ED Releases Guidance on Access, Disclosure, and Use of FAFSA Data
By Maria Carrasco, NASFAA Staff Reporter
The Department of Education (ED) on Thursday released its long-awaited guidance via an electronic announcement on the sharing and usage of personal information from the FAFSA by institutions, state grant agencies, and contractors, beginning with the 2024-25 cycle.
ED noted that the definitions of FAFSA data and non-FAFSA data used in this guidance do not include federal tax information (FTI), and stressed that no inferences should be made regarding FTI based on Thursday’s guidance. A separate electronic announcement with guidance on FTI sharing and usage by institutions and state agencies will be released in the “near future,” ED noted.
Specifically, ED identified non-FTI FAFSA data as information obtained directly from a FAFSA applicant or other contributor on the FAFSA form – such as personal circumstances, student dependency status, federal benefits receipt, financial assets, and manually entered tax data not imported from the IRS – and other information that appears on an Institutional Student Information Record (ISIR) – such as Pell Grant eligibility status, the Student Aid Index (SAI), verification status, total income, adjusted available income, and discretionary net worth.
ED also identified which financial aid information is not considered to be FAFSA data. That includes total aid awarded, grant aid and/or loan receipt and amount by source, and unmet financial need.
The guidance released by ED included sections on how the sharing and use of FAFSA data was implicated by the Higher Education Act (HEA), the Family Educational Rights and Privacy Act (FERPA), and the Privacy Act.
Application, Award and Administration of Aid
From there, ED gave its interpretation of “the application, award, and administration of aid” as used in the HEA. According to ED, the “administrative and business functions necessary to deliver federal, state, and institutional financial aid efficiently and effectively to students” could include, but are not limited to:
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Assisting students or other contributors (e.g., parent(s) or spouse) with the aid application process;
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Managing ISIR processing to determine applicant eligibility for financial aid awards, verification, and other packaging processes;
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Processing and disbursing federal, state, or institutional financial aid funds;
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Monitoring the academic progress of aid recipients and enforcing other aid requirements (e.g., Satisfactory Academic Progress (SAP));
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Performing analyses related to financial aid, including conducting audits, program evaluations, or modeling and other research necessary to support the efficient and effective administration of student aid programs consistent with Section 483 of the HEA;
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The production by IHEs or state grant agencies of de-identified, aggregate, descriptive statistics about financial aid programs or participants;
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Development of state budgets and forecasting; and
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Complying with mandatory reporting for participation in Title IV, HEA programs, including (but not limited to) Integrated Postsecondary Education Data System (IPEDS) reporting and publishing net price calculators.
Several offices within an institution or state grant agency may have duties with the application, award, or administration of aid.
ED wrote that could include offices within an institution responsible for the overall administration and delivery of federal, state, institutional aid, or other scholarship awards, including those administered by athletics divisions; alumni associations or institutional foundations, as long as they are under the control of the institution; or offices that provide support for completing aid applications such as admissions, housing, or other support programs such as TRIO programs. This could also include offices responsible for mandatory reporting related to aid administration, such as Campus-Based Program Fiscal Operation Report and Application to Participate (FISAP) Reporting, IPEDS, and SAP.
Consent Requirements
According to ED, if an institution or state agency needs to get prior written consent from an applicant, that requires a separate, written document signed (electronic signatures are permitted) and dated by the FAFSA applicant. The consent form must specify the FAFSA data being disclosed, the purpose for the disclosure, and state that the information may only be used for the specified purpose.
The HEA requires prior written consent to be maintained for a period of at least three years from the student’s last date of attendance at the institution and made available to ED upon request.
Means-Tested Benefits
The HEA and prior guidance from ED also allow institutions and state grant agencies to use student’s FAFSA data to inform them that they may be eligible for means-tested benefits, such as Supplemental Nutrition Assistance Program (SNAP) benefits.
Institutions and state grant agencies can also develop a process for students to provide prior written consent to further redisclose FAFSA data from their ISIR to other federal, state, or local government agencies or tribal organizations to assist students in applying for and receiving government or tribal assistance, for the purpose of assisting the applicant in applying for and receiving financial assistance for any component of the applicant’s cost of attendance.
Scholarships
Scholarship organizations or aid programs within an institution or state grant agency may receive access to and use FAFSA data for the application, award, and administration of that aid without additional prior written consent by the applicant. ED clarified that aid could be administered by the institution’s financial aid office or other offices within an institution, such as athletics. And philanthropy-funded scholarships, where the funds are donated to and administered by the institution or state, are considered institutional or state aid.
Under the HEA, institutions and state grant agencies must obtain the prior written consent of the applicant to disclose FAFSA data to an external scholarship-granting organization. However, there are two organizations with exceptions – the United Negro College Fund and the Hispanic College Fund.
Support Services
There are cases in which FAFSA data can be used, without prior written consent, by an institution or state agency in order to provide advising or support for students, as long as its purposes are for the application, award, and administration of aid, and the disclosure is allowable under a FERPA exception.
An example ED noted is that FAFSA data could be leveraged by academic advisors and other student support staff to assist students to complete the FAFSA and other financial aid forms, or to file a financial aid appeal, among other things.
However, institutions must get prior written consent from students to use or disclose FAFSA data for purposes “beyond financial aid,” such as academic advising. For example, an institution would need to get written prior consent in order for the financial aid office to disclose Pell Grant eligibility status to the academic advising office for purposes of enrollment and retention efforts.
Under FERPA, an institution could disclose FAFSA data and non-FAFSA data without prior written consent, provided that the requirements of a FERPA exception are met. For example, the disclosure is to school officials who the institution has determined to have legitimate educational interests in such data.
Use of FAFSA Data for Meeting Legal Requirements
When it comes to institutions meeting legal requirements they must adhere to in order to continue to participate in Title IV programs, ED identified several examples that are allowed uses of FAFSA data under the HEA. Examples include:
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Submission of IPEDS surveys;
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Monitoring SAP;
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Sharing FAFSA data with the Department for audits or program reviews;
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Sharing FAFSA data as a part of a state authorized and conducted audit related to the administration of an institutional or state aid program; or
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Compliance with other mandatory state reporting requirements related to the application, award or administration of aid.
For FAFSA data that is protected under FERPA, the FERPA exceptions that may apply include, but are not limited to;
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School official exception: FAFSA data can be disclosed, without eligible student consent, to other school officials in the institutions who have been determined to have a legitimate educational interest in accessing the data, such as the institutional research office receiving the data to do IPEDS reporting;
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Financial aid exception: FAFSA data can be disclosed, without eligible student consent, to those within or external to the institution, if the information is necessary to, for instance, enforce the terms and conditions of financial aid that the student has received; and
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Audit or evaluation exception: FAFSA data can be disclosed, without eligible student consent, to the authorized representatives of state and local educational authorities, the Secretary of Education, the Comptroller General of the United States, and the Attorney General of the United States who are auditing or evaluating a federal- or state-supported education program or involved with the enforcement or compliance with federal legal requirements related to a federal- or state-supported education program.
Use of FAFSA Data for Research
The HEA allows the use of FAFSA data without consent by institutions and state higher education agencies for research to “promote college attendance, persistence, and completion.” ED stressed that the research must not release individually identifiable information on an applicant to the public or anyone not authorized to receive the information. This research must be done by or on behalf of the institutions or state grant agency.
Providing FAFSA Data in Response to a Subpoena
Under the HEA, institutions and state grant agencies can provide FAFSA data to law enforcement investigations or in response to a subpoena if the investigation is directly related to the application, administration, and award of financial aid.
ED noted that if the FAFSA data is covered by FERPA, institutions and state agencies may comply with subpoenas but should also make a “reasonable effort” to contact the student in advance before complying to the subpoena.
Sharing Data with Applicant or Contributors
The HEA requires that, upon request from an applicant, an institution must provide them access to their own FAFSA data as reported on the ISIR, including data provided by any of their contributors on the FAFSA.
FAFSA applicants may choose to further redisclose their FAFSA data, including a contributor’s information, to other individuals or entities inside the institution, or to other external organizations, such as scholarship organizations and other support organizations, by obtaining a copy of their ISIR.
According to ED, under FERPA, an eligible student’s prior written consent is required for the institution to disclose FAFSA data to parents and/or a spouse of that student. However, ED noted if a student is a “dependent student,” an institution may disclose the student’s education record to either parent without the student’s consent, provided the student is claimed on the parent’s most recent tax return.
ED wrote that discretion is granted to institutions to make this disclosure and institutions should consider the circumstances of students. ED gives the example that if a student answered unusual circumstances on the FAFSA, the institution should consider the impact on sharing that information with a parent, even if the student is still considered a dependent.
ED noted that if stakeholders need additional information or have specific questions, they should visit FSA’s Partner Connect Help Center and select the topic “policy guidance” on the Contact Customer Support form.
NASFAA will be in contact with ED over the coming weeks to confirm and clarify some of this guidance, and is working to update its own data sharing resources like the data sharing white paper and decision tree.
Publication Date: 11/8/2024
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