FAFSA student aid form available, along with IRS data tool

Students and families seeking financial help for college will notice some possibly confusing changes this fall when they fill out an important federal form known as the FAFSA.

The FAFSA, for Free Application for Federal Student Aid, is the main portal to federal financial help for college students, including grants and low-cost student loans. States and many colleges also use the FAFSA to screen students for their own financial aid.

Many students and parents fill out and file the FAFSA online because that allows them to automatically transfer income information into the form using the Internal Revenue Service's Data Retrieval Tool. The tool had been unavailable for FAFSA filing since March, after the IRS abruptly suspended it because of security concerns.

This week, the federal Department of Education said the tool had been returned to service for the 2018-2019 FAFSA filing season.

The IRS tool now has "extra security and privacy protections to safeguard sensitive taxpayer data," the department said.

In practice, that means the online form will look different to filers as they fill it in. Specifically, applicants transferring financial information using the retrieval tool cannot see the actual tax return data in their online FAFSA.

The Education Department said that instead of the transferred numbers, "applicants and parents will see the words 'Transferred from the IRS' in the data entry fields throughout the online FAFSA form."

If any changes are needed — if, for instance, a family's income has changed drastically since the tax return was filed — students must contact the financial aid administrator at the college to which they are applying.

Justin Draeger, president and chief executive of the National Association of Student Financial Aid Administrators, said that while the situation wasn't ideal, having masked data was better than not having the retrieval tool at all. That's because the information transferred from the IRS is generally accurate.

Financial aid administrators are aware that families may have questions about the form, Draeger said, and are expecting increased calls.

"They will always do whatever they can," he said, "to help students apply for financial aid."

Students and their families should also be aware that after using the retrieval tool, they may receive a letter in the mail from the IRS notifying them that their tax information has been transferred, said Diane Cheng, associate research director at the Institute for College Access and Success. Official IRS notices tend to make recipients nervous, she said, but the letters are simply another step to increase security.