Last week, the Internal Revenue Service (IRS) and Federal Student Aid (FSA) announced that the Data Retrieval Tool (DRT) on fafsa.gov and StudentLoans.gov will be unavailable until extra security protections could be added. Since 2010, students have been able to use the DRT to transfer tax data directly into the Free Application for Federal Student Aid (FAFSA). In early March, the DRT was disabled after it was discovered that identity thieves may have used personal information obtained outside the tax system to access the FAFSA form in an attempt to obtain tax information. The IRS is continuing to investigate whether this use of the tool contributed to fraudulently filed tax returns.
While the IRS identifies taxpayers whose personal information may have been at risk, it is marking and locking down those taxpayer accounts in order to prevent fraudulent tax return filings. Currently, the IRS is finalizing plans to notify affected taxpayers about identity theft concerns. The IRS has not yet determined the scope of affected taxpayers.
In the meantime, students will have to manually enter 2015 tax information into the FAFSA form. Borrowers applying for the income-driven repayment (IDR) plan will need to submit alternative documentation of income to their federal loan services after completing and submitting the online IDR application.