Why a crucial FAFSA tool went dark—and what you can do about it

IRS decided to "temporarily suspend" the tool

Prospective students already struggle with the complex Free Application for Federal Student Aid (FAFSA) forms—and now a technical roadblock is further complicating the process.

Prior to this month, students filling out the FAFSA had the option to directly import tax information from the Internal Revenue Service (IRS) onto their form through an option called the Data Retrieval Tool.

The tool was helpful in that it did some of the legwork for applicants, who otherwise would need to compile old tax return papers—this can take several weeks if they need to order copies from the IRS.

But now the Data Retrieval Tool is suspended.

When the tool began to show an error several weeks ago, applicants, schools, and student advocacy organizations inquired about the malfunction to the IRS and the Department of Education. Six days later, the two agencies released a joint statement saying that the IRS decided to "temporarily suspend" the tool due to security concerns such as identity theft.

The agencies did not specify whether an actual security breach had occurred or if the measures were precautionary.

Either way, many are lamenting the awkward timing of the decision. March is the second most popular month to fill out the FAFSA, according to a report from the University of Michigan (U-M). The government organizations have not yet stated when the tool will be available again.

Without the Data Retrieval Tool, applicants will need to go through several extra steps of paperwork—which will often mean they take more time to complete the FAFSA, according to Susan Dynarski, a professor of education, public policy, and economics at U-M. Dynarksi predicts that the delays may result in many students losing their state and school financial aid, since states often have first-come-first-served aid systems, and schools often have deadlines for aid applications.

What's so difficult about the FAFSA to begin with?

What's more, students who aren't using the Data Retrieval Tool are more likely to be targeted for a verification audit that includes even more steps and more paperwork. The National Association of Student Financial Aid Administrators has asked the Department of Education to cut back on verification while the retrieval tool is inaccessible.

Lauren Asher, president of the Institute for College Access and Success, adds that the Data Retrieval Tool suspension could also affect students applying for income-based repayment plans for their student loans, since applications for these plans also require tax information.

Peter Farrell, a managing director and senior principal at Royall & Company, a division of EAB, noted in an article for Inside Higher Ed that enrollment leaders were already facing a turbulent year after changes to the FAFSA timeline. He encourages enrollment managers to "think carefully about how much weight you're ascribing to the FAFSA in your predictions this year."

Farrell acknowledges that, historically, the FAFSA correlated with a strong intent among applicants, making FAFSA activity a good method of making enrollment predictions.

But given the volatility of this enrollment cycle, Farrell suggests other factors, such as campus visits, might be better indicators this time around (Dynarski, New York Times, 3/13; Kreighbaum, Inside Higher Ed, 3/13; Farrell, Inside Higher Ed, 3/9).

With the added complication, you may need to send your students a few extra reminders to complete their forms

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