During the Verification session at the FSA Training Conference, the Department of Education (ED) announced updates and hot topics for the 2019-2020 and 2020-2021. In addition to changes to the acceptable verification documentation, which was announced earlier this year, ED announced that the number of FAFSA filers selected for verification was reduced in 2019-2020 by about 900,000 filers.
ED has been working to find a balance between reducing the verification burden on students and financial aid administrators while still ensuring that students are disbursed the correct amount of funds. In October 2018, the Office of Federal Student Aid (FSA) started using a machine learning model to select FAFSA filers for verification. Since implementing the machine learning model, the overall selection for verification has been lowered from 30% to 22%. According to a cost-benefit analysis performed by ED, verifying 22% of filers resulted in the highest return in reducing improper payments and reduces the burden on all parties, institutions, students, and families.
In the updated process, the machine learning model chooses filers based on a risk score, then the FSA chooses a “control” group, which will never be chosen for verification. A treatment group is then randomly selected to complete verification. The model that ED is using is retrained every year, and gets smarter every year.
In addition to reducing the number of filers selected for verification, this new model should also reduce verification melt. Verification melt is a term referring to the number of filers who are selected for verification, but never complete verification or receive federal aid. The FSA estimates that 11% of filers selected for verification will melt, or not complete verification. Using this estimation and the reduction of filers initially selected, close to 100,000 more students will be able to continue the process of accessing federal financial aid, according to the conference session. Moving forward, ED will continue to work toward reducing verification melt and improving its process for verification selection.
View the full Verification FSA Training Conference session.
Sources:
NASFAA: ED Announces Improvements in FAFSA Verification at FSA Training Conference
FSA Training Conference Session: Verification