House Democrats' HEA Reauthorization Bill's Impact on Student Eligibility and the FAFSA

By Megan Walter, Policy & Federal Relations Staff

Editor's Note: This article is the first in a series that delves into Title IV-related issues contained in the House Democrats' bill to reauthorize the Higher Education Act, the Aim Higher Act.

This article details the proposed changes in the Aim Higher Act affecting the FAFSA and student eligibility issues.

FAFSA Simplification & One-Time FAFSA

The Aim Higher Act (AHA) goes to great lengths to simplify the Free Application for Federal Student Aid (FAFSA) for students and families by eliminating unnecessary questions and bolstering the use of the IRS Data Retrieval Tool (DRT).

This bill would simplify the FAFSA by placing applicants into one of three pathways based on certain family characteristics. Applicants' families who received federal means-tested benefits — including but not limited to the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), or Medicaid — sometime during the 24-month period prior to completing the FAFSA application would be placed in the first pathway. These applicants would not have to complete any additional income or asset questions, and would automatically qualify for the maximum Pell Grant. Applicants who did not file any schedules with their federal income tax return would be placed into the second pathway, which would not require asset information from students, regardless of dependency status, or parents. Pathway three would encompass all other applicants or applicants' parents who do not fall into the first two categories. This population would consist of applicants who may have filed schedules with their federal tax returns because they have more complex assets, such as business or rental income. An automatic zero Expected Family Contribution (EFC) would be available for applicants — including independent students with or without dependents — who file a form 1040A or 1040EZ, who file form 1040 solely for the purpose of receiving the Earned Income Credit, or who are nonfilers; and whose adjusted gross income falls below $34,000.

In addition, dependent, Pell-eligible applicants would only be required to file the FAFSA one time, rather than annually. The same EFC would be used each year the student self-certifies that they are dependent and have not experienced a significant change in circumstances.

The bill's FAFSA simplification plan differs slightly from NASFAA's proposal, which limits the first pathway only to recipients of SNAP or Supplemental Security Income (SSI). NASFAA's plan also differs in the structure of the second pathway by  continuing to require cash, savings, and checking account information from dependent students and independent students without dependents.

In an effort to encourage more applicants to use the DRT, the bill includes language that would allow married taxpayers filing separately to utilize the DRT, something that this population of filers has not been able to do previously.

The AHA also proposes to add measures to be more inclusive of the diverse population of FAFSA users. It would require the application be available in no fewer than 11 of the most commonly spoken languages by its users, as well as ensure the application is accessible to users with disabilities. The form is currently only available in English and Spanish.

Verification

This bill also answers demands for more data on verification to be made available to the public, something NASFAA had requested in a letter to the Department of Education (ED) last month. The Aim Higher Act would require ED to annually collect and produce data points on topics such as:

  • The percentage of applicants who did not receive a Pell Grant award and the percentage of those who were selected for verification;
  • The percentage of applicants who did receive a Pell Grant award and the percentage of those who were selected for verification; and
  • The percentage of all applicants selected for verification by ED

Student Eligibility Changes

The Aim Higher Act will provide Title IV eligibility to undocumented students. Currently, these students are only eligible in some states to receive state and institutional aid, as well as pay in-state tuition prices. To be eligible for Title IV aid, these students must:

  • Be younger than 16 years of age when they entered the United States;
  • Provided a list of all secondary schools attended while in the United States; and
  • Has either:
    • Earned a high school diploma or its equivalency or will earn a diploma or equivalency before the next academic year begins;
    • Earned a degree or has completed a minimum of two years toward a bachelor's degree at an institution of higher education; or
    • Become eligible for a grant of deferred action under either:
      • 2012 or 2014 memoranda giving prosecutorial discretion to individuals who came to the United States as children and individuals who are the parents of U.S. Citizens or permanent residents; or
    • Served in the United States uniformed services for a minimum of four years.

The AHA would also repeal the drug conviction student eligibility provision in its entirety. The bill summary includes language, though NASFAA staff could not locate the text within the bill, that AHA would plan to remove the prohibition that bans incarcerated individuals from receiving Pell Grant funds who would otherwise be eligible for the program by repealing a 1994 provision that deemed them ineligible for the aid.

Additionally, the bill removes the Selective Service registration requirement for Title IV eligibility.

 

Publication Date: 8/6/2018


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