News: Federal Policy & Advocacy

Help Support Senate Bill to Simplify the FAFSA Process for Students

Wednesday, November 14, 2018  
Posted by: Carrie Warick, Director of Policy and Advocacy
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Late yesterday, the leaders of the Senate Health, Education, Labor, and Pensions (HELP) Committee introduced a bipartisan bill that takes a big step forward in simplifying the FAFSA filing process. The Faster Access to Federal Student Aid (FAFSA) Act would make it easier to transfer tax information, decrease the burden of verification, improve the income-driven repayment plan application process, and make data transfer safer.

Lead sponsor and committee chair Sen. Lamar Alexander (R-TN) is joined by ranking member Sen. Patty Murray (D-WA) as well as Sens. Cory Gardner (R-CO) and Sheldon Whitehouse (D-RI) in sponsoring this bill.

"This bill achieves one of NCAN’s longtime FAFSA simplification goals of enhanced data-sharing among federal agencies," says Kim Cook, executive director of NCAN. "The FAFSA Act’s transfer of tax return information to the Department of Education from the Department of the Treasury, including verification of non-filing, would significantly reduce a currently burdensome process that is a major barrier to FAFSA completion for many of our students and families."

This bill is not the end of the quest to simplify the financial aid application, but it is a big step forward. For that reason, NCAN supports this bill and asks our members to do the same.

There are only a few weeks left in the Congress, so action must be quick. Please contact your elected officials to tell them why these changes would make it easier for students to access financial aid and to ask for their support.

Here are some additional details about what exactly the bill would do.

Make It Easier to Transfer Tax Information

The FAFSA Act calls for a change in the Internal Revenue Code (IRC) Section 6103(I) to allow for direct transfer of tax information from the Department of Treasury to the Department of Education (ED).

In the current FAFSA process, filers may transfer their own data using the IRS Data Retrieval Tool. But the DRT is not available to all FAFSA filers, depending on their tax filing status. Other filers have difficulty logging into the DRT because of the stringent login requirements. Most crucially, the 37 percent of FAFSA filers who are not required to file income tax returns are unable to use the DRT to confirm their non-filing status.

The new transfer process created by the FAFSA Act would greatly expand the access to already-verified IRS data and remove the need to complete several financial fields for many FAFSA filers.

Decrease the Burden of Verification

Verification is the audit-like process that requires students to supplement the large swaths of information they submitted on the FAFSA with additional proof of their low-income status. It has deterred too many Pell-eligible students from receiving the aid for which they appear to qualify.

Under the FAFSA Act, nearly all applicants would have their tax information transferred to the FAFSA, which should significantly reduce the need for verification. Perhaps most crucially, Treasury will also be able to identify for ED which students and families are non-tax filers, which means these individuals would no longer have to complete the Verification of Non-Filer (VONF) process.

Improve Income-Driven Repayment Process

Under the FAFSA Act, individuals enrolled in an income-driven student loan repayment plan would no longer have to certify their income every year.

The current process requires annual recertification. The paperwork for this process can be confusing, which causes many borrowers to make mistakes or miss the deadline, lose IDR eligibility, and return to a standard repayment plan that makes it harder to stay on top of their loans.

If the FAFSA Act becomes law, borrowers would have less paperwork, and there would potentially be a reduction in defaults and delinquencies. These are outcomes are wins for both borrowers and taxpayers.

Make Data Transfer Safer

This new bill will enhance the security of the tax information transferred between the Departments of Treasury and Education while also improving the standards of data security at ED. Further, bill ensures protections allowing ED to transfer the data to states and institutions to use for their financial aid disbursement.

Again, time is short for us to express our support for this bill. Please visit our advocacy action center to quickly and easily tell your members of Congress how the FAFSA Act would help your students.