NASFAA has expressed support for the Simplifying Financial Aid for Students Act of 2014, introduced yesterday by Sen. Cory Booker (D-NJ). The bill would require the Department of Education to use prior-prior year income (PPY) in the Federal need analysis. NASFAA has advocated for this change to the basis of the expected family contribution (EFC) calculation as part of its reauthorization recommendations. The bill would also increase the threshold for automatic zero EFCs to $30,000.
NASFAA President Justin Draeger said in a letter of support that using PPY would help align the admissions and financial aid processes, “offering more time for students and families to evaluate award offers from institutions and make an informed decision about where to attend college.” Implementing PPY could also enhance use of the Internal Revenue Service’s Data Retrieval Tool (IRS-DRT), which would simplify the application process and decrease the burden of income verification. Research conducted by NASFAA shows that dependent students from very low-income families and independent students with dependents of their own (two of the neediest cohorts) could benefit from a switch to PPY.
Increasing the auto-zero EFC threshold would simplify aid application procedures for more of the neediest students. Nearly 74 percent of Pell Grant recipients have incomes under $30,000.
Publication Date: 5/15/2014