FY 2018 Spending Bill Permits Sharing of FAFSA Data With Private Scholarship Providers

By Karen McCarthy, NASFAA Policy & Federal Relations Staff

Along with setting funding levels for many Title IV programs, the FY 2018 spending bill passed on Friday, March 23 includes a provision clarifying that an institution may, with explicit written consent from the student, share FAFSA information with scholarship-granting organizations or tribal organizations.

The legislative "fix," advocated for by NASFAA, addresses a FAFSA data-sharing issue that has plagued students, financial aid administrators, scholarship providers, and other entities for nearly a year. Last year, the Department of Education’s (ED) Privacy and Technical Assistance Center (PTAC) gave verbal guidance on the sharing of FAFSA data. This guidance prohibited students from authorizing financial aid offices to release FAFSA information to student-approved outside entities that need this information in order to make financial aid awards. Legislative language in the spending bill overrides this guidance, specifying that an institution may, with explicit written consent from the student, share FAFSA information with scholarship-granting organizations or tribal organizations.

The language in the Higher Education Act (HEA) that is the basis of the PTAC guidance, HEA 483(a)(3)(E), requires that FAFSA data only be used for purposes of the application, award, or administration of federal, state, or institutional aid, or aid awarded by other entities as designated by ED.

The new language in the spending bill expands the allowable uses of FAFSA data only to permit sharing of the FAFSA data to scholarship-granting or tribal organizations to assist the applicant in applying for and/or receiving financial assistance. Other potential uses of FAFSA data, such as eligibility determinations for state benefits programs, are not addressed in the bill. Therefore, it appears that institutions are still not allowed to make disclosures of FAFSA data for other uses, even with the student’s written consent.

The provision in the FY 2018 spending bill related to scholarship providers and tribal organizations will be in effect until the HEA is reauthorized, where it will certainly be a topic of discussion.

NASFAA has contacted ED to initiate a discussion about the implementation of the spending bill provision. Once more details are known, the Data Sharing Decision Tree will be updated. Stay tuned to Today’s News for more information as it becomes available.

 

Publication Date: 3/26/2018


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