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IRS Data Retrieval Shutdown Makes Student Applications for College Aid Difficult

An online tool that helped college students and their families complete the Free Application for Federal Student Aid (FAFSA) application for financial assistance has been taken offline until the fall.

The IRS Data Retrieval Tool (DRT), which was available at both fafsa.gov and StudentLoans.gov, was taken offline in March due to concerns that identity thieves were using the data to file fraudulent tax returns, says the U.S. Education Department (USED) and the IRS.

The IRS DRT provided tax information that automatically completes portions of the FAFSA application, saving students and their families the time required to manually fill in the information from the previous year’s tax return.

In a joint statement, the agencies say the IRS “is working to identify the number of taxpayers affected by questionable use of the Data Retrieval Tool.”

The statement continues:

Identity thieves may have used personal information obtained outside the tax system to access the FAFSA form in an attempt to secure tax information through the DRT. The IRS continues to review the extent to which this contributed to fraudulently filed tax returns. The IRS has identified instances where our strengthened fraud reviews stopped questionable tax returns by filers who also accessed the DRT.

The agencies also note that the “scope of affected taxpayers is still being determined.”

In 2015, the IRS experienced a cyber attack in which identity thieves stole data from the taxpayer accounts of 330,000 Americans, notes the Washington Post.

In their statement, the IRS and the USED advise college students and their families to retrieve their previously filed tax return to complete the FAFSA or apply for a student loan.

“We know this tool is an easy way for students and families working on applications to access their financial data,” said IRS Commissioner John Koskinen. “While this tool provides an important convenience for applicants, we cannot risk the safety of taxpayer data. Protecting taxpayer data has to be the highest priority, and we will continue working with FSA to bring this tool back in a safe and secure manner.”

“We have heard from students, parents, and the financial aid community that applying for aid is harder without the DRT,” said James W. Runcie, Federal Student Aid chief operating officer. “We will do all we can to help students and families successfully submit applications while the tool is unavailable and remain committed to protecting applicants’ personal information.”

However, Justin Draeger, president of the National Association of Student Financial Aid Administrators (NASFAA) said the IRS’s statement on the removal of the DRT “betrays a disheartening lack of understanding about how vital this tool has become in streamlining the financial-aid application process.”

A letter of petition from NASFAA to DeVos and Runcie asks the department to allow more flexibility to financial aid administrators, admissions and guidance counselors, and students in completing the lengthy forms without the use of the DRT. Draeger states the petition has been largely ignored.

Since colleges and universities want the FAFSA application completed by March to assess how to dispense student aid, members of Congress have urged states, on behalf of their constituents, to permit greater flexibility with financial aid deadlines.

A letter from 41 members of both the U.S. House and the Senate education committees sent to U.S. Education Secretary Betsy DeVos states that while the members of Congress agree with the goal to protect taxpayers’ information, they are concerned about the needs of students and their families to apply for and receive financial aid.

Both NASFAA and the members of Congress have urged the departments to provide greater notice of the unavailability of the DRT on their websites and guidance on alternative means of submitting the information required.

The agencies say students and parents may “submit a paper copy of his or her tax return, copies of pay stubs or other acceptable forms of documentation explained online during the application process.”

IRS and USED advise FAFSA and student loan applicants to “access the tax software used to prepare the return or contact their tax preparer to obtain a copy.”

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