1. Because it's a pain in the butt. Well, it is! By all means, you should have the student bring the tax returns in if you are helping fill out the FAFSA -- but when you're done, give them back. Tell the student you might need them again if he or she is selected for verification, so he needs to keep track of them -- but if the tax returns remain in the school's possession, ED will be glad to hang you with them if they can.
And please don't try to be clever by hiding the tax returns hidden in a file drawer away from the students' files, or doing a file "clean-up" as soon as you find out you're having a program review. Unless, of course, you want to see embarrassing headlines like, "Trade school caught concealing documents: File clerk blows whistle during review."
2. Because once you have it, you can't destroy it when you're finished with it. The law makes it a crime to destroy documents you have in your possession with the intent to conceal information. And face it, if you destroy a tax return when the ISIR comes back, because the student wasn't selected for verification, you're doing it because you don't want the feds or your auditor to see it, which looks a lot like the intent to conceal, to me.
So if you want to keep tax returns while you wait to see if the student is picked for verification, you need to send them back to the student or parent -- not destroy them -- if and when they are no longer needed.
3. Because it invites "conflicting documentation" findings. The fed like to assert "unresolved conflicting documentation" findings as much as normal people like to eat a good steak. If you collect a Verification Worksheet from somebody who is not selected for verification, and she forgets to list the unborn child that you told her should be included in the household size when you helped her fill out the FAFSA, you've got a conflict that could lead to liability unless it's resolved. Why take that chance?
4. Because the feds don't care. You think they will give you a break because you did more than you had to? Forget it. More likely, they will find a policy statement in your catalog that says all aid recipients must be verified, then find a file that wasn't verified, and then try to make you pay all the money back on that file.
5. Because there are better things to do. Speaking of conflicting documentation findings -- most likely your financial aid people's time could be much better spent looking for the conflicting information you already have, instead of gathering more of it.
Did you know that an administrative judge at ED upheld ED's finding that if a student fails to fill in the blank asking for household size on an application for admission, and then reports a household size of three on the FAFSA, that's a conflict that must be resolved? See In the Matter of Avanti Hair Tech, U.S. Dep't. of Educ., Docket No. 02-22-SP, October 9, 2002.
http://www.ed-oha.org/cases/2002-22-SP.html
Program reviewers will review every piece of paper collected by any office in your school, to find conflicting information that you didn't resolve, and they may even call a blank space a "conflict." The less paper you collect, the less you'll have to review, and the more time you will have to review paper that you already have.
If your school has been doing 100% verification, but now wants to stop doing it, be sure to review all your publications (catalog, orientation handbook, policies & procedures manual) and revise them to make it clear that from now on, you verify only cases where the student is selected by ED for verification.
