A group of bipartisan senators yesterday introduced the Faster Access to Federal Student Aid (FAFSA) Act of 2018, a bill that would, through better integration with the Department of Education (ED) and the Internal Revenue Service (IRS), simplify the application, verification, and student loan repayment processes. Introduced by Chairman of the Health, Education, Labor and Pensions (HELP) Committee Sen. Lamar Alexander (R-TN), Ranking Member of the HELP Committee Sen. Patty Murray (D-WA), Sen. Sheldon Whitehouse (D-RI), and Sen. Cory Gardner (R-CO), the bill takes the important step of amending both the Internal Revenue Code (IRC) and Higher Education Act (HEA) to allow for cross-agency data-sharing that would improve and streamline the federal student aid system. The bill implements a portion of NASFAA’s FAFSA simplification proposal, which was presented by NASFAA President Justin Draeger in a Senate Health, Education, Labor, and Pensions Committee hearing in November 2017.
The IRC currently does not allow for the IRS to share taxpayer data with ED. The IRS Data Retrieval Tool (DRT) was designed to work around the lack of data-sharing authority by instead having the applicant obtain their own tax information from the IRS, and then import that information into the FAFSA. The FAFSA Act would amend section 6103(l) of the IRC to allow the IRS to disclose tax return information to authorized ED officials for the purposes of “determining eligibility for, and amount of, Federal student financial aid.” The allowable information to be disclosed would include all items currently brought over from the DRT, and would also include “the filing status of such taxpayer,” including whether the applicant had filed taxes.
With information coming directly from the IRS, verification burden should be greatly reduced because applicants who currently fall into categories that are ineligible to use the DRT would presumably be eligible to have their tax data shared directly between IRS and ED. The legislation should also largely do away with the increasingly difficult verification of non-filing requirement (VONF), since the bill includes filing status as one of the shared IRS information elements.
The FAFSA Act would also permit ED to share tax return information “solely for the use in the application, award and administration of Federal student financial aid, State aid, or aid awarded by eligible institutions or such entities as the Secretary of Education may designate” to eligible institutions of higher education, state higher education agencies, and certain scholarship organizations with the applicant’s consent.
The bill further permits taxpayer data sharing between IRS and ED for the purpose of verifying income for applicants requesting or renewing eligibility for income-driven loan repayment plans as well as for the 3-year monitoring period after a borrower has received a discharge for total and permanent disability.
In addition to providing a more streamlined, less burdensome process for students and families, the bill would create a more secure data-sharing experience, reduce applicant errors in reported income, and reduce improper payments. The bill also aims to improve cost estimates and forecasting of the federal student aid programs by including research, oversight and analysis as an allowable use of shared IRS information. In addition, ED may use IRS data for “producing aggregate statistics for reporting, research, or consumer information on the performance of programs or institutions of higher education.”
“The FAFSA Act not only makes the application process easier for students, but does so while preserving the integrity of the student aid programs,” said NASFAA President Justin Draeger. “These are the sort of common-sense, bipartisan solutions students and families need from Washington D.C. and we applaud these Senators for their commitment to removing barriers to a postsecondary education. The financial aid community urges swift action on this bill so that work can begin to reduce the application and data verification burden that continues to overwhelm students and institutions.”
Publication Date: 11/14/2018