Sharing FAFSA & FTI Data with Blue Icon Advisors
By Mandy Sponholtz, Vice President of Operations
Working with Blue Icon Advisors, NASFAA’s consulting firm, allows your school access to additional staff, trusted guidance for compliance, and evaluations of financial aid operations. This often means our consultants have access to both FAFSA and Federal Tax Information (FTI). Recent guidance in Dear Colleague Letter (DCL) GEN-25-08 further clarifies when institutions of higher education can share FAFSA and FTI with outside contractors, such as Blue Icon Advisors, without additional student consent. The DCL states, “Schools and state agencies and their respective contractors may receive and use FTI and FAFSA data for the application, award, and administration of financial aid, consistent with the HEA, Privacy Act, and FERPA, and as outlined in their Student Aid Internet Gateway (SAIG) agreements” (emphasis added).
In short, when Blue Icon is performing the functions associated with “the application, award, and administration of financial aid,” on the school’s behalf, we are permitted to receive FAFSA and FTI data without additional student consent. According to the Dear Colleague Letter, “The Department [of Education (ED)] interprets ‘the application, award, and administration of aid’ to be the administrative and business functions necessary to deliver federal, state, and institutional financial aid efficiently and effectively to students.”
Below is the non-exhaustive list of such functions, as defined by ED, and how Blue Icon serves in those capacities for schools:
U.S. Department of Education Example |
Blue Icon Service |
| Managing aid applications, eligibility, verification, and packaging and assisting students with those processes. |
|
| Processing and disbursing federal, state, or institutional financial aid. |
|
| Monitoring the academic progress of aid recipients and enforcing other aid requirements (e.g., satisfactory academic progress or SAP). |
|
| Complying with mandatory reporting for participation in aid programs, such as the Integrated Postsecondary Education Data System (IPEDS) reporting and net price calculator publishing under HEA sections 487 and 132 respectively. |
|
| Performing analyses necessary to the administration of financial aid programs by leveraging FTI and FAFSA data to estimate and model how financial aid will be allocated by the school or state agency. |
|
| Conducting audits and program evaluations necessary for the efficient and effective administration of those student aid programs. |
|
ED further explains in the DCL that schools should use the principle of “least privilege” when sharing FAFSA and FTI: “Users should only have access to and make use of the data if it is necessary for them to perform their duties related to the application, award, and administration of aid.” When Blue Icon performs staffing or consulting services for schools we will never ask for more information than necessary to provide complete and compliant work.
As a subsidiary of NASFAA, we understand the importance of complying with current guidance regarding the use of FAFSA and FTI data. Our consultants are committed to maintaining data security while also providing efficient services to students. If your school has staffing or consulting needs or any questions about Blue Icon, please contact us at [email protected].
Publication Date: 10/14/2025