College Access Complicated by IRS Identity Protection Move

Mar 11, 2017 by

by Leo Doran –

The Internal Revenue Service pulled the plug on an online tool that streamlines parent and student completion of federal student aid forms without giving advance warning, according to college access advocates. Millions of students use the system every year, according to federal statistics.

The IRS Data Retrieval Tool allows federal aid applicants to automatically transfer their tax return information into the Federal Application for Student Aid (or FAFSA) form. Students first reported problems with the IRS’s software Friday, March 3rd when an error message on the agency’s website said the tool was down due to “system maintenance.”

Over the past week, pressure mounted on the Department of Education and the IRS to offer an explanation. On Thursday, Rep. Lloyd Doggett, D-Texas, sent a letter urging the agencies “investigate and rectify” the issue. As Doggett’s letter noted, early March is a particularly bad time for technical problems in the student aid process. Numerous states, including Texas, have FAFSA deadlines coming up in the next few weeks.

Later, on Thursday, the education department and the IRS issued a joint statement that explained: “the IRS decided to temporarily suspend the Data Retrieval Tool (DRT) as a precautionary step following concerns that information from the tool could potentially be misused by identity thieves.” Neither the IRS, nor the Department for Education would comment further on the nature of the identity theft problem that led to the suspension of the Data Retrieval Tool.

According to the statement, the Data Retrieval Tool is expected to be down “for several weeks.” The agencies assured Americans that “this does not limit families’ ability to apply for aid.”

Austin Buchan, the CEO of College Forward in Texas, a state that has a March 15th priority deadline for FAFSA completion, said the technical disruption “is going to complicate our lives pretty significantly.” College Forward is an Austin-based nonprofit that assists underserved students in securing a college education.

Buchan said the government is forcing students to “switch horses mid-stream,” and lack of access to the online tool will “add confusion” to a process that is already highly complicated. Buchan said he expects numerous students in his state to end up missing the March deadline, which could increase the likelihood of their not receiving all of the federal benefits they are entitled to. The situation is even more dire in Indiana, where the state’s priority FAFSA completion deadline is March 10th.

To manually complete the portions of the FAFSA form that the Data Retrieval Tool would ordinarily automatically populate, families need copies of their 2015 tax returns on hand. For those that do not have their tax records immediately available, transcripts can be obtained online or by mail.

Carrie Warick, the director of policy and advocacy for the National College Access Network, argued that both work-around solutions are imperfect. Accessing tax records online is particularly difficult for low-income families because of identity confirmation requirements, and the mailing process can take up to ten business days—which is not viable for students facing deadlines as early as March 10th or March 15th, she said.

Furthermore, manual entry of a family’s financial information puts a student at greater risk for a process called “verification,” said Warick. Verification is like an audit of the information on a student’s FAFSA form, and requires additional paperwork that poses yet another obstacle to affordable college access, she said.

Federal data from 2015 to 2016, suggests that over 7.4 million, or about 38 percent of the 19.8 million students who filled out FAFSA forms during that aid application cycle used the IRS’s Data Retrieval Tool. Prior to the system’s malfunction, college access advocates were hoping that changes intended to make the federal aid system more user-friendly would drive up use of the tool this year.

Instead, the technical problems came as a complete surprise to the college access nonprofits around the country that Warick’s organization represents in Washington, including Buchan’s College Forward. At a minimum, Warick said stakeholders should have received advance notice from the education department or the IRS that there was a looming problem with the tool.

“It’s caused a week of scrambling,” she said.

Source: College Access Complicated by IRS Identity Protection Move – InsideSources

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