<p>I have read that historically about one third of FAFSAs are audited and that this will drop in the future if applicants use the IRS tool. Certain circumstances will trigger red flags for audits.
I also read that some schools audit 100 percent of their FAFSAs. Is there a certain type of school that fully audits? Can anyone tell my five or six schools that audit every FAFSA? I am curious why some schools are more diligent.</p>
<p>I believe the school can receive hefty fines if they award aid in error. Others will confirm this for me. </p>
<p>I know some schools audit 100% of their first year FAFSAs. My son’s school does. Another audits 100% of OOS FAFSAs-it’s state school. Don’t know why, I asked, it’s just policy. Now this was before IRS retrieval tool was usable and one thing that was asked in the audit was the physical tax returns, signed. It was a pain in the neck to copy and send, as ours is pretty thick, but that’s what they wanted, nothing else.</p>
<p>The reason some schools verify all FAFSAs is to make sure their students’ financial situations are being correctly reported - that way, they know they are using their money for those who need it the most. Believe it or not, sometimes lower income students benefit from being verified - they often misreport information, resulting in a higher EFC. Other students seem to think their parents don’t earn any money … and lo & behold, the tax returns collected during verification show a different story. It’s all about trying to make sure money is used to help those who really need it.</p>