Washington, DC – May 15, 2014 - Today the National Association of Student Financial Aid Administrators (NASFAA) offered its strong support for a new bill, “The Simplifying Financial Aid for Students Act of 2014.” Sponsored by Sen. Cory Booker (D-NJ), the measure would require the use of prior-prior year (PPY) income data to determine student aid eligibility.
“As it stands now, a delay in completing an income tax return can mean a delay in submitting the Free Application for Federal Student Aid (FAFSA), adversely affecting a student’s access to financial aid and hindering the student’s decision on where to attend,” said NASFAA President Justin Draeger. “By using income data from two years prior in the need-analysis formula, students would be able to file the FAFSA much earlier. In fact, under PPY it would be possible to align the admissions and financial aid application processes, offering more time for students and families to evaluate award offers from institutions and make an informed decision about where to attend college.”
Additionally, a move to PPY could enhance the use of the Internal Revenue Service’s Data Retrieval Tool, which allows applicants to import their tax information from the IRS directly to the FAFSA. Using immediately prior-year tax information—as we do today—prevents many families from benefitting from this time-saving tool because taxes aren’t usually completed by the time a family applies for financial aid.
“A move to PPY would significantly increase the number of applicants who are able to use the IRS Data Retrieval Tool and help families skip other burdensome application requirements, such as income verification,” Draeger stated.
The bill aligns with research conducted by NASFAA, showing that dependent students from very low-income families and independent students with dependents of their own (two of the neediest cohorts) could benefit from a switch to PPY.
NASFAA also supports the bill’s requirement to increase the auto-zero expected family contribution (EFC) income threshold from $23,000 to $30,000. With nearly 74 percent of Pell Grant recipients having incomes of less than $30,000, this will ensure that the neediest students do not have go to through complicated, unnecessary steps when filing the FAFSA.
“The goal of simplifying the financial aid application process is paramount to having more needy students receive the resources they need to gain access to and success in higher education,” said Draeger. “We thank Senator Booker for introducing this important legislation and for his commitment to helping our nation’s low-income students.”
To speak to a NASFAA spokesperson about this or other policy positions, please email firstname.lastname@example.org or call (202) 785-6944.
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the U.S. Based in Washington, DC, NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit www.nasfaa.org.
Publication Date: 5/15/2014