Feds Pull Financial Aid Tool After Potential Data Breach

"Families applying for federal student aid are facing extra hurdles this year after a potential data breach led federal officials to remove an online tool that smoothed the process," the Associated Press reports.
"The Education Department and the Internal Revenue Service said Thursday that an online service known as the Data Retrieval Tool will stay offline for the rest of this application season. In the past, families could use the tool to import their tax information automatically to the Free Application for Federal Student Aid, a complex form needed to get federal aid.
Now families filing the form will have to fill out their tax information manually using old tax returns, an obstacle that some education experts fear will deter families from filing.
'It's not impossible, but it it's going to make it more difficult,' said Justin Draeger, president and chief executive of the National Association of Student Financial Aid Administrators. 'Not everybody has access to their prior year's return.'
Federal officials unexpectedly removed the online tool in early March, at a time when many families across the U.S. were applying for aid. The IRS later said they shut it down because identity thieves may have used personal information "obtained outside the tax system" to access the online tool in an attempt to steal further data. ...
The tool's absence could cause extra work for colleges, too. The IRS routinely asks campuses to verify the tax information on the form from certain students as a security measure. In the past, students who didn't use the online tool were more likely to be selected for extra verification, Draeger said. Some colleges have already noticed an increase in verification requests this year.
'If nobody is using the IRS data retrieval tool, it's unclear whether this is going to throw a wrench into their income verification modeling,' Draeger said."
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: 3/31/2017

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