This News Could Affect Your Student Loans

"If you turned off the news, ignored the notifications on your phone or simply couldn’t keep up the past few weeks, it’s time to catch up on some major events in higher education financing," according to Nerd Wallet.

"Here’s a rundown of the news that affects anyone applying for, and many of those paying back, student loans, and what to do if you’re one of them. ...

2. IRS Data Retrieval Tool goes offline
The news: The IRS Data Retrieval Tool allows for the automatic transfer of income data into both the online Free Application for Federal Student Aid, known as the FAFSA, and the Income-Driven Repayment Plan Request form. In early March, the tool became unavailable. The Education department and the IRS said in a joint statement on March 9 that use of the tool was suspended 'following concerns that information from the tool could potentially be misused by identity thieves.' It will be offline for several weeks, according to the department.

The background: The FAFSA is known for its complexity. But since the IRS Data Retrieval Tool became available in 2010, students and families have made fewer errors on the form and have filled it out in less time, according to a statement by the National Association of Student Financial Aid Administrators. Applicants for income-driven repayment plans, and those already enrolled who must recertify their income annually, also rely on the tool to complete their forms quickly and accurately.

What it means for you: If you haven’t yet completed the FAFSA, don’t wait for the tool to come back online to do so. Failing to submit it means losing access to federal financial aid — including loans, grants and work-study — and, potentially, aid from states and schools. Some funds are also first come, first served, so the sooner you submit the FAFSA the more aid you may receive.

Without the IRS Data Retrieval Tool, students and families must manually enter their 2015 tax information using their tax returns. Ask your tax preparer for a copy, or download it from the tax return software you used. The National College Access Network also advises FAFSA filers to request a copy of their official tax return transcript. You may need it if you’re selected for a process called verification, which confirms the accuracy of the information on your FAFSA. In 2014-15, the Department of Education asked 26% of FAFSA applicants to complete the verification process, according to a November 2016 report from the Institute for College Access & Success."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 3/22/2017

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