NASFAA Submits Comments for 2020-21 FAFSA, Addresses Legal Guardianship

By Megan Walter, NASFAA Policy & Federal Relations Staff

Over the past three months, the Department of Education (ED) requested public comment—in two rounds of proposals—for the 2020-21 FAFSA. NASFAA submitted comments for both iterations in an effort to maintain eligibility for Simplified Needs Test (SNT) and automatic zero Expected Family Contribution (EFC) for certain applicants who are affected by the 2018 tax form changes.

For the second public comment period, which ended last week, NASFAA urged ED to make changes to the way questions 35 and 82 are posed, and suggested improvements to the question regarding untaxed income, in light of recent events concerning legal guardianships.

ED sought to modify the 2020-21 FAFSA to correspond to recent changes to the 1040 tax form. As tax forms 1040A and 1040EZ no longer exist, and all filers will use the 1040 to file their taxes, ED worded question 35 and 82 on the FAFSA as, “Did (or will) you file a Schedule 1 with your 2018 tax return? Answer ‘No’ if you did not file a Schedule 1 or only file it to report an Alaska Permanent Fund dividend. See Notes page 9 for other exceptions.” 

NASFAA responded to ED with two suggestions for how this question should be restructured for clarity. The first, as outlined in the first round of public comments, was to use skip logic for any applicant who answered “Yes” to the first sentence in the above question to then receive a second question that would read:

“Did you file a Schedule 1 only to report or claim one or more of the following: 

  • Capital gain distributions
  • Unemployment compensation 
  • Educator expenses 
  • IRA deduction 
  • Student loan interest deduction 
  • Alaska Permanent Fund dividends?” 

Applicants who respond “Yes” would then be considered for SNT or automatic zero EFC, holding them harmless from changes to the federal tax forms.

As that option would require ED to add an additional question to the FAFSA—although with skip logic so not all applicants would see it—NASFAA made an alternative suggestion to change the language of the question to read:

“Did (or will) you file a Schedule 1 with your 2018 tax return? Answer 'No' if you did not file Schedule 1, or answer ‘No’ if you only filed Schedule 1 to report one (or more) of the six exceptions listed in the Notes on page 9.” 

“This approach places equal emphasis on all exceptions and highlights the number of exceptions, which increase the likelihood that applicants will click on the hyperlink to learn if any of the exceptions are applicable,” NASFAA wrote.

In addition, in response to the news cycle early last week that drew attention to allegations that some wealthy families may be transferring guardianship of their children to friends or relatives so those students may be eligible for need-based financial aid, NASFAA in its comments also urged ED to emphasize requirements for all independent students to report financial support from parents on the FAFSA.

ED could draw more attention to the rules of reporting untaxed income, NASFAA wrote, through a pop-up or something similar, which would inform the applicant that money received or paid on the applicant’s behalf, including by parents, must be reported as untaxed income on the FAFSA, and remind applicants that by signing the FAFSA they are certifying that all information is true and complete to the best of their knowledge.

The final public comment period closed August 2 and the 2020-21 FAFSA is scheduled to go live on Oct. 1, 2019.

 

Publication Date: 8/6/2019


Stacey P | 8/6/2019 11:32:50 AM

Why does the question read “Did you or will you” file as opposed to “Are you required “ to file?

Jennifer S | 8/6/2019 10:58:20 AM

Could we somehow get at this legal guardianship loophole the way we do with unmarried parents, living together, where both must be included? An add-on to the question in which they specify they also do not reside with their parents?

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