“Trust, but verify“. Or in Russian, “Doveryáy, no proveryáy.” It rhymes in Russian. Cute, huh? But where does it come from?
This expression, popularized by Ronald Reagan in the context of nuclear disarmament talks with the Russians, has become a reference to being willing to believe what someone (with qualifications – namely checking to make sure it is the truth).
You could say that the same principle exists within Financial Aid as well. Federal Student Aid trusts, but verifies. They call this process “verification.”
What is moneyman talking about? When you complete the FAFSA, you enter information used to calculate your eligibility for financial aid (your EFC) such as your income, your federal taxes, the number of members of your family, and the number in college (among other items). Remember, your income is based on the last tax year available before the application year opens (so the 2020-21 application year opens on October 1, 2019, so the last tax year available at that time is 2018). Your personal information like marital status (of you and your parents), your assets and your family size on the other hand are as of the date you fill out the FAFSA.
The FAFSA takes the information provided by you and using the formula moneyman has described on this blog, comes up with your expected family contribution which determines if you qualify for a Pell grant and is used in the awarding of other need-based financial aid. But how do we know that the information you provided on the FAFSA is accurate?
Welcome to “doveryáy, no proveryáy“. While the FAFSA trusts you to enter the information, a number of applications (generally not to exceed 30% of those who apply) are selected by the government to go through a process called verification. It is a way of proving what you answered on the FAFSA by providing additional information.
When you are completing the FAFSA you have the opportunity to link your tax information directly to the FAFSA using the IRS Data Retrieval Tool (or DRT). The DRT allows Federal taxpayers to import data directly from the IRS system and answer the associated FAFSA questions. This makes the process of completing the application much easier and faster.
As an additional benefit, if you use the IRS DRT you do not have to verify your income information from another source since you have already done so by transferring information over. If you did not link your application to the IRS DRT, and you are selected for verification, you will need to provide a copy of either your Federal Tax Return transcript (available from irs.gov) or a signed copy of your paper Federal Tax Return.
How do you verify information other than taxes and income? If you re selected, colleges and universities will provide you with a verification form which you must complete to prove the information you filed on the FAFSA. If there are differences between the two sources of information, the school may contact you and ask you to explain the difference. These forms often additionally ask for untaxed income since much of that information cannot be determined from a copy of your tax return.
There is one additional type of verification for which you may be selected, and that is when you are asked to provide your identity by providing documents including proof of citizenship and high school graduation, as well as indicating that you understand that the financial aid you are receiving is for an educational purpose. This is done through another form also provided by your financial aid office.
Some schools (especially those who have a lot of their own grant or scholarship funds to distribute) may select all of their students to go through verification. This is usually because they want to be sure that the amount of funds they provide to students (which is often much more than that provided by the Federal government) is given to those who need the funding. Remember, “trust but verify.”
Verification tends to be a stumbling block for a number of student financial aid applicants. We will explore why in some coming posts, but keep in mind this generally is a requirement of Federal Student Aid and it is just a way to confirm the information provided on your financial aid applications.