"Ongoing disruptions at the Internal Revenue Service are hindering college students from receiving federal student loans and grants, university administrators say, though federal officials deny it is related to the partial government shutdown," The Washington Post reports. 

"The disruptions, which make it harder for some families to provide proof of their income, could block Pell grants, student loans, parent PLUS loans and other forms of federal financial aid from reaching students. The problems potentially could prevent them from enrolling in spring classes or selecting an affordable school for the coming academic year, according to aid experts.

... Typically, some needy applicants are allowed to import their tax records directly from the IRS into their financial aid applications — a data service that remains up and running. But many more do not qualify for that feature and are required to fill out their forms manually. That can lead to complications and requests by the government for further income verification.

In these cases, families can verify their income using IRS tax transcripts. They can still request a transcript by phone or mail — which takes two weeks — but the system that takes online requests has been down since at least Jan. 2. Aid counselors say their offices are bracing for an influx of anxious students who cannot pay their tuition bills.

... Matt Leas, a spokesman for the IRS, said the tax transcript system is inaccessible because of routine maintenance and should be back up and running around Jan. 14. The Department of Education also said it is aware of the issue.

But financial aid officials say that in a break from typical procedure, the government did not provide advance warning of the coming outage, leading to suspicions the shutdown could be partly to blame, according to Justin Draeger, president of the National Association of Student Financial Aid Administrators. The Education Department also did not explain why the outage would last for so long, he said.

'I don’t have a smoking gun, but given the IRS is unfunded, something seems not right here,' Draeger said. 'We don’t recall this service going down like this, particularly in the beginning of the calendar year.'

The IRS declined to comment further on the matter.

... In November, the Education Department said it would relax the verification requirement by accepting signed copies of tax returns instead of the tax transcript. But the agency has yet to issue any guidance on the matter to schools. 'If the Department would release its guidance that would allow students to use alternate forms, that would also solve a lot of the challenges,' Draeger said. 'For some students, their disbursements are contingent on this.'"

NASFAA's "Notable 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: 1/9/2019