Analyzing the College Affordability Act: Changes to the FAFSA & Student Eligibility

By Megan Walter, NASFAA Policy & Federal Relations Staff

Updated Nov. 6, 2019: A markup of this bill took place over three days from Oct. 29-31, 2019 — after the article below was written. An amendment in the nature of a substitute replaced the original bill text, and multiple amendments were adopted during the markup process. The substitute amendment and additional amendments made several minor changes, and this article has been updated to reflect those updates.

Editor's Note: This article is the second in a series of six that delves into Title IV-related issues contained in the House Democrats' bill to reauthorize the Higher Education Act, the College Affordability Act. This article details the proposed changes in the College Affordability Act affecting the Free Application for Federal Student Aid and student eligibility issues. See all of NASFAA's coverage of the College Affordability Act.

FAFSA Simplification

The College Affordability Act (CAA), in a proposal similar to that of NASFAA’s, would attempt to simplify the FAFSA by placing applicants into one of three pathways based on certain income and family characteristics. The language in the CAA, based on the HOPE (Heightening Opportunities for Pathways to Education) for FAFSA Act introduced by Rep. Lucy McBath (D-GA) and endorsed by NASFAA, would eliminate unnecessary questions for some applicants, and bolster the use of the IRS Data Retrieval Tool (DRT). 

Applicants, or the parents of a dependent applicant, who have received a federal means-tested benefits — including but not limited to the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), or Medicaid — during the 24 months prior to filing their FAFSA would be placed in the first pathway. After answering “yes” to the means-tested benefit question, these students would not be asked any additional financial questions, and would automatically qualify for the maximum Pell Grant, along with tax nonfilers or simple filers with an income less than or equal to $34,000.

Applicants would be directed down the second pathway if they are not required to file a 1040 tax return form, or if they did file a 1040 form, but did not have to complete any schedules along with it, and have an adjusted gross income (AGI) of less than or equal to $60,000. These applicants would not have to answer any asset questions.

Lastly, the third pathway would encompass all other applicants or applicants' parents who do not fall into the first two categories. This population would consist of applicants who may have filed schedules with their federal tax returns because they have more complex assets, such as business or rental income.

The definition of untaxed income is modified to include only child support received, cash support or any money paid on the student’s behalf, untaxed portions of pensions, and payments to individual retirement accounts and Keogh accounts excluded from income for federal income tax purposes.

One-Time FAFSA

The bill would only require dependent, Pell-eligible applicants to file the FAFSA one time during their undergraduate career, rather than annually. For eligible students, the same expected family contribution (EFC) would be used each year the student self-certifies that they are still dependent and have not experienced a significant change in circumstances.

FAFSA Languages

The CAA also proposes to add measures to be more inclusive of the diverse population of FAFSA users. It would require the application be available in no fewer than 11 of the most commonly spoken languages by its users, and ensure the application is accessible to users with disabilities. The form is currently only available in English and Spanish.

Data-Sharing

The CAA would extend a provision from the fiscal year 2019 spending bill, which allows institutions to share information from a student’s FAFSA — with explicit written permission from the student — with scholarship-granting organizations and/or organizations designated to help students apply for and receive financial assistance for any part of their cost of attendance.

Verification

This bill also answers demands for more data on verification to be made available to the public — something NASFAA has requested for quite some time. The CAA would require the Department of Education (ED) to annually collect and produce in a timely fashion verification-related data points on topics such as:

  • Number of applicants who received a Federal Pell Grant;

  • The number of Pell Grant recipients who were selected for verification by ED; and

  • The number of students who completed the verification process.

Changes to Student Eligibility

The CAA would provide Title IV eligibility to “Dreamer” students. Currently, these students are only eligible in some states to receive state and institutional aid, as well as pay in-state tuition prices. To be eligible for Title IV aid, these students must have:

  • Entered the country younger than 16 years of age; and

    • Provided a list of each secondary school they have attended; and

    • Earned a high school diploma (or GED); or

    • Acquired a degree from an institution of higher education, or completed a minimum of two years in an undergraduate degree program; or

    • Served in the United States armed services for at least four years.

Title IV eligibility would also be extended to applicants who would have qualified for the Deferred Action for Childhood Arrivals (DACA) or Deferred Action for Parents of Americans (DAPA) programs, and applicants with a temporary protected status. 

The bill would repeal the student eligibility provision that prohibits students with certain drug convictions from receiving Title IV aid, as well as the 1994 provision that prohibits incarcerated individuals from receiving Pell Grant funds. In addition, the CAA would remove the Selective Service registration requirement to receive Title IV aid.

 

Publication Date: 10/22/2019


Carson W | 10/22/2019 8:55:58 PM

Right on David! It would be great if those we're auto-matched as well. Then perhaps we'll have time to do items like advising, budgeting/money management, student default prevention, etc. Out GenZ folk born 1997 and later (esp. our 2000/2001/2002s) need allot of assistance adulting.

David S | 10/22/2019 1:27:09 PM

The government collecting the FAFSA data already knows who is receiving SNAP, TANF, SSI, etc. This would not be self-reported information, therefore no verification necessary. We already know verification to be an obstacle to the students financial aid is most intended to help...the government already knows they're poor, let's stop making them prove it all over again.

Carson W | 10/22/2019 1:20:40 PM

Correct James. I don't like what's being proposed due to the fraud aspect of it. As it is too many people try to game the system. Perhaps a better way to go would be automatically pulling in any IRS information into the FAFSA for any student/parent level 1 information entered into the FAFSA? After all we're almost 20 years into 21st century.

David S | 10/22/2019 12:33:00 PM

There's a lot to like in this bill, especially in regards to simplification and eligibility for Dreamers. Of course, I shiver at the thought of what Republicans want to add to it...get ready for "skin in the game" proposals that will only serve to drive costs up and thought police verbiage designed to erode 1st Amendment rights.

James C | 10/22/2019 11:22:13 AM

Pathway one would allow for a great deal of fraud and error. All applicants in pathway one should be selected for verification which would include proof of need-based programs, especially if they only need to file the FAFSA one time as an undergraduate..

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