Since March, the IRS Data Retrieval Tool has been unavailable to students. An essential tool for people completing the Free Application for Federal Student Aid (FAFSA) or applying for an income-driven repayment (IDR) plan, its absence has affected millions of students.
Although the government reinstated the tool for IDR plan applications June 2, it has remained unavailable for FAFSA applications. However, the U.S. Department of Education announced the IRS Data Retrieval Tool will go live Oct. 1 for the 2018-2019 FAFSA application.
Its reappearance can help you get the federal financial aid to which you’re entitled, but there are some big changes you need to know about.
What is the IRS Data Retrieval Tool?
When you apply for financial aid on the Federal Student Aid (FSA) website, you’re asked to enter your family’s income and assets. The amount you enter must match your family’s tax return exactly. If you estimate or give a ballpark figure, the FSA can deny your application.
The IRS Data Retrieval Tool eliminated the need to dig up paperwork and last year’s returns. Instead, it automatically pulled your information and entered your income and assets on the form. Without the tool, you must enter the data by hand, increasing the risk of errors.
Why was it removed?
The IRS and FSA disabled the tool because of privacy and security concerns. Both organizations feared computer hackers and identity thieves could use it to access personal information and tax returns. In a statement, the IRS and FSA said the tool had to be removed until they could bolster the system’s security.
Criminals could start a FAFSA application and allow the IRS Data Retrieval Tool to enter the corresponding information, which gave them the family’s adjusted gross income. They could use that data to access tax returns and then file false returns to get tax refunds.
The backlash was significant. Members of Congress sent a public letter to Betsy DeVos, the secretary of education. Schools and nonprofit organizations also decried the removal, stating it would make getting financial aid more difficult, especially for low-income and first-generation students.
How will it affect your FAFSA application?
To address the security concerns, the FSA and IRS implemented changes. The new version of the IRS Data Retrieval Tool will limit the information applicants can see. The system will encrypt sensitive data and hide the information from the user’s view on the FAFSA site and in the IRS Data Retrieval Tool.
Both the FSA and IRS acknowledged this change could be uncomfortable for some users. Because the data surrounding income isn’t visible, applicants have no way to verify the amounts or make corrections. For now, this drawback is considered necessary to prevent criminal activity. The FSA and IRS might make more updates in the future.
What if I need to verify my information?
If the idea of not being able to see and correct information is uncomfortable for you, there are some alternatives. No one is required to use the IRS Data Retrieval Tool. Instead, you can use the following methods:
- Use digital or paper tax returns: If you have access to your family’s tax return, either online or as a hard copy, you can use it to find the necessary information. The return will list your adjusted gross income, which you can enter on the FAFSA.
- Request a tax return transcript: If you don’t have access to your tax return, you can request a tax return transcript. The transcript isn’t a full return, but it does include enough information to complete your FAFSA manually.
Applying for federal student aid
Although the changes to the IRS Data Retrieval Tool might not be ideal, you should complete the FAFSA as soon as possible to get the financial aid you need. You can use alternative methods to enter your information if necessary, but applying early ensures schools will consider you for grants and other aid.
For more information about getting financial aid, our complete guide on finishing your FAFSA on time can help.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Rates (APR)||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!|
|2.75% - 7.24%||Undergrad & Graduate||Visit SoFi|
|2.57% - 6.39%||Undergrad & Graduate||Visit Earnest|
|2.57% - 7.12%||Undergrad & Graduate||Visit CommonBond|
|2.99% - 6.99%||Undergrad & Graduate||Visit Laurel Road|
|2.74% - 7.26%||Undergrad & Graduate||Visit Lendkey|
|2.89% - 8.33%||Undergrad & Graduate||Visit Citizens|
Student Loan Hero Advertiser Disclosure
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.