Education Department Relaxes Financial Aid Process in the Absence of IRS Tool
The U.S. Education Department on Monday gave colleges flexibility in verifying applications for scholarships, grants and loans while an online tool used to apply for federal student aid is out of commission.
Students filling out the Free Application for Federal Student Aid (FAFSA), the form the government and colleges use to determine financial aid, have relied on the Internal Revenue Service Data Retrieval Tool to upload tax-return information. But the IRS and Education Department disabled the tool in March after identity thieves tried to use personal information from it to file fraudulent tax returns.
To avoid delays, Lynn Mahaffie, the acting assistant secretary for postsecondary education, issued a “Dear Colleague” letter Monday directing schools to consider a signed paper copy of the 2015 IRS tax return, in lieu of the IRS tool or a tax transcript.
She said colleges and universities are also no longer required to collect documentation obtained from the IRS or other tax authorities verifying that a family did not file a 2015 tax return. Applicants must still sign a statement certifying that their families were not required to file taxes two years ago or submit a copy of W2 forms as evidence. The guidance will affect the verification requirements for the 2016-2017 and 2017-2018 FAFSA cycles.