Students Are Receiving Admissions Letters But No Word on Financial Aid Because of Arcane Tax Rules

Changes Would Streamline Disjointed FAFSA Timeline, Ease Burden On Students And Institutions / As Concerns About College Affordability Increase Knowing One’s Financial Aid Package Is More Crucial Than Ever for Families, Students / Dept of Ed Has New Authority to Ease Concerns For Students and Families- Bipartisan Group of Lawmakers Sends New Letter Urging Quick Action

Students Are Receiving Admissions Letters But No Word on Financial Aid Because of Arcane Tax Rules

WASHINGTON, D.C. – With high school graduation season in full swing, U.S. Senator Bob Casey (D-PA), Tammy Baldwin (D-WI), Barbara Mikulski (D-MD), Michael Bennet (D-CO), Cory Booker (D-NJ), and Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Patty Murray (D-WA), along with U.S. Representatives Mark Pocan (D-WI) and Lloyd Doggett (D-TX), have led a bipartisan group of 53 Members of Congress in sending a letter to U.S. Department of Education Secretary Arne Duncan urging him to use his authority to allow the use of data from the second preceding tax year, also known as “prior-prior year” data when students are filling out the Free Application for Federal Student Aid (FAFSA) in applying to college or university. Currently, many students across the country are receiving their college admissions letters without the accompanying financial aid award information they need to compare college options and costs.

“Earlier and more accurate financial aid award information would allow students and families, and especially low-income and first generation students, to make better-informed decisions about their educational careers,” the Members of Congress wrote. “Unfortunately, the current limitation on the tax data students and families can use on the FAFSA has created a highly disjointed process and timeline. The complexity of the financial aid application process also undermines educational aspirations, enrollment, and persistence. Resolving this situation will be an important priority for our work to reauthorize the Higher Education Act. However, we do not need to wait to provide students and families much-needed relief. The Department can and should improve the process of filling out the FAFSA right now.”

Most families’ incomes do not change significantly from year-to-year, yet the current process forces applicants to wait until January 1 of each year—far after many college application deadlines—to complete the FAFSA in the same year they plan to enroll using the prior year’s tax data. When the FAFSA becomes available, many students and their families struggle to obtain tax documents quickly enough for dozens of local, state and private grant deadlines. The short window provided for filing taxes before filling out the FAFSA places students and families in a difficult situation with few good options.

Under their authority, the Department can allow students to use prior-prior year data, which is more likely to be on file and much easier to import directly into the FAFSA. This will speed up the application process and help reduce the burden of verification for documenting their financial situation and aid eligibility. Prior-prior year data is also not likely to have a significant effect on students’ financial aid awards.  Financial aid administrators, admissions officers, state grant agencies, and college access programs also strongly support using this data.

Read the Senate and House letters.

Joining Casey, Baldwin, Mikulski, Bennet, Booker, and Murray in the Senate were: Senators Tim Kaine (D-VA), Sherrod Brown (D-OH), Al Franken (D-MN), Edward Markey (D-MA), Mazie Hirono (D-HI), Maria Cantwell (D-WA), Elizabeth Warren (D-MA), Ben Cardin (D-MD), Brian Schatz (D-HI), Debbie Stabenow (D-MI), Joe Donnelly (D-IN), Barbara Boxer (D-CA), Jon Tester (D-MT), Jeff Merkley (D-OR), Chris Coons (D-DE), Ron Wyden (D-OR), Jack Reed (D-RI), Angus King, Jr. (I-ME), Richard Durbin (D-IL), Heidi Heitkamp (D-ND), Chris Murphy (D-CT), Sheldon Whitehouse (D-RI), Bernard Sanders (I-VT), Dianne Feinstein (D-CA), and Charles Schumer (D-NY).

Joining Pocan and Doggett in the House were: Representatives Suzanne Bonamici (D-OR), Cheri Bustos (D-IL), Peter DeFazio (D-OR), Debbie Dingell (D-MI), Larry Buschon (R-IN), Raul Grijalva (D-AZ), Alcee Hastings (D-FL), Ron Kind (D-WI), Marcy Kaptur (D-OH), William Keating (D-MA), Ruben Hinojosa (D-TX), Sander Levin (D-MI), Gwen Moore (D-WI), Charles Rangel (D-NY), Jan Schakowsky (D-IL), Bobby Scott (D-VA), Frederica Wilson (D-FL), Dennis Ross (R-FL), Debbie Wasserman Schultz (D-FL), Andre Carson (D-IN), Suzan DelBene (D-WA), Ted Deutch (D-FL), Bill Foster (D-IL), Derek Kilmer (D-WA), Jared Polis (D-CO), Peter Welch (D-VT), and Dan Kildee (D-MI).  

Full text of the letters:

Dear Secretary Duncan:

We write to request that the U.S. Department of Education use its authority to improve the financial aid process, empower consumers, and increase college access by allowing students to fill out the Free Application for Federal Student Aid (FAFSA) earlier.

Right now, many students across the country are receiving their college admissions letters without the accompanying financial aid award information they need to compare college options and costs. Earlier and more accurate financial aid award information would allow students and families, and especially low-income and first generation students, to make better-informed decisions about their educational careers. Unfortunately, the current limitation on the tax data students and families can use on the FAFSA has created a highly disjointed process and timeline. The complexity of the financial aid application process also undermines educational aspirations, enrollment, and persistence. Resolving this situation will be an important priority for our work to reauthorize the Higher Education Act. However, we do not need to wait to provide students and families much-needed relief. The Department can and should improve the process of filling out the FAFSA right now.

The Department should use its authority under Section 480(a) of the Higher Education Act[1] to allow the use of data from the second preceding tax year, also known as “prior-prior year” data. Most families’ incomes do not change significantly from year-to-year, yet the current process forces applicants to wait until January 1 of each year—far after many college application deadlines—to complete the FAFSA in the same year they plan to enroll using the prior year’s tax data. When the FAFSA becomes available, many students and their families struggle to obtain tax documents quickly enough for dozens of local, state and private grant deadlines. The short window provided for filing taxes before filling out the FAFSA places students and families in a difficult situation with few good options.

Under your authority, the Department can allow students to use prior-prior year data, which is more likely to be on file and much easier to import directly into the FAFSA. This will speed up the application process and help reduce the burden of verification for documenting their financial situation and aid eligibility. Prior-prior year data is also not likely to have a significant effect on students’ financial aid awards.  Financial aid administrators, admissions officers, state grant agencies, and college access programs also strongly support using this data.

Finally, using prior-prior year data would help alleviate the burden on colleges and universities. Institutions of higher education are required to verify FAFSA information to ensure that scarce student aid funds are flowing to the right students. The recent Task Force on Federal Regulation of Higher Education identified verification as a significant drain on financial aid offices and the source of the biggest burden associated with regulatory compliance. In contrast, verification of elements already contained on filed tax returns is relatively easy for aid administrators to document and process. Prior-prior year data is often already on file, so shifting to this data would allow students and their families, the federal government, and institutions of higher education to use more accurate information and simplify the verification process to ensure taxpayer dollars are appropriately spent.

Given the enormous benefits to students, families, and institutions of higher education, we strongly urge you to use your authority to allow the use of prior-prior year data on the FAFSA. This is an opportunity for swift and consequential action to support low- and- middle-income students seeking a shot at the American dream through higher education, and would allow the federal government to simplify the process that millions of students and families experience when applying for aid.  It will also support informed decision-making about college options, and help students receive the financial aid they need to complete a degree or credential. The current process that students and families must navigate when filling out the FAFSA is significantly disjointed, and we urge you to help fix it for them.

Thank you for your attention to this matter.

View an online version of this release here.

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