What’s New in Financial Aid
Loan Fee Increases for 2013-2014
As of July 1, 2013 the loan fee for Direct Subsidized Loans and Direct Unsubsidized Loans will increase from 1.0 percent to 1.051 percent and the loan fee for Direct PLUS Loans will increased from 4.0 percent to 4.204 percent.
FAFSA & IRS Data Retrieval Proces
Financial aid offices are no longer able to accept signed copies of federal tax returns from students and parents for FAFSA Verification purposes.
There is an easier, faster way to provide tax information for the Free Application for Federal Student Aid (FAFSA). When completing the FAFSA you will be prompted to enter your PIN and link to the IRS web site. The retrieval process will display your tax information and allow you to transfer it to your FAFSA. Our office encourages everyone to retrieve their tax data if you and your parent(s) have filed your 2012 tax return(s) prior to completing the FAFSA. Families who do not use the IRS Data Retrieval process may be required to submit an IRS tax transcript directly from the IRS to complete the federal verification process.
Option 1. Use the IRS Data Retrieval Process when completing the FAFSA online.
FAFSA provides instructions to link to the IRS while completing the FAFSA. Certain data elements such as AGI and taxes paid will be entered for you on the FAFSA. The data is considered "verified" for FAFSA purposes.
• Students and parents should apply for a Personal Identification Number (PIN). The PIN is an electronic signature necessary for quick completion of the online process. To apply go to: www.PIN.ed.gov
• The Federal Tax Return must be filed at least two weeks (if filing electronically) and 6 -8 weeks (if filing paper return) before using the FAFSA IRS Data Retrieval Process to allow the IRS time to process the return.
• Our office will still need to collect a Verification Worksheet to verify data not provided by the FAFSA IRS Data Retrieval Process (ex: copies of W-2 and 1099 forms, institutional verification forms for such items as household size, number in college, and untaxed income.)
• Certain tax filers may not be able to use the IRS Data Retrieval and will need to request an IRS Tax Transcript
To successfully use the IRS Data Retrieval option you must:
- Have a federal tax return filed with the IRS.
- Have a valid social security number.
- Have a Federal Aid Personal Identification Number (PIN)
You will be not be able to use the IRS Data Retrieval option if:
- Your marital status changes after December 31 of the same tax year.
- You filed married filing separately.
- You filed an amended return.
- You filed a foreign tax return.
Option 2. If selected for verification, you will have to submit an official tax transcript.
• An official tax transcript will be required for tax filers not able to use the IRS Data Retrieval process or who make changes to FAFSA data after using this process.
• You will also be required to verify the following data elements:
- Child support paid, the child(ren) for who it is paid, the person to whom it is paid.
- Food Stamp Benefits.
The Office of Student Financial Services appreciates your patience as we implement this new requirement of the U.S. Department of Education.
When either a parent or student selects the IRS Data Retrieval option, the FAFSA Central Processing System (CPS) will:
- Conduct a data match with the IRS.
- Redirect you to a secure IRS website.
- You will permit the IRS to transfer income data to the CPS Processor.
- Successfully matched data will be noted on the FAFSA as, “Transferred from the IRS.”
A successful match between CPS and the IRS will:
- Eliminate requesting federal income tax return transcripts, as long as FAFSA data fields are not subsequently changed on your FAFSA.
- Avoids reporting errors and processing delays that can otherwise occur.
Please note that you may still be required to supply other income information as part of the general verification process.
If your FAFSA is selected for verification, and you did not use the IRS Data Retrieval option or you changed the IRS data, you will be required to request a tax transcript from IRS and submit it to the Office of Student Financial Service. Personal copies of tax returns can no longer be accepted.
Three ways to request your Tax Transcript: by phone, online, or by mail.
Please make sure you request a Tax Transcript. DO NOT request a Tax Account Transcript or Record of Account because they cannot be used for financial aid verification purposes.
To order by phone:
- Call the IRS at 1-800-829-1040, then select the following prompts:
- Option 2 (Personal Income Taxes)
- Option 1 (Tax History)
- Option 2 (Tax Return Transcript)
- Enter and verify Social Security number (if joint return both SSN’s required)
- Enter and verify number of street address
- Press 2 for Tax Transcript and indicate which year (i.e. 2012)
To order online:
- Go to www.irs.gov, then select the following:
- Click Order a Tax Return or Account Transcript located in the left-hand column
- Click Order a Transcript under Step 3
- Enter your SSN, Date of Birth, Street Address, and Zip Code
- Click Continue
- Select Transcript for Tax Year (i.e. 2012)
- Click Continue
A tax return transcript can be ordered by mail:
- Complete Form 4506-T (Request for Transcript of Tax Return)
- Form 4506-T is available online at http://www.irs.gov/pub/irs-pdf/f4506t.pdf.
- Mail to the address indicated on the form
Your transcript(s) will be mailed within 5 to 10 days from the IRS.
This brief tutorial shows you how to update your FAFSA using the IRS Data Retrieval Tool. The video will download as a zip file that you must open in order to view.
This brief tutorial shows you step-by-step instructions on how to submit corrections on your FAFSA using the IRS Data Retrieval Tool.
The Pay As You Earn Repayment Plan
The Pay As You Earn Repayment Plan helps keep your monthly student loan payments affordable, and usually has the lowest monthly payment amount of the repayment plans that are based on your income. If you need to make lower monthly payments, this plan may be for you. Visit the Federal Student Aid website for additional information and to use the Pay As You Earn Calculator.
Provisions in the Budget Control Act of 2011 impact federal student loan programs offered at UArts. These changes WILL NOT affect the amount of loan funding available. However, the cost of borrowing loans will change. Here are the key provisions affecting future federal graduate and undergraduate student loans:
I. Graduate and Professional Students Only:
Beginning July 1, 2012, all graduate and professional students will lose the interest subsidy on the Subsidized Stafford loan. The graduate Direct Loan program will become entirely unsubsidized, which means the loan will accrue interest while a student is in school. These changes will not affect the annual and aggregate borrowing limits. The maximum amount a student can borrow will remain at $20,500 per academic year.
II. Loss of “origination fee rebate” affecting Direct Loans, Grad PLUS and Parent PLUS:
As of July 1,2012 the origination fee on Parent Plus loans and Graduated Plus loans will be 4%. The origination fee on Federal Direct student loans will be 1%.
III. Loss of interest rate reduction:
The last change is the loss of the .25% interest rate reduction if you pay your loans electronically while in repayment.
IV. Grace Period Interest Subsidy:
Public Law 112-74 amended HEA section 428(a)(3)(A)(i)(I) to temporarily eliminate the interest subsidy provided on Direct Subsidized Loans during the six month grace period provided to students when they are no longer enrolled on at least a half-time basis. This change will be effective for new Direct Stafford Loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014.