Verification is the process used by schools to verify that the information submitted on the FAFSA is true and accurate when matched with various source documents. For example, if a student submits the FAFSA and answered “yes” to being in a legal guardianship prior to turning 18, then a school may request court documentation to verify that response is correct. Another example would be confirming the Adjusted Gross Income (AGI) amount reported on the FAFSA matches the AGI on the IRS tax record. Schools are not only required to verify the accuracy of FAFSA data, but also resolve any and all conflicting information.
Each year, the U.S. Department of Education selects a certain percentage of an institution's students for the verification process. In addition, student’s may be selected for an institutional review if or when there is conflicting data between two data sources. To reduce application errors and discrepancies, the Department of Education instituted a Direct Data Exchange (DDX) process with the Internal Revenue Service (IRS). Using the DDX process when completing the FAFSA application significantly reduces an applicant's chance of being selected for verification, and also reduces the delay in offering and disbursing financial aid to a student's account.