NASFAA Statement on IRS Data Retrieval Tool Outage

Expected to Last Weeks, Outage Could Increase Financial Aid Application Complexity for Students and Create Backlogs for Institutions Without Additional Federal Action

Thursday, March 9— Students looking to file their Free Application for Federal Student Aid—or FAFSA—in the next few weeks in order to meet upcoming state financial aid deadlines may be in for a rude awakening. The Internal Revenue Service’s (IRS) Data Retrieval Tool (DRT), which allows students and parents applying for financial aid to import tax information directly into their FAFSA has now been nonfunctional for about a week. The IRS and the Department of Education (ED) said in a joint statement released today that they are working to resolve the situation, but that the tool will be down for several weeks.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA), made the following statement regarding the current predicament with the Data Retrieval Tool:

“Coming online in 2010, the IRS DRT has helped reduce application errors for millions of financial aid applicants, while at the same time reducing the number of complex and time-intensive income questions on the FAFSA. Applicants who use the DRT are less likely to be selected by ED for verification, a sometimes cumbersome process whereby a school is required to collect additional information from students to verify FAFSA information. ED has strongly encouraged applicants to use the IRS DRT since its inception and has asked schools to promote the tool.

Taken together, a prolonged loss of the IRS DRT has big implications for students and schools.

For students, it is important that they know they can still complete a FAFSA without the IRS DRT. College financial aid offices can help students who are confused or have difficulty completing the free federal application. No student should be deterred from completing a FAFSA despite the loss of the IRS DRT.

We understand that legitimate security concerns cited by ED and the IRS may have led to the tool being disabled and there will be time in the future to investigate how this issue could have been avoided. But in the meantime, we call on the Department of Education to take immediate steps to ease application and verification burdens that will fall squarely on students, potentially delaying or complicating their application process, not to mention increasing work on college campuses that could lead to delays and backlogs.

Immediate steps that should be taken by the Department of Education include:

  1. Updating and correcting FAFSA information and instructions across federal websites regarding the availability of the IRS DRT. We are pleased to see this has already begun.
  2. Allowing signed copies of tax returns from applicants to satisfy verification documentation requirements in place of Data Retrieval Tool information or IRS tax transcripts.
  3. Revising the verification selection criteria to provide a more generous tolerance to ensure that the numbers of students selected for verification remains stable and manageable by institutions so that financial aid processing can continue uninterrupted.

We appreciate the federal government’s commitment to protecting student privacy and data and look forward to working with them to mitigate the negative effect this prolonged service interruption will have on students and families.“

About NASFAA

The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 20,000 financial aid professionals at nearly 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the United States. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit www.nasfaa.org.

Publication Date: 3/9/2017


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