The FAFSA was already hard—and for the next 6 months, it will be even harder

Federal agencies cite taxpayer security as reason behind suspension

Students trying to fill out their FAFSAs were surprised earlier this month when the Internal Revenue Service (IRS) suspended its Data Retrieval Tool. 

Without the tool, applicants will need to go through several additional steps of paperwork—further complicating a process that's already confusing.

On Thursday, the Department of Education and the IRS issued a joint statement saying that the tool will be out of commission until October.

The Data Retrieval Tool allows students filling out the FAFSA to directly import tax information from the IRS onto their form, rather than manually retrieving old tax return papers—a process that can take several weeks if they need to contact the IRS for copies.

Without the Data Retrieval Tool, completing the FAFSA—an already cumbersome and confusing task for students—becomes even more of a struggle. Experts point out that:

  • Entering tax data manually leaves more room for error, which could make students more likely to be targeted for a verification audit from the IRS;
  • Students who need longer to complete are at risk to lose state and school financial aid, often awarded on a first-come-first-served basis; and
  • Longer completion times could cause students to miss paperwork deadlines.

What's more, students applying for income-based repayment plans for student loans will also face difficulty completing forms without the Data Retrieval Tool—which could mean missed deadlines and higher monthly payments.

What's so difficult about the FAFSA?

When the agencies first disabled the tool, they cited security reasons, but did not specify whether an actual security breach had occurred or if the measures were precautionary.

It has since been revealed that identity thieves had attempted to steal personal information from the FAFSA's Data Retrieval Tool to file tax returns.

John Koskinen, the IRS Commissioner, announced in a statement: "While this tool provides an important convenience for applicants, we cannot risk the safety of taxpayer data... protecting (this) data has to be the highest priority."

But Justin Draeger, president of the National Association of Student Financial Aid Administrators, says the agencies have not adequately publicized the setback. He points out that the government website,, does not currently mention the tool's outage and that many students filling out the FAFSA are still being directed to the disabled tool.

In the wake of the tool's suspension, many admissions and federal aid officials have expressed concerns about what it means for students—and have even circulated a petition to "ease application demands that could lead to delays and backlogs for students during the outage."

"Everything that makes the process harder makes it less likely that people are going to make it all the way through (the FAFSA process)," says Lauren Asher, president of the Institute for College Access and Success.

John Nelson, an EAB expert on financial aid, agrees. "The loss of the IRS DRT will make it much harder for all students, but especially non-traditional students, to file for aid," he tells the EAB Daily Briefing. Nelson explains that non-traditional students tend to fill out their FAFSA in the late spring or even summer for a fall start. Nelson adds that continuing and returning students also tend to file their paperwork a little later in the spring, and the extra steps required to complete the FAFSA without the IRS tool may take them by surprise.

Nelson encourages colleges to reach out to students who haven't yet filed their aid paperwork.

"In terms of student success, one of the most important things an institution can do is ensure that students continue to receive their full aid package, which the loss of the IRS DRT makes more difficult," Nelson says. EAB research has shown that relatively small reductions in a financial aid package can elevate student attrition.

"Many institutions' aid budgets are first-come, first-served. The later a student files, the less aid they are likely to receive," Nelson points out (Douglas-Gabriel, Washington Post, 3/30).

You may want to send your students a few extra reminders to complete the FAFSA on time

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