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Financial Aid

FAFSA Verification Takes Center Stage in COVID-19 Era

The current pandemic is exacerbating the laborious process of reviewing verifications for student FAFSA applications — placing increased demands on financial aid offices at colleges and universities everywhere.

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Over the last few years, many higher ed student financial aid departments have begun acknowledging the need and even adopting technologies to automate FAFSA and financial aid processing. The normal verification process is often referred to as a highly complicated and stressful experience for students and their families. With the current COVID-19 pandemic, this process is further exacerbating the laborious and time-intensive verification process that greatly impacts not only students but staff and advisers as well. The latest Achilles' heel for institutions will become the enormous challenge of reviewing verifications for student FAFSA applications during the pandemic and into the future.

Prior to COVID-19, the National College Attainment Network (NCAN) reported that 50 percent of all students eligible for Pell Grants are asked for verification every year. In addition, NCAN estimates that one in five low-income students will experience "verification melt" and abandon the process. Now with record unemployment impacting millions of Americans in a short period of time and those numbers expected to continue rising during the pandemic crisis, college-bound and enrolled students may be eligible for emergency funding, campus-based aid, and other need-based aid based on the new CARES Act and other pending legislation.

Professional Judgements Uncovered

The verification process is important because it determines eligibility and verifies a student's level of financial "need" utilizing income filed on prior tax return and household size reported on the FAFSA application. If verification is delayed, it can hold up the awarding of critical need-based aid and possible awarding of COVID-19 emergency funding. For staff and advisers, timely distribution of funds and compliance becomes a significant challenge due to the administrative volume and regulatory complexity in even the best of times.

According to the U.S. Department of Education, nearly 19 million students applied for financial aid during the 2017-2018 year. Today, with increasing unemployment numbers and business closings, a snowball effect will likely occur in the financial aid department as students and parents begin to file special financial aid appeals based on new financial hardships. An appeal or Professional Judgment can be requested based on loss of employment or change in income or household size, and these requests require an additional case-by-case review by the financial aid office and possibly reevaluation of need. 

In the recent Higher Education Emergency Relief Fund (HEERF) passed as part of the CARES act, the Education Secretary also strongly encourages financial aid administrators to "exercise the use of professional judgments available under Section 479A or the Higher Education Act of 1965," on a case-by-case basis to exclude emergency financial aid grants from certain calculations. 

Filling Critical Remote Processing Gaps

Just as COVID-19 is forcing institutions across the globe to look at and rapidly adopt new technologies to enable more efficient and engaged online learning delivery, the same should be done for administrative functions that are critical to the recruitment and retention of students. With the race to rapidly automate the financial verification process to mitigate significant delays and issues with the likely exponential new applications and special requests for increased financial aid awards, the selection and implementation process must be handled with a thoughtful, systematic approach that maintains quality and compliance. The current environment highlights how important technology is in higher education and how technology directly impacts business continuity.

Unfortunately, institutions that don't already have technologies in place to accommodate remote processing may be relying on e-mail and other unsecure form collections that put both the institution and its students and their families at a greater security risk.

Considering the probable increase in Professional Judgment volume, students and families filing the appeal require additional guidance to ensure proper documentation accompanies the request. If this information is lacking, it will result in incomplete paperwork, unnecessary delays and possibly denial of the appeal. This can cause further backlog and headaches for the institution — and even more so if it is being handled via manual, paper-based processes. To avoid this scenario, it is critical for schools to have a way to process these requests remotely, efficiently and with proper guidance, particularly if the student cannot make it to the physical campus location.

Technological Preparation Is Key

Most financial aid or even student information system technologies are administrator-centric and lack a navigable, efficient way for students to maneuver the verification process. They also often only offer limited tools, making it difficult to identify a holistic view of the full verification process. As students' current and future economic situations are likely to be impacted for the long haul, the need for a comprehensive financial aid solution — that can automate and provide real-time tracking and communication of ISIR verification processes, comment codes and professional judgements — has now taken center stage. 

And, as there is a lot of buzz around improving the student experience and overall student success, the ability to offer students a dynamic, efficient experience in supporting their efforts to appeal for special financial support — especially given the current pandemic — will be a game-changer for those institutions that prepare for this new era. Increased demand on financial aid offices is coming. Make sure you are ready.

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