After years of effort, the IRS will be allowed to share tax information with the Department of Education. The shift comes as a result of President Trump signing the Future Act in December. Just what does this mean for students and those repaying student loans?
Policymakers and other stakeholders have been working for years to get permission to share data between the IRS and the Department of Education—it is supposed to make paperwork easier for Financial Aid Applicants and those repaying their student loans.
The National Association of Student Financial Aid Administrators (NASFAA) Director of Policy Analysis Karen McCarthy said: “It’s a win-win because it’s very helpful for students, it simplifies the process, but it also is sharing IRS information directly. So there’s less room for error, there’s less room for fraud type situations. So it really kind of has that program integrity element as well.”
The act will also make repaying student loan debt easier. Its plan is to make income-based repayment plans more automatic for students, so if they forget to recertify, they won’t lose their plan or have to pay more.
Sarah Sattelmeyer, the Project Director, Project on Student Borrower Success said: “So let’s say your payment and an income-driven plan is $100 a month and your payment on the theater plan is $200 a month. If you don’t recertify on time in January, you pay hundred dollars and then February, your bill jumps to $200. And that can really be devastating to many people.”
In addition to simplifying loan repayment paperwork, (FASFA) applicants will have 22 fewer questions to fill out on the typically 100 question form.
Some college students are thankful for the simplification of the FASFA, and others aren’t convinced it will have much of an impact.
Student Freya Jamison a Law student at Columbia University said: “I’m going to be doing it next week. So I’m glad I didn’t know about the changes, but I’m glad they’re there, and it will be a little less painless [painful] this year.”
Deborah Pantaleon, a political science student also at Columbia University said: “I hope that the changes are going to be helpful. But I think in and of itself, having a 19, 20-year-old fill out, like tax forms, essentially, it’s going to be kind of be still very difficult.”