This week, the Department of Education shared new information about its plans to restore access to the IRS Data Retrieval Tool (DRT), a tool that helps millions of students and borrowers easily transfer their tax information into the online FAFSA and the online application for income-driven repayment (IDR) plans for federal student loans. The tool has been unavailable for more than two months after being taken offline due to security concerns. Facing pressure from governors, legislators, colleges, financial aid professionals, and student advocates, the Department has committed to getting the tool secured and back online by the end of this month for the over four million borrowers who use it for IDR. However, the Department and IRS will not have the DRT back up for FAFSA use until the next application year starting in October, an extended outage that will continue to affect millions of students.
The DRT will be restored for student loan borrowers by the end of May. We thank the Department for committing to this timeline, since new data show that about 4.5 million borrowers use the DRT to apply for IDR plans or annually update their income information in those plans. As detailed in our earlier blog post and a recent MarketWatch piece, the DRT outage is more than just an inconvenience for borrowers. While the DRT is down, borrowers with taxable income cannot complete the process of applying for IDR or updating their income online at StudentLoans.gov. Borrowers who miss annual deadlines to update their income information can face unaffordable spikes in monthly payment amounts that increase their risk of delinquency and default, as well as interest capitalization that can add substantial costs.
Students still applying for financial aid for the upcoming 2017-18 year will not have access to the DRT at all. This extended outage will impact millions of students, as more than half of all aid applicants (more than 11 million students) applied for aid on or after April 1 in recent years. Many of these applicants used the DRT, and a greater share were expected to use it in 2017-18 due to recent improvements to the FAFSA timeline.
For students applying for federal financial aid for the 2018-19 year, the Department and IRS are on track to restore access to the DRT by the time the FAFSA opens on October 1, and to do so in a way that protects access for low-income students. This is encouraging news, particularly since new data show that roughly half of all FAFSA filers use the DRT to transfer tax information from the IRS. As discussed in our earlier blog post, the DRT outage is causing millions of students to face a more complicated, daunting, and time-consuming process to apply for aid. Delays in that process can prevent students from getting their financial aid in time to enroll in college.
Given the importance of the DRT in helping students access financial aid and manage their loan payments, we echo the National College Access Network’s statement that the DRT outage “is an emergency, not a mere inconvenience.” It is essential to quickly restore the DRT in a way that balances student access and data security.