Working Student Act Introduced In Senate

By Karen McCarthy, NASFAA Policy Staff  

Legislation introduced on Friday by Sen. Tammy Baldwin (D-WI), co-sponsored by Sen. Tim Kaine (D-VA), would increase the income protection allowances (IPAs) for students in Federal Methodology (FM).

The Working Student Act (S. 2796) would increase the IPAs for the 2015-16 award year to:

  • $8,451 for dependent students (2015-16 IPA currently set at $6,310)
  • $13,135 for independent students without dependents who are single, separated, or married and both spouses are enrolled (2015-16 IPA currently set at $9,810)
  • $21,060 for married independent students without dependents where only one spouse is enrolled (2015-16 IPA currently set at $15,720)
  • An approximate 35 percent increase in the IPA table applicable to independent students with dependents other than a spouse

Increasing the IPAs would “protect” more income from the FM calculation of available income. All other things being equal, an increase in the IPA would generally lead to a lower expected family contribution (EFC) and possibly an increase in eligibility for Title IV aid. Looked at another way, an increase in the IPA increases the amount of money students can earn without that income being counted as available income.

Senator Tom Harkin’s (D-IA) Higher Education Affordability Act (HEAA), a comprehensive higher education reauthorization bill introduced in June, also proposes increases in the IPAs for students. For some students, the HEAA’s proposed IPAs are higher than those in the Working Student Act. For other students, the proposed IPAs in the Working Student Act are higher. 

Both bills retain the current statutory language requiring yearly increases to the IPAs based on the percentage increase in the Consumer Price Index (CPI).

Neither bill proposes any base-level changes to the IPA tables applicable to parents of dependent students, but they would still be subject to the same yearly increases based on the CPI.

 

Publication Date: 9/17/2014


Sheree B | 9/18/2014 8:54:04 AM

Actually, most of the time that I look at a dependent student's EFC breakdown, the student contribution is coming from assets. 20% of all the assets a dependent student reports are included in the EFC. That is ridiculous. It is insane to punish a student for having the nerve to sock some money away for college in the bank under his or her name. Right now, the asset protection allowance for dependent students is $0. Dependent students should be encouraged to save, not punished for it. There needs to be an asset protection allowance for dependent students.

Chandra O | 9/17/2014 3:53:40 PM

That would be a much needed change. It is always so difficult to see a high need student with a $0 EFC their freshman year lose aid eligibility their sophomore year because they worked to help pay for tuition (if the funds weren't earned from work study of course). It always seemed like they were being punished for doing the right thing.

Ernestine W | 9/17/2014 9:40:16 AM

Increasing the IPA also makes way for students to borrow more. Just a thought

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