FAFSA Data Sharing in the Context of Federal Tax Information
In light of the changes resulting from the FUTURE Act and the FAFSA Simplification Act, NASFAA was interested in examining how entities that previously relied on FAFSA data are adapting to the new data-sharing rules and what new processes they have found to meet their needs.
For this project, NASFAA partnered with the Council for Opportunity in Education (COE), the Data Quality Campaign (DQC), the Institute for Higher Education Policy (IHEP), the National College Attainment Network (NCAN), the Student Success Through Applied Research (SSTAR) Lab at the University of Wisconsin-Madison, and the State Higher Education Executive Officers Association (SHEEO) to produce two reports.
Research Responses to FAFSA Reform and FTI Data
NASFAA commissioned a report, authored by the SSTAR Lab, for financial aid researchers interested in using student or parent income data within the context of new prohibitions on using FTI data for research. The report provides background information, examples of alternative measures, and descriptions of lessons learned for researchers.
Download SSTAR Lab Report (PDF)
Perspectives on Implications of Statutory Changes to Data-Sharing Rules
As described in this report, considerable confusion remains in several areas where legislative changes to FTI and non-FTI FAFSA data sharing have occurred. In many places where previous confusion has been resolved by ED guidance, overly strict interpretations of the statute have hindered—or in some cases eliminated—the ability of institutional staff outside of the financial aid office to administer the programs or conduct research that has historically relied on FAFSA data.
Highlighted Suggestions
NASFAA surveyed a subset of its member institutions as part of this project. Informed by the survey results and the perspectives of the partner organizations, NASFAA created a list of suggestions aimed at protecting individual privacy without sacrificing the gains achieved through FAFSA simplification efforts. The full list of suggestions can be viewed in this report. Highlights of those suggestions include:
- ED should issue written guidance on FTI data use and data sharing as soon as possible.
- ED should make FTI and non-FTI FAFSA data use and data-sharing guidance as consistent and as clear as possible, and should not reverse previous decisions.
- Congress should explicitly permit FTI and non-FTI FAFSA data to be used and shared for the award, application, and administration of all TRIO programs (including grants and non-grant support services).
- If Congress considers changes to FTI and non-FTI FAFSA data use and data sharing legislation, it should ensure that these changes do not diminish the benefits of FAFSA simplification by leading institutions, state agencies, or other entities to require additional applications beyond the FAFSA.
- Financial aid offices should work with legal counsel to develop data use and sharing policies that align with the institution’s values and beliefs about protecting student data within the confines of the law.
- Even where data use and data-sharing authority exists, financial aid offices should share only the minimum FTI and non-FTI FAFSA data necessary to allow other entities to administer their programs and conduct research.
- Entities that rely on FTI or non-FTI FAFSA data to conduct their work should collaborate with the financial aid office to identify suitable proxies for sensitive personal data whenever possible
- Entities that rely on FTI or non-FTI FAFSA data should explore existing alternate data sources before creating new data collections to replace information they historically obtained from the FAFSA.
Download SSTAR Lab Report (PDF) | Download NASFAA Report (PDF)
Publication Date: 5/29/2025
