NOTE: While this online assistance program for students and parents seeking financial aid for college still exists, it was taken offline in 2017 due to identity theft security concerns. IRS expects it to be fully operational again in the fall. Details in this post and this one, too.
School is out for the summer in most places. But if you're in college or are planning to attend one in the fall, you know that the learning process on how to pay for higher education never ends.
Most kids and their parents look into scholarships and other types of financial aid to cover the ever-growing cost of college.
And the key paperwork necessary to determine how much college aid you can get is
known as FAFSA.
That's the acronym for the Free Application for Federal Student Aid, which is the form used by the U.S. Department of Education to determine how much money a student or his/her family will be expected to contribute towards college.
All federal grant and loan awards are determined by the FAFSA, and nearly all colleges and universities rely on the document to determine whether a student is eligible for the schools' financial aid programs.
As you suspect, like most government documents, it's not easy to complete.
To calculate your Expected Family Contribution, or EFC, you must provide data on income, assets and other household information. That info is then processed by a federal processor and the results are electronically transmitted to the financial aid offices of the schools that you list on your FAFSA.
But part of completing the form has gotten a bit easier.
The Internal Revenue Service offers FAFSA applicants online access to their income and other tax return information that's required by the form.
With the FAFSA online tool, applicants can automatically transfer the required tax data onto the federal financial aid form.
This can save you and your family some time in completing the FAFSA, says FinAid.org, a nonprofit that advises students on financial aid.
The automatic transfer of tax info also may reduce the likelihood that your FAFSA will be selected for verification. That could save you time and hassle. FinAid says that college and university financial aid administrators also are strongly encouraging applicants to use the IRS Data Retrieval Tool since it will reduce their workloads, too.
To use the IRS data retrieval tool for FAFSA purposes, you must have a valid Social Security Number and FAFSA personal identification number, or PIN. You'll also need to authenticate yourself to the IRS.
And students and parents must use the tool separately for their respective income tax returns.
The IRS has created a special Web page with details on the data retrieval tool, as well as a link to Uncle Sam's federal student aid page.
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