A Key Tool's Outage Threatens to Set Back Financial-Aid Reforms

"For years, it was the holy grail of simplifying federal financial aid: Prior-prior year," The Chronicle of Higher Education reports. "... The changes took effect just six months ago. But already, some of the promise of the switch to prior-prior-year has been lost. The Internal Revenue Service's data-retrieval tool, which families use to easily import their tax information, is out of commission. Students are facing new obstacles to accessing aid. And financial-aid experts are warning that some low-income students won't have their award packages by May 1 –– decision day for many colleges." 

"... 'If the revised version of the tool is more complicated to use or requires information that families don’t have at their fingertips, students at the margin will fall out of the process,' said Robert M. Shireman, who served as a deputy under secretary of education under President Obama.

Mr. Shireman should know. During his first year in Washington, in 2009, he helped broker an inter­agency agreement that led to the creation of the now suspended tool.

At the time, Obama officials and student-aid experts were arguing that letting applicants import information from their income-tax returns into the online application would save time and reduce transcription errors. But the Internal Revenue Service was balking at the idea, citing privacy concerns and the additional workload.

The breakthrough that occurred in 2009 was the result of 'a high-level push,' from the White House chief of staff to the IRS commissioner and education secretary, to come up with a workable solution" to sharing data, recalled Mr. Shireman, who is now a senior fellow at the Century Foundation. 'It would not have happened at all without that push.'

In the eight years since then, the tool has become the 'lynchpin' for Fafsa simplification efforts, said Karen McCarthy, director of policy analysis for the National Association of Student Financial Aid Administrators.

'We got prior-prior year because we had the data-retrieval tool,' she said. 'Having that tool down sets the whole Fafsa simplification process back years.'"

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Publication Date: 4/21/2017

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