New ED Guidance Changes Definition of FTI to Include Derived Total Income Values from ISIR
By Jill Desjean, Director of Policy Analysis
On Tuesday the Department of Education (ED) appended its May 12, 2023 Electronic Announcement (EA) to expand upon its previous definition of what is considered Federal Tax Information (FTI) on the Institutional Student Information Record (ISIR) to include some intermediate and derived values previously not considered FTI.
Notably, Student total income, Parent total income, and FISAP total income are included in the list of what is now considered FTI, among other items listed – within the EA titles as “Access and Use of Federal Tax Information (FTI) for Federal Student Aid Programs Beginning with the 2024-25 FAFSA Processing Cycle” – in full here.
This contradicts previous verbal guidance issued in webinars over the past year, where ED had explicitly stated total income values on the ISIR were “technically not considered FTI,” although at the time, department officials urged caution in using and sharing such data given the potential to “back into” FTI from these derived values.
The designation of the total income values as FTI also appears to contradict November, 2024 guidance, which described total income and adjusted available income as FAFSA data.
As a reminder, FTI is a new category of data included on ISIRs for the first time in the 2024-25 aid year as a result of new inter-agency data-sharing authority between the Internal Revenue Service (IRS) and ED provided in the Fostering Undergraduate Talent by Unlocking Resources for Education Act (FUTURE) Act. This authority was leveraged in the FAFSA Simplification Act to replace income questions on the FAFSA for most applicants with the FUTURE ACT Direct Data Exchange (FA-DDX,) which transfers income data directly from IRS systems to the FAFSA.
Per the Higher Education Act of 1965, as amended (HEA) FTI may only be used and disclosed for the application, award, and administration of student aid programs. There is a strict prohibition on using FTI (including the newly designated intermediate and derived values) for research. In addition to strict data use and data sharing limitations, FTI must be labeled as controlled unclassified information (CUI.)
As a reminder, manually-entered income data is not considered FTI, so the intermediate and derived values listed in the latest EA update would also not be considered FTI if they were derived from manually-entered data.
NASFAA continues to engage with ED on FTI and non-FTI FAFSA data use and data sharing issues. NASFAA’s recently updated data-sharing decision tree will be updated shortly to include the new FTI data elements, and the data-sharing white paper will also be updated in the future. Read Today’s News for the latest on this and other important topics.
Publication Date: 2/13/2025
Joe B | 2/13/2025 10:3:56 AM
Is ED making changes to the ISIR layout due to this at all?
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