FAFSA IRS DRT Down Until Fall

March 30, 2017

By Carrie Warick, Director of Policy and Advocacy 

Update (March 31, 11:20 a.m.): The DRT option has been disabled within the FAFSA. Federal Student Aid has posted professional resources at this page, which will be updated.

Today, the U.S. Department of Education (ED) and the IRS issued a joint statement saying the IRS Data Retrieval Tool (DRT), used to automatically populate tax information into the Free Application for Federal Student Aid (FAFSA) and the application for income-driven student loan repayment plans, will be down until “the start of the next FAFSA season,” which is Oct. 1, 2017. The statement said the agencies are taking this action “to protect sensitive tax payer data,” and that the tool will return after “extra security protections can be added.”

ED and IRS should take two immediate actions in the short term to make FAFSA filing easier for students:

  1. Provide clear direction on FAFSA.gov for how to complete the form without the DRT. This includes disabling the DRT option within the FAFSA and adding instructions for how to answer the financial questions using a tax transcript, which does not have numbered data fields as tax return forms do.
  2. Provide relief for the burdensome verification process for students, as recommended by NASFAA.

ED and the IRS should use the next six months to enhance security in a way that does not prohibit low-income individuals from accessing the IRS DRT in the long term. As the end of the joint statement makes clear, the IRS is still figuring out which taxpayers may be victims to possible abuses of this tool. It is crucial to secure the tool, but doing so in a way that cuts off access for low-income students would defeat the goal of the DRT.

When the IRS relaunched its Get Transcript tool after 54 weeks offline following a 2015 cyberattack, the updated security requirements mandated that users have a mobile phone in their name and one of the following loans or lines of credit: mortgage, home equity line, auto loan, or credit card. The financial requirements are used to conduct a soft credit check, and the cell phone used to text a code to your phone. It is harder for low-income families to access credit, so this type of security increase to the DRT could alienate the very students who can most benefit from the FAFSA and IDR plans. Consider:

  • Only 38 percent of families in the lowest income quintile owned their homes in 2014.
  • Car ownership varies greatly, particularly in cities, both large (56 percent of New York City families do not own cars) and smaller (31 percent of families in Reading, PA don't own one).
  • 28 percent of Americans do not own a credit card, with 70 percent of college students lacking one.
  • While 92 percent of adults do use a cell phone, 24 percent of the cell phone market is pre-paid or pay-as-you-go phones, which also do not qualify for Get Transcript tool purposes.

The IRS DRT must be available for low-income families and also for students who file their own taxes. Even if parents can meet the type of security requirements detailed above, a student who must file taxes would also need to access the DRT independently of their parents. A dependent student is especially unlikely to be able to meet these types of requirements, given the low rate of credit-card usage among college students and the IRS rule that the cell phone -- in addition to not being pre-paid or pay-as-you-go -- must be in the filer’s name, which disqualifies family plans.

It is vital that the identities of taxpayers and our students are protected. While these security updates will take this long, knowing in advance that the tool will not be available until the fall will help students, college access advisors, and financial aid professionals adjust accordingly. NCAN encourages our members to continue following our advice from early March for the remainder of the FAFSA season: Tell students to start the FAFSA immediately if they have not already done so, and request a tax transcript as soon as possible, even if you have a copy of tax return.

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