New FAFSA Simplification Bill Takes Important Next Steps

March 24, 2017

By Carrie Warick, Director of Policy and Advocacy

The National College Access Network is pleased to announce our support of the “Equitable Student Aid Access Act,” introduced by Rep. Lloyd Doggett (D-TX). This bill is an important next step in the endeavor to simplify access to federal student aid for low-income students. This bill makes permanent the change to using prior-prior year income data and launching the Free Application for Federal Student Aid (FAFSA) early; reinstates a previous, more generous adjusted gross income (AGI) to guarantee a full Pell Grant; and expands automatic Pell Grants for low-income students who receive certain means-tested benefits.

“Families who receive means-tested benefits should not have to prove again and again that they are poor,” NCAN Executive Director Kim Cook said. “The other elements of the bill return old benefits and make permanent new ones, but the change to allow families receiving particular means-tested benefits families to be guaranteed a full Pell Grant is one that NCAN strongly supports to better serve our students.”

The expansion of means-tested benefit recipients who are able to automatically access a full Pell Grant is similar to NCAN’s Streamlined FAFSA model. If this bill were to become law, certain means-tested benefit recipients would have to answer fewer financial questions and would receive a full Pell Grant rather than a partial Pell Grant. In the NCAN model, the same students would receive the full Pell Grant, but they would not need to answer any financial questions at all.

The bill would provide several changes to the financial aid application process:

  1. Codifies the use of prior-prior year income data on the FAFSA and the release of the FAFSA on Oct. 1.
  2. Requires the optional data transfer through the Data Retrieval Tool between the Internal Revenue Service and Education Department, pursuant to taxpayer consent.
  3. Returns to $30,000 the AGI threshold used to determine whether a student qualifies for an automatic maximum Pell Grant.
  4. Mandates that if a filer or his family qualifies for a federal means-tested benefit program, he is eligible for the automatic full Pell Grant and automatic zero Expected Family Contribution (auto zero EFC). These federal means-tested benefit programs are: Supplemental Security Income (SSI); Supplemental Nutrition Assistance Program (SNAP); Temporary Assistance for Needy Families (TANF); and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

According to Rep. Doggett’s announcement of the bill, several of his ideas emerged from a meeting with College Forward in February. “College Forward is encouraged by any steps taken to simplify the complex financial aid process," said Austin Buchan, CEO of College Forward. "We're thrilled that Rep. Doggett has made this issue a priority after hearing our students' stories."

The current FAFSA filing process uses prior-prior year income data and starts on Oct. 1. Adding these elements into law would mean students can rely on this system moving forward, and there won’t be changes every few years depending on who sits in the U.S. Secretary of Education’s office. Allowing students whose families have an AGI under $30,000 to automatically receive a full Pell Grant returns the program to a previous generosity level that was cut during tight budget constraints. Families earning under $30,000 fall in bottom 30 percent or lower of earners.

Finally, the current FAFSA asks if a student or any family member receives one of several means-tested benefits. Dependent filers who can answer yes to this question, and have an AGI under $25,000, automatically receive an auto zero EFC, guaranteeing them a full Pell Grant. Independent filers and filers who have an AGI between $25,000 and $50,000 are not granted the auto zero EFC. The change in this bill would expand the number of students who receive a full Pell Grant based on already having proven they are low-income by receipt of TANF, SNAP, WIC or SSI.

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