Tool Syncing FAFSA with IRS Data to Debut in January


December 4, 2009
by Scholarships.com Staff
For students used to syncing just about every website they visit with Facebook, the amount of manual data entry involved in applying for financial aid can seem completely alien and unnecessary.  In fact, many students who would qualify for aid either fail to complete the FAFSA or do so incorrectly, due to the confusing and time-consuming nature of the application process.

For students used to syncing just about every website they visit with Facebook, the amount of manual data entry involved in applying for financial aid can seem completely alien and unnecessary. In fact, many students who would qualify for aid either fail to complete the FAFSA or do so incorrectly, due to the confusing and time-consuming nature of the application process.

Members of the higher education community were concerned about this, as well, so when Congress renewed the Higher Education Act last year, they included a provision to update the FAFSA to make it easier for families to complete. The proposed changes will go into effect in 2010, and some students could be seeing a simpler FAFSA as soon as January.

Under the new system, students completing the FAFSA on the Web will be able to automatically fill in their FAFSA with relevant information from their previous year's tax return. Starting in January, select users who click on "Fill Out Your FAFSA" will be asked if they'd like to access the IRS Data Retrieval Tool to do so. From there, they can enter their Federal Student Aid PIN then be taken to the IRS website where they can retrieve their tax information and click "Transfer Now" to automatically fill in the applicable lines on the FAFSA form. Dependent students will have to repeat this process for their parents' information.

While it still involves multiple steps and websites, the new process is a significant improvement over the current process of hunting for your tax return, begging your parents for their tax returns, sorting through pages of numbers and instructions, and carefully transcribing numbers from one form to another each year. The Department of Education hopes that the more automated and streamlined FAFSA will reduce errors and encourage more students to apply for federal student financial aid.

Only a small group of students who are filing a FAFSA for the current academic year will see the new FAFSA completion options in January. The option will be available for all FAFSA filers for 2010-2011 in July. Although you may be stuck filling out your FAFSA the old way next year, you can at least take some comfort in the knowledge that this will be the last time.

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