There is more March Madness than what’s taking place on college basketball courts this spring.
Students are hearing from universities about admissions and applying for financial aid. But this process is being complicated by the Internal Revenue Service’s decision to shut down a tool that automatically links tax information with financial aid forms.
According to the Department of Education, the IRS decided in early-March “to temporarily suspend the Data Retrieval Tool (DRT) as a precautionary step following concerns that information from the tool could potentially be misused by identity thieves.”
“I do not think this is going to be much of a holdup for students in terms of financial aid. The state financial aid agencies were aware of this early on, and the federal government is aware of the delay with the DRT tool,” said Troy Onink, CEO of Stratagee, a college planning service that works with financial advisors and broker-dealers, in an interview.
Both state and federal organizations, as well as colleges “are not going to hold rigid to their deadlines,” Onink explained.
“The way this should play out [means] student aid awards are not likely to be affected. But it will be a bit longer process than normal in terms of submitting information and getting awards,” added the CEO of Stratagee, which runs the College InSource Partner Program with Cambridge and other BDs.
Others financial professionals agree.
“The glitch seems to have little to no impact on financial aid application functionality, except that tax return information must be entered manually for a few weeks,” said Phil Collier, an accredited wealth management advisor and product manager of 529 plans for Raymond James Private Client Group, in a statement.