FSA ID ENHANCEMENTS FOR NEXT GEN FINANCIAL SERVICES ENVIRONMENT

Last month the Department made additional enhancements to the FSA ID. The enhancements were made as part of the Next Generation (Next Gen) Financial Services Environment FSA has been implementing. The FSA ID is used by students, parents and borrowers to access websites like FAFSA.gov, StudentLoans.gov, NSLDS Student Access, StudentAid.gov, and the myStudentAid mobile app. The FSA ID is also required for access to the Application for Borrower Defense to Loan Repayment and the Federal Student Aid Feedback System.

According to a recent electronic announcement from FSA, the following enhancements were made on May 19th.

Require verified email address or mobile phone number. New FSA ID users will be required to provide either a verified email address or mobile phone number when creating an FSA ID account. Existing FSA ID users who do not already have a verified email address or mobile phone number will be prompted to provide one when logging in for the first time after implementation of this change. This enhancement ensures FSA ID users can manage their account more effectively and helps us stay in contact with FSA ID users as needed. As a reminder, a verified email address or mobile phone number can be used to log in, reset a password, retrieve a username, or unlock an FSA ID account.

Replace Create-Your-Own Challenge Questions with Pick-From-List Challenge Questions. FSA ID users must answer four challenge questions when creating an FSA ID account. The answers to the challenge questions may be required to verify the user’s identity and are an important security feature. Currently, FSA ID users select two challenge questions from a list of questions and create two challenge questions on their own. To streamline the process for users, we will remove the create-your-own option. Users will select all four required challenge questions from a list.

Add Editable Summary Page to the Create Account Process. Users will have the option to edit the summary information that is presented at the end of the process to create an FSA ID. If a user identifies an error, he or she may edit and save the information directly on the summary page, rather than having to go back to correct the information on a prior page.

IRS ANNOUNCED UPDATED TAX TRANSCRIPTS REDACTING SENSITIVE INFORMATION

As we reported last month, the IRS recently announced that as of September 23, the individual tax return transcript(s) was replaced with an updated version that redacts sensitive personal identifying information of the tax filer. These changes are part of an effort to continue to combat stolen identity refund fraud, and to protect taxpayer information.

At the end of the current calendar year, when taxpayers or third parties call the IRS with a transcript request, the transcript will be mailed to the taxpayer’s address of record. The transcript will not be faxed on request to either the taxpayer or a third party.

According to a recent electronic announcement from FSA here’s what’s changed on the IRS Tax Transcripts

As part of the verification process, students (and if applicable their spouses or parents) may be required to submit to institutions a copy of their income and tax information via a tax transcript. The IRS has announced that with the launch of the new tax transcripts the following information will now display:

  • Last 4 digits of any SSN listed on the transcript (e.g. XXX-XX-1234)
  • Last 4 digits of any EIN listed on the transcript (e.g. XXX-XX1234)
  • Last 4 digits of any account or telephone number
  • First 4 characters of the last name of any individual
  • First 4 characters of a business name
  • First 6 characters of the street address, including spaces
  • All money amounts, including balance due, interest and penalties

Based on their review of the changes to the IRS tax transcripts, they do not believe that the redaction of sensitive personal information will pose a significant burden for institutions in using the new tax transcripts for verification purposes. Institutions should still be able to identify and match the tax payer information on the tax transcript with the FAFSA information on file either by use of the limited redacted information provided on the tax transcript or by use of the new “Customer File Number” available on the new transcript. As a result, the IRS tax transcript is still acceptable documentation for verification purposes.

Additional changes were made to the IRS forms 4506-Td 4506T-EZ provide an opportunity for the tax filer to provide a Customer File Number which is optional and available for the filer to use when using the form to request a transcript. Starting early next calendar year tax payers may also assign a Customer File Number to their tax transcript that they obtain through Get Transcript On-line and Get Transcript On-Line By Mail. Up to 10 numeric characters, such as a student identification number, can be included to better assist institutions in matching the tax transcript to the appropriate student.

In the spring of 2019 the IRS plans to remove the option for requesting third-party receipt of tax information from Form 4506-T and 4506T-EZ.  Instead, transcripts will be mailed only to the taxpayer’s address of record. Institutions still interested in receiving tax transcripts directly from the IRS may request to become participants in the IRS’ Income Verification Express Services [IVES] program by registering for e-Services on IRS.gov.

For more information from FSA, check out this electronic announcement here.

<script type=”text/javascript” src=”//downloads.mailchimp.com/js/signup-forms/popup/embed.js” data-dojo-config=”usePlainJson: true, isDebug: false”></script><script type=”text/javascript”>require([“mojo/signup-forms/Loader”], function(L) { L.start({“baseUrl”:”mc.us11.list-manage.com”,”uuid”:”b3c9a64a1c8fd466136103ac2″,”lid”:”c30bde9090″}) })</script>

2019-2020 FAFSA PDF RELEASED

The 2019-2020 FAFSA PDF is here. The 2019-2020 FAFSA cycle began on Oct. 1 and the application is available until June 30, 2020. The Free Application for Federal Student Aid (FAFSA) is the first step in the financial aid process. Students use the FAFSA to apply for federal student aid, such as grants, work-study, and loans. In addition, most states and colleges use information from the FAFSA to award nonfederal aid. FSA is pushing students to apply as early as possible, since some funds are limited, particularly funding from state aid programs which students also apply for through the FAFSA. Be sure to remind your students that some funds are limited, so it’s a good idea to apply as soon as possible.

The IRS DRT back for the 2019-2020 FAFSA cycle with stronger security and privacy protections. As a result, the tax information transferred from the IRS does not display on the IRS DRT web page, in the FAFSA form, or on the Student Aid Report. Instead of the user’s tax information being displayed, the phrase “Transferred from the IRS” appears in the appropriate fields on fafsa.gov. Schools will have access to the tax return information that is transferred via the IRS DRT.

<script type=”text/javascript” src=”//downloads.mailchimp.com/js/signup-forms/popup/embed.js” data-dojo-config=”usePlainJson: true, isDebug: false”></script><script type=”text/javascript”>require([“mojo/signup-forms/Loader”], function(L) { L.start({“baseUrl”:”mc.us11.list-manage.com”,”uuid”:”b3c9a64a1c8fd466136103ac2″,”lid”:”c30bde9090″}) })</script>

2018-2019 ISIR CORRECTIONS DUE TO TRANSFER OF INCORRECT TAX YEAR DATA

According to a recent announcement from Federal Student Aid (FSA), some FAFSA applicants who attempted to file a correction to their 2018-2019 FAFSA received 2017 tax year data instead of the correct 2016 tax year data. It appears that this glitch affected only a small number of applicants, particularly those who made a correction to their 2018-2019 FAFSA between September 30, 2018 and October 4, 2018 and used the IRS Data Retrieval Tool to transfer their tax information from the IRS to the FAFSA.  FSA identified the issue and resolved the problem with the IRS Data Retrieval Tool on October 4th, 2018, so it shouldn’t happen again.

On October 26, 2018 the Central Processing System reprocessed the ISIRs of affected applicants and voided the bad transactions – but they did NOT correct the tax information so ISIR corrections still need to be made. Instead, emails are being sent to affected applicants alerting them to the problem and informing them to go on line and make another ISIR correction by transferring the correct 2016 IRS tax information to the FAFSA using the DRT. This issue reportedly impacted a very small number of applicants, but it is important to note that the reprocessed transactions are intended solely to alert impacted applicants and institutions that action is required; the CPS reprocessing did not modify the financial information transferred from the IRS.

Several methods exist for schools to identify records resulting from the October 26 reprocessing:

Reprocessed Institutional Student Information Records (ISIRs) will be sent under the IGSG19OP message class.

SARs and ISIRs will include SAR comment code 172, which states “This SAR was produced because we processed a change to your information based on information reported to us by another agency or because of a processing system change. Review your SAR to see what effect, if any, this change has had on your application, and call 1-800-4-FED-AID (1-800-433-3243) if you have any questions.”

ISIRs produced because of the reprocessing will include a value of “04” for the Reprocessed Reason Code (ISIR field #248).

The FAA Information page in Student Inquiry on the FAA Access to CPS Online Web site will display “04 – Reprocessed for wrong tax year transferred from IRS DRT” for the Reprocessing Code for the transaction resulting from the reprocessing. The Reprocessing Reason Code 04 description will not display in FAA Access to CPS Online until after FSA implements updates to the site in a future release.

<script type=”text/javascript” src=”//downloads.mailchimp.com/js/signup-forms/popup/embed.js” data-dojo-config=”usePlainJson: true, isDebug: false”></script><script type=”text/javascript”>require([“mojo/signup-forms/Loader”], function(L) { L.start({“baseUrl”:”mc.us11.list-manage.com”,”uuid”:”b3c9a64a1c8fd466136103ac2″,”lid”:”c30bde9090″}) })</script>

NEW IRS GET TRANSCRIPT HEAVILY REDACTS PII

Concerns over the privacy of taxpayer data prompted the Internal Revenue Service (IRS) to make some changes to tax transcripts. Personally Identifiable Information (PII) on the new transcripts is heavily redacted, however financial entries are still visible. According to the IRS announcement here’s how the information is laid out (you can also see a sample here https://www.irs.gov/pub/irs-utl/New_Tax_Return_Transcript.pdf ).

Last 4 digits of any SSN listed on the transcript: XXX-XX-1234
Last 4 digits of any EIN listed on the transcript:  XX-XXX-1234
Last 4 digits of any account or telephone number
First 4 characters of the last name for any individual
First 4 characters of a business name
First 6 characters of the street address, including spaces
All money amounts, including balance due, interest and penalties

Since so much information is obscured, the IRS has created a new Customer File Number that lenders, colleges and other third parties that order transcripts for non-tax purposes can use as an identifying number instead of the taxpayer’s SSN. Third parties or taxpayers can create any 10-digit number, except for the taxpayer’s SSN, for use as an identifier. The Customer File Number listed on the 4506-T will be automatically posted and visible on the requested tax transcript, allowing the third party to match the document to the taxpayer. A Customer File Number can be, for example, a student ID number or some other number that the taxpayer would like to use.

The new transcripts went live on September 23, 2018 and are applicable for all tax years and are available through Get Transcript Online and Get Transcript by Mail services. Students and others using the IRS Data Retrieval Tool through the Free Application for Federal Student Aid (FAFSA) process are not affected.

Click here for an updated Form 4506-T, “Request for Transcript of Tax Return”.

Beginning in January next year, the IRS plans to stop faxing transcripts to both taxpayers as well as third parties. By May of 2019 the IRS also plans to stop mailing tax transcripts to third parties and will only mail them to the taxpayer’s address of record. According to the IRS, transcripts are generally mailed within five to ten business days.

ARE YOU READY FOR THE 2019-2020 FAFSA

The 2019-2020 FAFSA launches on October 1, 2018. 2019-2020 FAFSA applicants will be required to provide their 2017 tax year information on the form. This year, applicants will have two ways to complete the form online by either completing the application at FAFSA.gov or by using the new myStudentAid app to complete the form right form their smart phone. The IRS Data Retrieval Tool (DRT) is reportedly ready to go for the 2019-2020 year too, so, we’re all keeping our fingers crossed that this year, it all works as expected.

THE MYSTUDENTAID MOBILE APP IS NOW AVAILABLE

Last month, Federal Student Aid released their long-awaited Financial Aid mobile app. The app was dubbed the “myStudentAid Mobile App” and not the FAFSA app to many people’s surprise, but a look at the app’s features reveals that this is more than a FAFSA app. The myStudentAid mobile app will allow users to complete the FAFSA safely and securely from their mobile device, edit and manage an FSA ID and even view their federal student loan and aid history, the app also provides access to information on FSA’s Studentaid.gov and contact information for FSA’s contact centers.

Now students and parents have two ways to complete the Free Application for Federal Student Aid form; either on the web at www.fafsa.gov or through the new mobile app. According to the announcement from Federal Student Aid, students and parents may now download the myStudentAid app from both the Apple Store (iOS) and Google Play (Android).

THE FREE APPLICATION FOR FEDERAL STUDENT AID GOES MOBILE

If you attended last year’s Federal Student Aid conference in Orlando, Florida you were among the first to hear about FSA’s plans to redesign the FAFSA.Gov website and move the application to a mobile app.

According to an announcement from Federal Student Aid, the redesigned website was launched on July 22. Now, the site is optimized to fit mobile phone screens and has been redesigned for a better user experience. The FAFSA app is expected to be released later this year by October 1, 2018, so that students and parents can begin applying for aid the upcoming 2019-2020 FAFSA application cycle. More specific information on the mobile app, which will become available later this summer, will follow in an upcoming electronic announcement. For now, check out the electronic announcement from FSA for more information and to grab a copy of a helpful PowerPoint that can be used as a reference tool for aid administrators, counselors and even financial aid nights and internal staff training.

FSA UNVEILS NEW DHS-SAVE RESOURCE PAGE

Beginning in May 2018, the U.S. Department of Education (ED) will give Title IV schools access to the U.S. Department of Homeland Security (DHS) Systematic Alien Verification for Entitlements (Save) system for submitting third step verification requests to obtain the immigration status for determining student eligibility for Title IV aid. Increasing electronic access for Title IV schools to the save system is a collaborative effort by ED and DHS, designed to modernize the third step verification process. DHS’ existing paper-based process will be discontinued on May 1, 2018.

To assist schools in getting up to speed with the new process, the Department created a new DHS-SAVE resource page on the IFAP website. It provides the guidance on the electronic third step verification process for determining a student’s eligibility for title iv as well as dear colleague letters and announcements and other resources.