The Office of Financial Aid has been monitoring the implications of the IRS’ sudden decision to discontinue its Data Retrieval Tool, a web function that simplifies the process of providing tax information. The tool removal could pose hurdles for current and prospective Yale students applying for financial aid, as they now have to manually enter tax data rather than the process being automatic.
The Data Retrieval Tool is crucial for gathering information to include on the Free Application for Federal Student Aid, which determines a student’s eligibility for federal grants or loans and is a necessary part of financial aid applications at most U.S. universities, including Yale. The IRS Data Retrieval Tool automatically links a student’s or their family’s tax information from the IRS to the FAFSA form, obviating the lengthy and complicated process of manually inputting tax data. Since March 3, however, students trying to use the IRS tool were told that the service is unavailable due to “system maintenance.” Yet, the IRS and the Department of Education attributed to the tool’s removal to identity theft concerns in a joint statement released on March 9.
“As part of a wider, ongoing effort at the IRS to protect the security of data, the IRS decided to temporarily suspend the Data Retrieval Tool as a precautionary step following concerns that information from the tool could potentially be misused by identity thieves,” the joint statement read.
The tool outage will continue to be down for several weeks, according to the joint statement. Director of Undergraduate Financial Aid Caesar Storlazzi said it is unclear when the tool will be back, and that he and his team are “watching this closely.”
“We don’t think this will cause any undue problems for any students or families,” Storlazzi said.
Storlazzi said his office has not changed their application deadlines for students and families because they are still able to complete their FAFSA manually online. Storlazzi also noted that the instructions for obtaining the alternative mode of providing tax information, the IRS Tax Return Transcript, is on the Yale Financial Aid Office’s website.
In addition to the removal of the tool, for the first time this year the FAFSA is requiring proof of nonfilers — parents or students who did not file tax returns — for three in 10 students chosen at random.
Erin Timmons, director of communications at the National Association of Student Financial Aid Administrators, said financial aid applicants who used the Data Retrieval Tool were less likely to be selected by the Department of Education for verification, which she described as “a sometimes cumbersome process.”
“Since the data retrieval is down at the moment, schools’ financial aid offices will likely have to conduct more verifications, which could lead to delays and backlogs for students who are waiting on financial aid awards,” Timmons said.
She noted that some states, like Texas and Indiana, have pushed back their deadlines for state financial aid so that students do not miss out on valuable state aid due to the data retrieval tool outage.
Some lawmakers see this outage as putting many students and families in an unfair position. Indeed, a bipartisan group of federal lawmakers wrote to Education Secretary Betsy DeVos demanding an explanation and requesting that the problem be resolved as soon as possible.
“The loss of the [tool] could discourage many eligible low-income students from applying for aid … altogether,” the letter read, which was signed by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., and Reps. Virginia Foxx, R-N.C., and Bobby Scott, D-Va., the heads of the Senate and House committees on education.
In the same letter, these lawmakers also asked for a briefing with DeVos to find out what steps the department is taking to remedy the situation.