Brocker.Org: FAFSA Tax Info Tool Disabled – Should Be Fixed by Oct. 1

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Due to security concerns the Internal Revenue Service has disabled its Data Retrieval Tool (DRT) used to import tax information into the Free Application for Federal Student Aid (FAFSA). The DRT is not expected to be available again until the “start of the next FAFSA season, in Fall 2017.” However, you can still fill out and submit a FAFSA. (See below for additional information.)

If you are a high school senior or a college student, planning to file a Free Application for Federal Student Aid (FAFSA) for 2017–18, you can add a new date to your fall calendar: Oct. 1.

That’s the earliest date you can file the FAFSA, and it is three months earlier than in the past.

Use Earlier Tax Information

In addition, you can now use tax information from an earlier year (2015, for the 2017–18 FAFSA). In the past, tax information had to be from the most recent year.

That would have been impossible for prompt filers under the new rules since income taxes for 2016 cannot even be filed until Jan. 1, 2017 (Jan. 20, for most people, who file electronically). Again the 2017-18 forms require your 2015 tax data, according to the Department of Education. You’ll need your 2016 data for the 2018-19 forms, but those you can’t start filling out until Oct. 1, 2017.

Reasons for the Changes

The new rules, first announced last September, were put into place to simplify the process of applying for student aid and to encourage more students to apply.

The website Edvisors noted that in 2011–12, the most recent year for which data were available, nearly 2 million eligible students did not file a FAFSA leaving $9.5 billion in Pell Grants unclaimed.

Requiring earlier income tax information not only avoids the problem of not having filed taxes yet, but also makes it likely you can use the IRS Data Retrieval Tool (DRT) – when it’s back in operation – to import tax information and further simplify the application process.

Earlier application gives you more time to review financial aid options, seek alternative aid or merit awards and apply for federal loans – all of which may require a FAFSA.

Finally, state and university deadlines vary widely and the new open date decreases the chance you will lose out on aid by missing a local deadline.

For more information, see An Introduction to Student Loans and the FAFSA and A Quick Guide to How FAFSA Loans Work.

Alternatives To The DRT

Until the IRS Data Retrieval Tool (DRT) is back online, you can provide the requested financial information manually using a copy of the appropriate tax return.

If you don’t have a copy of your tax return, visit www.irs.gov/transcript where you can view and download a summary known as a tax transcript. You must verify your identity to use this online tool. There’s also an option to Get Transcript by MAIL or you can call 1-800-908-9946 to have a transcript delivered to your address of record within five to 10 days. For more see: IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications

The ‘File Once FAFSA Act’

Simplification could get another boost if the new Congress reintroduces an amendment proposed in the previous session titled the “File Once FAFSA Act of 2016.” It was referred to committee on July 14, 2016, and never got any further.

Under this proposed legislation, if you were a dependent student, you would only be required to submit a FAFSA once during your undergraduate course of study – instead of every year as is now required.

Each year you would certify that you are still a dependent student and whether your circumstances have changed significantly. If they have, you may be prompted to refile your FAFSA or seek a new ruling from your financial aid administrator.

Meantime, see 5 Ways to Get Maximum Student Financial Aid for more on getting funded for college.

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