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Applying for financial aid isn’t going to be as bad as feared this year after all. The Department of Education Department has agreed to allow colleges and universities more flexibility to use as part of their verification procedures while the Data Retrieval Tool (DRT) is unavailable.
The DRT was shut down in March of this year after the Internal Revenue Service (IRS) noticed suspicious activity related to the tool. IRS Commissioner John Koskinen told a Senate Finance Committee in April that taxpayer data may have been compromised. While the exact numbers of affected taxpayers have not yet been determined, Koskinen told the Committee that it could be as many as 100,000.
As a result, while the IRS had initially planned to shut down the tool for a few weeks, the IRS and Federal Student Aid (FSA) subsequently released a joint announcement indicating that the DRT would be offline until the start of the next FAFSA season. That has created problems for students and their families who rely on the DRT for purposes of filling out the Free Application for Federal Student Aid (FAFSA). The information on the FAFSA is used to determine financial aid for the school year. For the most recent FAFSA cycle, there were 19,757,764 total applications: approximately one-quarter of those applications were students completing FAFSA for the first time.
The DRT isn’t the only tool that can be used to complete the FAFSA. The information needed to complete the FAFSA can be found on a previously filed tax return. To complete a 2016–17 and 2017–18 FAFSA, students should manually enter 2015 tax information from the tax return filed in 2016 (not the 2016 tax information used to file in 2017). Students who do not have a copy of the appropriate tax return can order a tax transcript directly from IRS using the Get Transcript tool at www.irs.gov/transcript, or by calling 1.800.908.9946 to order a copy.
Filling out the FAFSA manually can slow down the financial aid process or result in errors. To help, Lynn B. Mahaffie, the Acting Assistant Secretary for Postsecondary Education, issued a letter (downloads as a pdf) directing schools to “consider a signed paper copy of the 2015 IRS tax return that was used by the tax filer for submission to the IRS as acceptable documentation to verify FAFSA/ISIR tax return information.” Additionally, colleges are no longer required to collect documentation obtained from the IRS or other tax authorities verifying that their family did not file a 2015 tax return (the so-called “Verification of Nonfiling”). Instead, the applicant or the applicant’s family can provide the school with a signed statement certifying that the individual has not filed and is not required to file a 2015 income tax return, and a listing of the sources of any 2015 income earned by the individual from work and the amount of income from each source together with a form W–2, or equivalent, for each source of that income.
Secretary of Education Betsy DeVos said about the new measures, “These flexibilities are an important step toward making the process easier. They help applicants who normally would have used the IRS DRT to more easily complete the application process.” She added, “We will continue to look for additional ways to ease the burdens created by the IRS DRT outage until the tool can be restored with added security measures in place later this year.”
The new flexibilities begin immediately and apply to both the 2016-17 and 2017-18 FAFSA processing and verification cycles.
