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

Understanding Financial Aid

No question about it, college is expensive. While there are still ways to make a college degree very affordable, these options are often impractical or undesirable for students and families, many of whom are looking not just for a college degree, but also a "college experience". For a lot of families, high college expenses translates to the need for financial aid. 

Financial aid comes in two main forms: Scholarships (based on merit or need) and loans (for the student, parents, or both). Families with lower incomes may also be eligible for federal grants.

For those at or above the middle-income threshold, scholarships are usually the best option to offset college costs. These days, the majority of scholarships that carry significant award amounts are given by the colleges themselves. Typically, students are considered for scholarships just by applying for admission. In some cases, colleges offer additional scholarships that require separate applications, so it is important to explore what is available. 

Outside scholarships are also available, though they usually carry smaller award amounts. Still, they can be worth applying for; if it takes an hour to write an essay for a $1,000 scholarship and you get it, you've just made $1,000 in an hour! Keep in mind, though, that many colleges reduce the amount of the loans and scholarships they offer if you receive outside funds. Check with the financial aid offices of the colleges you've applied to to learn about their policies. 

If you are applying for financial aid (and, in some cases, if you are hoping to receive just merit scholarships) you will need to submit the FAFSA, CSS Profile, or both. Check the financial aid pages of each school's website or contact their office to learn what is needed. Deadlines for these documents vary by college, but are usually in late January to mid-February. It is crucial that deadlines be met!

If you have a complex financial situation or feel more comfortable with professional financial aid guidance, there are many certified financial planners who specialize in financial aid. Most families, however, are able to navigate the process with a basic level of support. 

You can also find workshops and support in your community, often through your student's school or at the local library. Online webinars and resources are also available, including an upcoming series by Fred Amrein, a financial aid specialist who provides training to professional organizations for college consultants. Learn more here. 

Have questions about the financial aid process? I'm here to help. Get in touch and let's create a strategy to get the most out of your college dollars. 

Financial Aid Resources
Scholarship Search Engines

Fastweb

Cappex

Scholarship Monkey

Scholarships.com

College Board


Financial Aid Information

FinAid!
Forbes 2017 Guide to College Financial Aid

What You Don't Know About Financial Aid (But Should)

Paying for College: FAFSA Fundamentals

You've survived your college applications. You've filled in countless online forms, written and re-written enough essays and supplement essays to satisfy the Reflective Essay Gods for a lifetime, and managed to get your teacher recommendations in on time without being arrested for stalking or harassment. You're done! Now all you need to do is sit back and wait for those acceptance letters. Right?

Wrong! You've set your college dreams in motion, but now you need to figure out how to pay for them once they start to come true. Step 1: The FAFSA.

Read more »

Facing College Sticker-Shock

When planning for college, students and parents face two questions that can cause anxiety-attacks: Where will I get in? and How will we pay for it? The cost of higher education remains a key factor for most families in choosing an institution. Increasingly, there are also a greater number of options available to offset what can be a large financial burden.

Check out this current article on Newsweek for insight into how "merit aid" can help bring the cost of college under control.

The Future of Financial Aid

Most American families ask two questions when anticipating college for their teens: 1) Which is the best school for us?, and 2) How will we pay for it? With the cost of college tuition increasing every year, financial aid is an absolute necessity for the vast majority of students. While scholarships, grants and college savings plans can offset the cost of attendance, student loans are usually needed to cover the bulk of the cost.

The credit crisis that is currently shaking up the housing market is spilling over into the realm of student aid. Some experts see this as a positive development, providing the federal government, lenders and institutions of higher education an opportunity to seriously evaluate and make changes to a system that most acknowledge is broken. But like any systemic shift, any alterations to the current student loan program will be slow in coming. Should the changes begin with the FAFSA system? Lenders? An insistence that colleges begin to look at ways to cap costs? And in the meantime, what impact will this uncertainty have on students preparing for college in the next few years?

Inside Higher Ed offers perspectives on these issues in its article "Rethinking Student Aid--Really?" While there are currently no easy solution for the challenges of the financial aid system, it pays for those heading to college to be well informed and get the best advice possible to make sure that the road through college doesn't lead straight to the poorhouse. Tune in to the Financial Aid Podcast for up-to-date info and advice.