IRS Data Retrieval Tool Returns to FAFSA

Families who plan to file the FAFSA (Free Application for Federal Student Aid) for the 2018-19 academic year may find the process easier this year, thanks to the relaunch of the IRS Data Retrieval Tool. After being shut down last spring following ID hacking that may have put up to 100,000 tax payers at risk, the tool has been revamped to address security issues. Starting October 1, families can use the tool to upload their tax information for 2016 directly from the IRS to their FAFSA, saving time and the potential headaches of entering data by hand.

As part of the new process, the exact income numbers from filers returns will be "masked" once they have uploaded. The data fields on the student aid report will simply say "transferred from the IRS". This new data security measure is worrying to some, who are concerned that potential errors in their tax returns that they are unable to see on the FAFSA could damage their eligibility for financial aid. If accuracy is a worry, however, entering data by hand directly from returns is still an option.

Whether you decide to utilize the Data Retrieval Tool or not, it's a great idea to get started on your FAFSA as soon as the site goes live on October 1. You'll be well ahead of submission deadlines and you'll be able to determine your family's expected family contribution toward college costs prior to submitting college applications, which can be valuable if you are trying to adhere to a budget and want to be sure your college choices are affordable.

Want to learn more about financial aid for college? Check out my previous blog posts on understanding financial aid and tips for planning a successful financial aid process. Additionally, here are some useful links to help you navigate financial aid.

FAFSA 

Expected Family Contribution Calculator

How Federal Student Aid Is Determined

Smart Tips for College Financial Planning

For many families, the cost of a college education today is daunting. The total cost for a year at a CSU is now around $26,000; at a UC, $33,000; and many private colleges have sticker prices of $40,000 or more. 

To help manage college costs and make informed financial decisions, I recommend families do three things: 

• Plan ahead
• Set clear priorities
• Understand actual costs

Planning ahead means not just saving money for college, but understanding early on what the cost of college is likely to be and how much financial aid through scholarships and loans your student can expect to receive. You can get a head start by using the FAFSA Forecaster to determine how much colleges expect you to pay toward the cost of college (your Expected Family Contribution). Knowing your EFC can help you estimate what your actual costs will be at various colleges and use this information to make smart choices about where to apply. 

Setting clear priorities early can also help guide a successful college search. What are the top three to five things that matter to your student and family? If cost is one of those factors, be sure to make it a priority in your search. Looking only at schools that are within your financial parameters or that you can reasonably assume might be with the assistance of scholarship dollars can help you avoid disappointment and wasted time. 

Understanding the actual cost of colleges can be tricky. While at a public college you can generally expect to pay close to the "advertised price" (most public colleges offer few scholarships), the actual cost of a private college can vary widely and is usually far less than their "advertised price" (thanks to plentiful scholarship offerings). But many other factors such as graduation rates, travel costs, and extremely varying costs of living at certain campuses also impact the overall total cost. 

In an effort at transparency, colleges now provide a net price calculator to help families get an estimate of the total cost of attendance based on the college's financial aid policies. These tools are very helpful and can easily be found on the financial aid page of college's websites. 

If you need help navigating the complex world of college financial planning, I provide basic guidance on the necessary forms and timelines as part of my comprehensive packages. For families in need of more extensive guidance, I offer three options to provide you with in-depth understanding of the financial aid process and your expected costs, detailed financial comparison of various colleges and expected scholarship dollars tailored to your specific situation, and much more. I'm happy to work with your family to make college a rewarding and affordable experience!