IRS changes making federal student aid application more difficult

Mar 31, 2017

For hundreds of thousands of prospective college students, the most important paperwork may be the dreaded FAFSA form, the pathway to federal financial aid. Now, a change at the Internal Revenue Service is making that process more complicated.

The Free Application for Federal Student Aid allows a college to form an opinion about the financial situation of a student being considered for admission. Its core is income and taxation.

Credit FAFSA

Students used to be able to get 2015 income through a website run by the IRS and it would automatically fill in the FAFSA. However, the IRS shut down that site earlier this year, claiming identity theft issues.

"I understand that it went down because of security issues, so, ultimately, what that means is that families are going to have to enter their tax information manually," says Nathan Daun-Barnett, an associate professor of Higher Education Administration at the University at Buffalo. "That had been common in the past until the past year or so, but it's certainly a challenge for some families to dig out the past tax forms. I would say that those that file manually may need to produce their tax transcript in the verification process at their college. I think this is common. That happens all the time."

Daun-Barnett says this has made completing FAFSA more difficult. He also says there is a different, but related problem for many Buffalo students whose families do not make enough money to file taxes.
 

Credit FAFSA

"Many of our families legitimately weren't filing taxes to begin with because they didn't have W-2 based forms of income or they weren't working at all. So they might be on disability or might be on Social Security," he says. "We had to go through a different documentation process for them anyway. This hasn't really affected them and we think that's probably about 15-20% of the students we work with in the district."

Daun-Barnett is on sabbatical this semester and working with Say Yes Buffalo on its application process and FAFSA. He says because Say Yes starts the process in the late fall, many other students and parents had actually filled out the form before the IRS shut the web site.

"We'll do about 1,000, almost 1,100 FAFSAs a year, just in Buffalo Public Schools and another 250 in the charter schools," he says. "We're already about three-quarters of the way there because of the early applications start."