Friday, March 10, 2017

Feds Make It Harder for Students to Access Financial Aid

From Politico:


The IRS and Education Department confirmed late Thursday that the federal government purposefully shut off an online tool used by millions of students each year to apply for federal student aid. The IRS Data Retrieval Tool, which allows students to automatically import tax information onto their Free Application for Federal Student Aid, will be “unavailable for several weeks” as a result of concerns about security of student data, the two agencies said in a statement.

— It’s not clear what, specifically, prompted officials to shut down the tool without advance notice in the midst of the financial aid and college application season. The IRS and Education Department statement said the decision to shut down the tool, which has been operating for seven years, was “a precautionary step following concerns that information from the tool could potentially be misused by identity thieves.” It added that “we believe the issue is relatively isolated, and no additional action is needed by taxpayers or people using these applications.” More here.
What it means for students: Applicants for federal student aid will have to furnish their tax information on their own. And not using the IRS Data Retrieval tool could make it more likely that they’ll have to take the extra step of verifying their income and tax information, a process that could potentially add weeks to their ability to receive financial aid.

— Some advocacy groups complained the Education Department was slow to explain why the tool had been intentionally disabled, which was done almost a week ago. “We are greatly concerned that the Department of Education took so long to put out a statement about what was happening with the tool,” said Carrie Warick, director of policy and advocacy for the National College Access Network. 

"Many of our students count on this tool, so it’s important for our organizations to be able to provide them with information about what’s going on.”

— Justin Draeger, president of the National Association of Student Financial Aid Administrators, called on the Education Department to ease up on how aggressively it targets students for verification as more students are forced to submit paper tax returns.

— The temporary shutdown of the IRS Data Retrieval tool comes as the Education Department on Thursday night released new data showing the number of students and families who took advantage of the earlier FAFSA timeline created by the Obama administration. Part of the reasoning behind that change — which also let families use “prior-prior year” income data — was to allow more students to use the IRS Data Retrieval Tool, which saves time and improves accuracy of applications. Disabling of the tool “makes some of the goals of early FAFSA harder to achieve,” said Warick. “It really feels like a step backward in the FAFSA simplification process.”
— More than 5.4 million students applied for federal student aid during the three-month window last year created by the Obama administration’s decision to make the FAFSA available on Oct. 1, as opposed to Jan 1. The Education Department cautions that it’s not fair to compare that number to the 8.2 million students who applied for aid during the first three months of the previous year’s FAFSA cycle because that period is closer in time to most deadlines for aid.

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