The Department of Education's (ED) Privacy and Technical Assistance Center (PTAC) has confirmed verbally to NASFAA its prior guidance that FAFSA data cannot be released by the institution unless the release is for one of the specific purposes permitted by law, even with the student's written authorization. It is still undetermined when and how PTAC will release this guidance formally.
Section 483(a)(3)(E) of the Higher Education Act (HEA) specifies that FAFSA data, which includes information related to Expected Family Contributions (EFCs) and awards, “shall be used only for the application, award, and administration of aid awarded under federal student aid programs, state aid, or aid awarded by eligible institutions or such entities as the Department may designate.”
PTAC staff previously informed NASFAA that personally-identifiable data releases of FAFSA information for purposes other than those authorized in the law would not be permitted, even with the student's authorization. The student must provide the data directly to the requesting party. This guidance was incorporated into NASFAA's paper, "Financial Aid Data Sharing," which was published in June 2017.
Various parties raised concerns about this guidance, as it would disrupt longstanding and widespread practices between schools and outside entities, such as private scholarship providers. PTAC staff agreed to re-evaluate their initial interpretation of the HEA.
Now that the guidance has been reviewed and confirmed, institutions may need to modify their procedures regarding release of FAFSA data to private scholarship providers. It is NASFAA's understanding that many private scholarship providers request that scholarship recipients sign a Family Educational Rights and Privacy Act (FERPA) release authorizing the private scholarship provider to obtain FAFSA information directly from the institution. This practice is not permissible under the HEA because the release is not related to federal, state, or institutional aid. The only permissible method for the scholarship provider to receive the FAFSA information under the HEA would be directly from the student.
Questions may be directed to the PTAC Help Desk by email at [email protected] or by phone at 855-249-3072.
Publication Date: 9/13/2017