Over the course of the past couple of months I have been receiving a number of questions from readers related to the verification process that is randomly initiated for some families after they complete the FAFSA. The verification process is not too cumbersome but it does require some follow through from the families and the student. A couple of months ago, I wrote an informative article to help guide those families that are selected for verification. You can read it here.

I recently got a question from a reader that inquired about a college’s ability to access their IRS records to verify the information they submitted on the FAFSA. A similar question I received asked if the Department of Education can arbitrarily access their tax information.

Fortunately, for your privacy’s sake,  the answer to both of these questions is a resounding NO…

I can tell you that colleges and universities would love to have the ability to pull up your IRS database information at the click of a button. Not because they are nosy people or want to root through your private information, it would just make the verification process go much smoother and they wouldn’t be forced to “bug” families and students that have been chosen for verification. As you can imagine though, this type of access provided to financial aid administrators would definitely infringe upon a number of your rights…so… as helpful as it may be, college and university financial aid offices will probably never have direct access to your IRS information. I only say probably because laws and rules are subject to change and you never know when the IRS will come up with an easy access system that allows private non-government third parties to research your tax information. (who knows, maybe that already exists!)

Which leads us to the Department of Education question above… The Department of Education does not have direct access to your tax information. However, when you are completing your FAFSA, you now have the ability to give permission to DOE to import your recent tax information into the appropriate fields on your FAFSA. They have been testing this importing process for the past 4-5 months and plan to roll it out in January of 2011 for all students/families completing the FAFSA. I am sure it will not be immune from bugs and glitches but it is certainly a step in the right direction and a good use of technology.

Hope this information is helpful to our readers. If you find that you have a question related to paying for college, saving for college, or the financial aid process, please be sure to drop us a line. We are always glad to help our readers.