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CollegiateParent continues to monitor the FAFSA/IRS security breach story.
Last spring, it was announced that the information of 100,000 taxpayers who used the IRS Data Retrieval Tool to complete the FAFSA (Free Application for Federal Student Aid) may have been hacked, with the information being used to file fraudulent tax returns in order to steal refunds. The IRS has contacted the individuals at risk.
The New York Times and other news outlets covered the April 6, 2017 testimony of the commissioner of the Internal Revenue Service, John Koskinen, before the Senate Finance Committee. Read more here.
The Internal Revenue Service announced on March 9 that the IRS Data Retrieval Tool, which allows students and their parents to upload federal tax return information from the IRS directly into the FAFSA (Free Application for Student Aid), was not working.
The FAFSA must be completed by all first-time and renewing applicants for college financial aid. The same data retrieval tool is used by students applying for an income-driven student loan repayment plan at StudentLoans.gov.
The tool has been unavailable while the IRS adds necessary security protections. Here is how the revamped tool will work for the upcoming financial aid application season (academic year 2018-2019):
The solution is to "limit the information that displays to the applicant in order to enhance the security and privacy of sensitive personal data transferred to the FAFSA from the IRS. This solution will encrypt the taxpayer’s information and hide the information from the applicant’s view on both the IRS DRT [Data Retrieval Tool] web page and on the FAFSA web pages. While students and parents will still be able to electronically transfer their IRS tax return information into the FAFSA, the information will not be visible to would-be malicious actors." (Read the complete official statement here.)
The National Association of Student Financial Aid Administrators has asked the Department of Education to take steps to alleviate the burden falling on student aid applicants and their families. Meanwhile The Wall Street Journal was one of the first to report that the data retrieval tool was taken down because of "criminal activity."
Learn more about the FAFSA and how and why to apply for financial aid during college in "A Financial Aid Update for College Parents."