The Free Application for Federal Student Aid (FAFSA) for academic year 2022-2023 is now available. As you prepare to complete and submit the new FAFSA, don’t forget about a handy tool that’s offered to you–the IRS Data Retrieval Tool (DRT).
At your request, the IRS DRT will automatically transfer your financial information from the required tax return to your FAFSA, saving you all the time you would normally spend entering the information yourself.
The FAFSA will ask you a few questions to determine your eligibility to use the DRT; if you are deemed eligible, you’ll be asked if you want to automatically transfer the information from the IRS to your FAFSA. Using the IRS DRT ensures the financial information on your FAFSA will be reported accurately, meaning a financial aid office will have one less reason to contact you for additional information.
To learn more about the IRS DRT, visit StudentAid.gov.
Before completing your Free Application for Federal Student Aid (FAFSA), there is a new update you’ll want to review.
“The American Rescue Plan (ARP) Act was signed into law on March 11, 2021. The ARP made the first $10,200 of unemployment benefits non-taxable for each taxpayer with incomes less than $150,000. The untaxed portion of unemployment benefits increases to $20,400 for applicants who have a tax filing status of married-filing-jointly (if both tax filers received benefits).
FSA expects to see an issue with aid eligibility determination for some 2022-23 FAFSA filers as well as Income Driven Repayment applicants for whom loan payment amounts are based on 2020 tax information, even if the IRS DRT was used in either circumstance.
Tax filers who received unemployment benefits in 2020 and filed taxes prior to March 11, 2021, will have a higher Adjusted Gross Income (AGI) on their original tax record compared to those who filed (or amended) after the enaction of the ARP.
FAFSA filers who meet the conditions above and use the IRS DRT for the 2022–23 year will have a higher AGI, resulting in a higher EFC which may potentially reduce their eligibility for federal need-based aid.
Financial Aid Administrators are encouraged to work with applicants affected by the ARP who filed their taxes before March 11, 2021, to use professional judgement to adjust the applicant’s AGI (or the AGI of the applicant’s parents or spouse, if applicable) as appropriate.”
For more information, visit https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-09-30/impact-american-rescue-plan-change-tax-treatment-unemployment-benefits-student-aid-eligibility-cycle-2022-23 or https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation.
A new Free Application for Federal Student Aid (FAFSA) becomes available each year on Oct. 1. The FAFSA for the 2022-2023 academic year is now available and high school seniors should be prepared to submit their application as soon as possible.
Your FAFSA will be used to determine your eligibility for federal and state financial aid—money that will help you pay for college. Since some types of aid are first-come, first served, it’s important to submit your FAFSA as soon after Oct. 1 as you can.
Here are some things to remember:
- The FAFSA is free; you should never have to pay to submit your FAFSA.
- It’s a snapshot of your (and possibly your parents’) financial situation which is used to determine how much aid you may be eligible to receive.
- When you submit a FAFSA, you’re not making any commitments to attend a certain school or to borrow student loans; you’re merely giving permission to the college(s) of your choice to discuss your financial aid options with you.
- The FAFSA’s not a one-time thing. You’ll need to submit a new FAFSA for each year that you need help paying for college.
- To submit your application online, you’ll need to set up a Federal Student Aid ID (FSA ID)—a username and password that will serve as your electronic signature. A parent may also need to create their own FSA ID. To create an FSA ID, go to StudentAid.gov and choose ‘Create Account.’
- Once your FSA ID is established, you can use it to complete your FAFSA at StudentAid.gov anytime on or after Oct. 1.
There are two questions that will appear on the FAFSA again this year, but are no longer valid.
- One question asks males: “Do you want us to register you with the Selective Service System?” Although federal law still requires males age 18-25 to be registered with Selective Service, it won’t affect your eligibility for aid if you haven’t registered yet and choose not to register on the FAFSA.
- The other question is: “Have you been convicted of the possession or sale of illegal drugs for an offense that occurred while you were receiving federal student aid?” While this question has never affected high school seniors, those who have received federal student aid in the past will no longer lose their eligibility due to a previous drug conviction.
Financial aid officers at the colleges you’ve listed on your FAFSA have been instructed to ignore any comments on these two questions so that you will qualify for student aid if otherwise eligible.
For more information about the FAFSA and federal eligibility requirements, be sure to check out other articles on this website, view the resources on UCanGo2.org and visit StudentAid.gov.