October 1 is just around the corner, which means that your FAFSA will be ready to fill out for next school year. With that, the IRS data retrieval tool, which malfunctioned during the application cycle in March, will be available once more to students and their families as they fill out the FAFSA.
But first things first, what is the IRS tool on the FAFSA?
It allows students and their families to do the following:
So what happened in March with the IRS tool?
- Provide tax information easily.
- Ensure that tax information is correct and/or up-to-date.
- Makes it unnecessary to provide tax information to schools in addition to inputting on the FAFSA.
In March, the U.S. Department of Education, along with the IRS, decided to pull the tool from the online FAFSA
form. It became apparent that the tool was a target for identity thieves, offering the opportunity to steal financial information from applicants. Hackers would then use the tax information to file tax returns under a taxpayer’s name and have the refund deposited to a prepaid card.
According to USA Today
, the IRS Commissioner, John Krosiken, told the Senate Finance Committee that “information for up to 100,000 taxpayers may have been put at risk as hackers posing as students used the online tool to apply for financial aid.” At the time, the IRS was hesitant to say whether or not the tool would be ready for the next FAFSA application cycle, which would launch on October 1.
Where do things stand now?
Fortunately, the IRS has done a great deal of security work on the IRS data retrieval tool for the FAFSA. It has gone through a series of encryption protections to keep financial information safe for applicants. The tool went through a soft launch in June and was made available to college graduates as well as graduates seeking income-based repayment plans, as reported by USA Today
Students and their parents, however, should be forewarned about the changes to the IRS data retrieval tool. When inputting the information from the IRS onto the FAFSA, the actual figures will not be visible, i.e. you won’t be able to view income figures. Instead, students and parents will see a message that simply states, “Transferred from the IRS.” It may be unsettling for students and families that don’t know actual income numbers, but this is the best the IRS and the U.S. Department of Education can offer at the moment, according to USA Today
Even as the IRS continues to develop and improve the tool, students and their families should take advantage of the offering. It saves time when filling out the FAFSA, but more importantly, it makes the application process easier and more accurate.
Again, the FASFA will be available for students applying for financial aid for the 2018 – 2019 school year on October 1. File as soon as possible after its release as some schools offer financial aid
on a first-come, first-serve basis. Best of luck!