFC and Title IV aid amounts change,
- the procedures you or your students will follow to correct FAFSA data, and
- the procedure you will follow to refer a student to the Office of Inspector General (OIG).
While financial aid officers should be engaging in regular self-assessments to ensure that they are adequately prepared, it is equally important that students selected for financial aid verification complete it accurately to ensure no over-awarding, underfunding, or ineligible aid is disbursed.
As the saying goes “audits inspect what you don’t suspect, so you should be prepared for anything and inspect everything.”
It is important that schools ensure the verification documentation received are completed with correct information, including any and all statements. In addition, schools are required to address any conflicting information in the file, which must be resolved whether the student is selected for verification or not and prior to disbursing federal funds. A thorough review of the student verification documents is generally the best practice.
How Financial Aid Officers Can Improve the Financial Aid Verification Process
This verification process can be very time consuming, and students can often experience delays of award notification and or funding by the school. It is especially difficult for students during peak enrollment periods, along with the delay of being placed on a wait-list and the nerve-racking process of waiting to hear about early decisions, Verification can become daunting to say the least.
Financial aid administrators need to be mindful of so many first-generation students now attending college. These students find the financial aid application process intimidating and confusing; having a financial aid counselor available to answer questions can be crucial to the student enrollment cycle.
It is for this reason, along with being able to provide students with a more convenient and simplified process, that aid administrators should consider reallocating this time for students and parents.
Increased efforts can be allocated to counseling students and preparing them for managing debts during and after school. The additional personal counseling can lead to more informed and financially literate students that are more aware and cautious with debt, engaged more as educated consumers, and better prepared to manage debt post enrollment.
Staff can provide additional budgeting and financial literacy by educating students on the detriment of loan default and the impact on their credit score, garnishment of wages, etc.
This creates a substantially more positive student experience that can lead to them being better prepared and able to complete enrollment and graduate successfully. Furthermore, streamlining the financial aid verification process can also create a greater incentive for graduates to remain in touch with the aid office with repayment questions.
The Benefits of Outsourcing Financial Aid Verification
Streamlining verification via outsourcing is beneficial to students and parents in many ways:
Enhanced student experience and Improved retention
Academia has generally embraced a student-centric or customer-focused approach that emphases creating a more positive experience for the student, which in turn produces alumnae, improves retention, and drives the overall success of the college.
When graduation, retention, and completion rates climb sharply as a result of a student-enhanced enrollment experience, the cost of outsourcing verification is well worth the investment. Furthermore, aside from enhancing the student experience, internal operational processing will also see an increase in efficiency, effectiveness, and reduction in processing times.
Students are synonymous with customers; student enrollment drives sustainability.
Increased profitability and school growth
Positive student experiences increase profitability and growth for the college. Since Academia is moving toward a student-centric focused model to fit the challenges of a student’s life. The enrollment and financial aid process should also adopt a more fluid and robust structure to ease the burdens faced by the financial aid office.
Cutting through the red tape
The students’ experience of applying for federal aid and completing college applications can be incredibly intimidating to say the least.
Earlier this year ED’s report to Congress[2] proposed simplifying the Free Application for Federal Student Aid (FAFSA) (currently there are 105 questions total or, 10 pages which includes instructions). While the FAFSA is available on the web, accessible by mobile devices and tablets, students and parents still need help. The financial aid application process doesn’t end there but is only the beginning of the labyrinth referred to as the federal aid process. Once the school receives the Institutional Student Information Record (ISIR) and begins the review process to package, the real adventure begins.
Supplement financial aid staff
The outsourcing of verification will also assist the college campus by alleviating the burden of sometimes short-staffed financial aid offices.
The outsourcing of verification can be performed by a qualified, compliance-oriented organization that can produce a more streamlined communication that is clear, concise, and consistent.
Provide training and avoid audit violations
The outsourcing is not the only component. The invaluable training process that comes along with the use of a 3rd party to educate your financial aid team is quintessential. The training provided will prepare the school for compliance items that are typically found during an audit or program review.
Verification of student files will experience significantly reduced turnaround time in processing and increased accuracy of award packages that result in a happier customer/student experience.
Ultimately, outsourcing verification will produce a more positive student experience with the financial aid office and also increase the efficiency and effectiveness of the financial aid team at the school that can remain focused on the attention paid to the student/customer and contribute to even greater student success.
Verification Regulations: 34 C.F.R. §§ 668.51 ̶ 668.61 (Subpart E) and 668.16(f)[3]
[1] FSA Handbook 2019-20 AVG
[2] https://www2.ed.gov/policy/highered/leg/hea08/fafsa-report.pdf
[3] 2018 FSA Session#25 Program Review Essentials and the Top 10 Compliance Findings
