II
115th CONGRESS
2d Session
S. 3353
IN THE SENATE OF THE UNITED STATES
August 16, 2018
Mr. Booker (for himself, Mr. Blumenthal, Mrs. Gillibrand, Mr. Merkley, Mr. Jones, Ms. Harris, and Ms. Cortez Masto) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions
A BILL
To amend the Higher Education Act of 1965 to require the Secretary to provide for the use of data from the second preceding tax year to carry out the simplification of applications for the estimation and determination of financial aid eligibility, to increase the income threshold to qualify for zero expected family contribution, and for other purposes.
Short title
This Act may be cited as the Simplifying Financial Aid for Students Act of 2018
.
Using data for second preceding year
Section 480(a)(1)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(a)(1)(B)) is amended to read as follows:
Notwithstanding section 478(a) and beginning not later than 180 days after the date of enactment of the Simplifying Financial Aid for Students Act of 2018, the Secretary shall provide for the use of data from the second preceding tax year when and to the extent necessary to carry out the simplification of applications (including simplification for a subset of applications) used for the estimation and determination of financial aid eligibility. Such simplification shall include the sharing of data between the Internal Revenue Service and the Department, pursuant to the consent of the taxpayer.
.
Family contribution
Family contribution
Section 473(b) of the Higher Education Act of 1965 (20 U.S.C. 1087mm(b)) is amended—
by striking the subsection heading and inserting Zero family contribution
;
in paragraph (1), by adding or (3)
after paragraph (2)
;
in paragraph (2)—
by striking the paragraph heading and inserting Children of certain deceased veterans
;
in each of subparagraphs (B) and (C), by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively and adjusting the margins accordingly;
by redesignating subparagraphs (A), (B), and (C), as clauses (i), (ii), and (iii), respectively; and
by striking Paragraph (1) shall
and inserting the following:
Applicability
Paragraph (1) shall
;
in paragraph (3)—
in subparagraph (A), by striking subparagraphs (A), (B)(i), and (C) of paragraph (2)
and inserting clause (i), (ii)(I), and (iii) of subparagraph (A)
;
in subparagraph (B)—
by striking subparagraphs (A), (B)(ii), and (C) of paragraph (2)
and inserting clause (i), (ii)(II), and (iii) of subparagraph (A)
; and
by redesignating clauses (i) through (iii) as subclauses (I) through (III), respectively, and adjusting the margins accordingly; and
by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and adjusting the margins accordingly;
by redesignating paragraph (3) as subparagraph (B), and adjusting the margins accordingly; and
by inserting after paragraph (2)(B), as redesignated by paragraph (5), the following:
Recipients of certain means-tested benefits
In General
Paragraph (1) shall apply to a student if—
that student is a dependent student whose parent participated in a means-tested Federal benefits program at any time during the period encompassed from the beginning of the second prior calendar year through the date of filing; or
that student is independent and the student or spouse of that student participated in a means-tested Federal benefits program at any time during the period encompassed from the beginning of the second prior calendar year through the date of filing.
Means-tested Federal benefits program
In this paragraph, the term means-tested Federal benefits program means—
the supplemental security income program under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.);
the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.);
the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.);
a State program funded under the temporary assistance for needy families program under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);
the special supplemental nutrition program for women, infants, and children established by section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786); and
any other program determined by the Secretary to be appropriate based on—
the reliability under which the need for benefits from the program is established; and
the feasibility of data linkages.
.
Simplified needs test
Section 479 of the Higher Education Act of 1965 (20 U.S.C. 1087ss) is amended to read as follows:
Simplified needs tests
Simplified application section
In general
The Secretary shall develop and use an easily identifiable simplified application section as part of the common financial reporting form prescribed under section 483(a) for families described in subsections (b) and (c) of this section.
Reduced data requirements
The simplified application form shall—
in the case of a family meeting the requirements of subsection (b)(1), permit such family to submit only the data elements required under subsection (b)(2) for the purposes of establishing eligibility for student financial aid under this part; and
in the case of a family meeting the requirements of subsection (c), permit such family to be treated as having an expected family contribution equal to zero for purposes of establishing such eligibility and to submit only the data elements required to make a determination under subsection (c).
Simplified needs test
Eligibility
An applicant is eligible to file a simplified form containing the elements required by paragraph (2) if—
the applicant did not file and was not required to file any Federal tax return during the 24-month period preceding the date of the determination of eligibility;
the applicant, or, in the case of an applicant who is a dependent student, the applicant's parent, participated in a means-tested Federal benefits program, as described in section 473(b)(3)(B), during the 24-month period preceding the date of the determination of eligibility;
the applicant, or, in the case of an applicant who is a dependent student, the applicant's parent, filed a form 1040A, 1040EZ, or 1040 (including any prepared or electronic version of such form) required pursuant to the Internal Revenue Code of 1986, with no forms or schedules, during the 24-month period preceding the date of the determination of eligibility;
in the case of an applicant who is a dependent student—
the student's parents include at least one parent who is a dislocated worker; and
the total adjusted gross income of the parents (excluding any income of the dependent student) is less than $50,000; or
in the case of an applicant who is an independent student—
the student is a dislocated worker or has a spouse who is a dislocated worker; and
the adjusted gross income of the student (and the student's spouse, if any) is less than $50,000.
Simplified test elements
The six elements to be used for the simplified needs analysis are—
adjusted gross income;
Federal taxes paid;
untaxed income and benefits;
the number of family members;
the number of family members in postsecondary education; and
an allowance (A) for State and other taxes, as defined in section 475(c)(2) for dependent students and in section 477(b)(2) for independent students with dependents other than a spouse, or (B) for State and other income taxes, as defined in section 476(b)(2) for independent students without dependents other than a spouse.
Qualifying forms
In the case of an independent student, the student, or in the case of a dependent student, the family, files a form described in this subsection, or subsection (c), as the case may be, if the student or family, as appropriate, files—
a form 1040A or 1040EZ (including any prepared or electronic version of such form) required pursuant to the Internal Revenue Code of 1986;
a form 1040 (including any prepared or electronic version of such form) required pursuant to the Internal Revenue Code of 1986, except that such form shall be considered a qualifying form only if the student or family files such form in order to take a tax credit under section 25A of the Internal Revenue Code of 1986, and would otherwise be eligible to file a form described in subparagraph (A); or
an income tax return (including any prepared or electronic version of such return) required pursuant to the tax code of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau.
Zero expected family contribution
The Secretary shall consider an applicant to have an expected family contribution equal to zero if—
in the case of a dependent student—
the student's parents include at least one parent who is a dislocated worker; and
the sum of the adjusted gross annual income of the parents is less than or equal to $36,000; or
in the case of an independent student with dependents other than a spouse—
the student (and the student's spouse, if any) is a dislocated worker or has a spouse who is a dislocated worker; and
the sum of the adjusted gross annual income of the student and spouse (if appropriate) is less than or equal to $36,000.
Dislocated worker
In this section, the term dislocated worker has the meaning given the term in section 3 of the Workforce Innovation and Opportunity Act.
.
FAFSA simplification
FAFSA simplification
Section 483(f) of the Higher Education Act of 1965 (20 U.S.C. 1090(f)) is amended to read as follows:
Reduction of income and asset information To determine eligibility for student financial aid
Use of Internal Revenue Service data retrieval tool to populate FAFSA
The Secretary shall—
make every effort to make available and allow applicants to utilize the data retrieval tool that is in existence on the date of enactment of the Simplifying Financial Aid for Students Act of 2018 to transfer data available from the Internal Revenue Service to reduce the amount of original data entry by applicants and strengthen the reliability of data used to calculate expected family contributions, including through the use of technology to—
allow an applicant to automatically populate the electronic version of the forms under this section with data available from the Internal Revenue Service;
direct an applicant to appropriate questions on such forms based on the applicant’s answers to previous questions;
identify the type of form filed and whether certain forms or schedules, as identified by the Secretary, were filed with Federal form 1040; and
allow an applicant to verify that the applicant or the family of the applicant did not file a Federal tax return without additional action on the part of the student; and
allow single taxpayers, married taxpayers filing jointly, and married taxpayers filing separately to utilize such data retrieval tool to its full capacity.
Strengthening the IRS data retrieval tool
The Secretary shall work with the Secretary of the Treasury to expand the capabilities of the Internal Revenue Service data retrieval tool by—
incorporating all fields from Federal tax returns and W2 forms relevant to needs analysis; and
incorporating line items from forms and schedules identified by the Secretary into the data retrieval tool.
Cross agency linkages
In general
The Secretary, in coordination with the head of each agency that administers a specified means-tested Federal benefits program, shall examine how the agency can verify an applicant or an applicant’s family’s receipt of specified means-tested Federal benefits in order to compute an expected family contribution for low-income students in order to simplify, for students, the application process for student financial assistance.
Automatic maximum Federal Pell Grant
The Secretary shall ensure that a student who is described in section 473(b)(3) or whose adjusted gross income or family adjusted gross income is less than $36,000 annually during the 24-month period preceding the date of the determination, is a full-time student, and submits a form under this section, shall receive a maximum Federal Pell Grant and a zero expected family contribution determination without additional action on the part of the student or the family of the student.
Part-time students
The Secretary shall ensure that a part-time student who is described in section 473(b)(3) and submits a form under this section shall receive a zero expected family contribution determination.
Report
The Secretary shall report to Congress annually on the Department's progress in maintaining and expanding the Internal Revenue Service data retrieval tool and in establishing cross agency linkages, as described in this subsection, and simultaneously make such reports publicly available.
.
Mobile use
Section 483(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 1090(a)(3)) is amended by adding at the end the following:
Mobile device format
The Secretary shall make the electronic version of the forms under this paragraph available through a technology tool that can be used on mobile devices. Such technology tool shall, at a minimum, enable applicants to—
save data; and
submit the electronic version of the forms under this paragraph to the Secretary through such tool.
.
Languages for FAFSA
The Secretary, in conjunction with the Director of the Census Bureau, shall determine the most common languages spoken at home in the United States and shall develop versions of the FAFSA form in each of those languages.
Outreach by financial aid advisors
Section 483 of the Higher Education Act of 1965 (20 U.S.C. 1090 et seq.) is amended by adding at the end the following:
Outreach by financial aid advisors
An institution of higher education may use information provided on a FAFSA to reach out to and counsel a student on the student's eligibility for means-tested benefits in which the student is not enrolled and outside scholarships for which a student is eligible.
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Definitions of total income and assets
Total income
Section 480(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(a)(1)) is amended to read as follows:
In general
Except as provided in paragraph (2), the term total income is equal to—
in the case of an individual who has not filed, and is not required to file, any Federal tax return or in the case of a qualified recipient of a means-tested Federal benefits program, as defined in section 473(b)(3)(B), earned income for the second preceding tax year minus excludable income (as defined in subsection (e));
in the case of an individual who filed a Federal form 1040EZ, 1040A, or 1040 with no forms or schedules, adjusted gross income plus untaxed income and benefits for the second preceding tax year minus excludable income (as defined in subsection (e)); and
in the case of an individual who filed a Federal form 1040 with forms or schedules or in the case of an individual who filed a foreign tax return in lieu of a Federal tax return, adjusted gross income plus untaxed income and benefits for the second preceding fiscal tax year minus excludable income (as defined in subsection (e)).
.
Conforming amendment
Section 480(a) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(a)) is amended—
by moving paragraph (2) two ems to the right; and
in paragraph (2), by striking No portion
and inserting the following: Amounts not included.—No portion
.
Untaxed income and benefits
Section 480(b) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(b)) is amended to read as follows:
Untaxed income and benefits
The term untaxed income and benefits means—
the aggregate amount of losses taken into account for determining adjusted gross income on Federal form 1040;
the amount of any tax-exempt interest income reported on Federal form 1040; and
amounts of foreign income excluded from adjusted gross income and reported on Federal form 2555.
.
Excludable income
Section 480(e) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(e)) is amended to read as follows:
The term excludable income means—
any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this title; and
payments made and services provided under part E of title IV of the Social Security Act (42 U.S.C. 670 et seq.) to or on behalf of any child or youth over whom the State agency has responsibility for placement, care, or supervision, including the value of vouchers for education and training and amounts expended for room and board for youth who are not in foster care but are receiving services under section 477 of such Act (42 U.S.C. 677).
.
Assets
Section 480(f)(1) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(1)) is amended by striking The term
and all that follows through the period at the end and inserting the following:
In determining the value of assets in a determination of need under this title—
in the case of an individual who has not filed, and is not required to file, any Federal tax return or in the case of a qualified recipient of a means-tested Federal benefits program, as defined in section 473(b)(3)(B), the individual's assets shall be considered to be equal to zero; and
in the case of a parent of a dependent student or in the case of an independent student with dependents other than a spouse, the individual's assets shall be considered to be equal to zero if that parent or independent student filed a Federal form 1040EZ, 1040A, or 1040 with no forms or schedules.
In the case of an individual who filed a form 1040 with forms or schedules, the term assets means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, qualified education benefits (except as provided in paragraph (3)), and the net value of real estate, income producing property, and business and farm assets, excluding the primary home.
.
Special combat pay
Section 480 of the Higher Education Act of 1965 (20 U.S.C. 1087vv) is amended—
in subsection (j), by striking paragraph (4); and
by striking subsection (n).
Eliminating unnecessary and burdensome questions
Prohibition
Section 483(a) of the Higher Education Act of 1965 (20 U.S.C. 1090(a)) is amended by adding at the end the following:
Prohibition of unnecessary and burdensome questions
Notwithstanding any other provision of law, the Secretary shall not include on any form developed under this section a question about—
the applicant's criminal history, registration for selective service, net worth of a business or farm, taxable earnings from need-based employment (such as from a Federal work-study program), combat pay, cooperative education program earnings, and income from any source which is not taxable for the taxable year, including income attributable to a pension or retirement plan, interest on tax-exempt bonds, military or clergy living allowance, and veterans benefits (other than education benefits); and
with respect to the applicant's parent, taxable earnings from need-based employment (such as from a Federal work-study program), college grant or scholarship aid reported to the Internal Revenue Service, combat pay, cooperative education program earnings, and income from any source which is not taxable for the taxable year, including income attributable to a pension or retirement plan, interest on tax-exempt bonds, military or clergy living allowance, and veterans benefits (other than education benefits).
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Removing burdensome requirements
In general
Part G of title IV of the Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended—
in section 484 (20 U.S.C. 1091)—
by striking subsections (n) and (r); and
by redesignating subsections (o), (p), (q), (s), and (t) as subsections (n), (o), (p), (q), and (r), respectively; and
in section 485 (20 U.S.C. 1092)—
by striking subsection (k); and
by redesignating subsections (l) and (m) as subsections (k) and (l), respectively.
Conforming amendments
Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) is amended—
in each of subparagraphs (C) and (D) of section 428(b)(3) (20 U.S.C. 1078(b)(3)), by striking 485(l)
and inserting 485(k)
;
in section 428B(f)(2) (20 U.S.C. 1078–2(f)(2)), by striking 484(p)
and inserting 484(o)
;
in each of subparagraphs (E) and (F) of section 435(d)(5) (20 U.S.C. 1085(d)(5)), by striking 485(l)
and inserting 485(k)
; and
in section 487(e)(2)(B)(ii)(IV) (20 U.S.C. 1094(e)(2)(B)(ii)(IV)), by striking (l) of section 485
and inserting (k) of section 485
.
Definitions for homeless and foster youth
Independent student
Section 480(d)(1)(H) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(d)(1)(H)) is amended—
in the matter preceding clause (i)—
by striking during the school year in which the application is submitted
;
by inserting age 23 or younger
after unaccompanied youth
; and
by striking terms are
and inserting term is
;
in clause (i), by inserting , or a designee of the liaison
after Act
;
in clause (ii), by striking a program funded under the Runaway and Homeless Youth Act
and inserting an emergency or transitional shelter, street outreach program, homeless youth drop-in center, or other program serving homeless youth,
; and
in clause (iii), by striking program funded under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act (relating to emergency shelter grants)
and inserting Federal TRIO program or a Gaining Early Awareness and Readiness for Undergraduate program under chapter 1 or 2 of subpart 2 of part A,
.
Foster care children and youth
Section 103 of the Higher Education Act of 1965 (20 U.S.C. 1003) is amended by adding at the end the following:
Foster care children and youth
The term foster care children and youth—
means children and youth whose care and placement are the responsibility of the State or Tribal agency that administers a State or Tribal plan under part B or E of title IV of the Social Security Act (42 U.S.C. 621 et seq. and 670 et seq.), without regard to whether foster care maintenance payments are made under section 472 of such Act (42 U.S.C. 672) on behalf of such children and youth; and
includes individuals who were age 13 or older when their care and placement were the responsibility of a State or Tribal agency that administered a State or Tribal plan under part B or E of title IV of the Social Security Act (42 U.S.C. 621 et seq. and 670 et seq.) and who are no longer under the care and responsibility of such a State or tribal agency, without regard to any such individual’s subsequent adoption, guardianship arrangement, or other form of permanency outcome.
.
Streamlining determinations and verification for homeless and foster youth
Section 480(d) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(d)) is amended by adding at the end the following:
Simplifying the determination process for unaccompanied youth
Verification
A financial aid administrator shall accept a homelessness determination made by any individual authorized to make such determinations under clause (i), (ii), or (iii) of paragraph (1)(H) in the absence of conflicting information. A documented phone call with, or a written statement from, one of the authorized individuals is sufficient verification when needed. For purposes of this paragraph, a financial aid administrator’s disagreement with the determination made by an authorized individual shall not be considered conflicting information.
Determination of independence
A financial aid administrator shall make a determination of independence under paragraph (1)(H) if a student does not have, and cannot get, documentation from any of the other designated authorities described in such paragraph. Such a determination shall be—
based on the definitions outlined in paragraph (1)(H);
distinct from a determination of independence under paragraph (1)(I);
based on a documented interview with the student; and
limited to whether the student meets the definitions in paragraph (1)(H) and not about the reasons for the student’s homelessness.
Simplifying the verification process for foster children and youth
Verification of independence
If an institution requires documentation to verify that a student is independent based on a status described in paragraph (1)(B), a financial aid administrator shall consider any of the following as adequate verification:
Submission of a court order or official State documentation that the student received Federal or State support in foster care.
A documented phone call with, or a written statement from—
a child welfare agency authorized by a State or county;
a Tribal child welfare authority;
an Independent Living case worker;
a public or private foster care placing agency or foster care facility or placement;
another program serving orphans, foster children and youth, or wards of the court; or
a probation officer.
A documented phone call with, or a written statement from, an attorney, a guardian ad litem, or a Court Appointed Special Advocate, documenting that person’s relationship to the student.
A documented phone call with, or a written statement from, a representative of a Federal TRIO program or a Gaining Early Awareness and Readiness for Undergraduate program under chapter 1 or 2 of subpart 2 of part A.
Verification of the student’s eligibility for an education and training voucher under the John H. Chafee Foster Care Independence Program under section 477 of the Social Security Act (42 U.S.C. 677).
Submission of a copy of the student’s biological or adoptive parents’—
Certificates of Death; or
newspaper obituaries.
An attestation from the student, which includes a description of why the student may qualify for a status described in paragraph (1)(B), including the approximate dates that the student was in foster care, dependent, or a ward of the court, to the best of the student’s knowledge after making reasonable efforts to provide any requested documentation.
Additional streamlining permitted
Nothing in this paragraph prohibits an institution from implementing polices that streamline the determination of independent status and improve a student’s access to financial aid because that student is an orphan, in foster care, or a ward of the court, or was an orphan, in foster care, or a ward of the court at any time when the student was 13 years of age or older.
Timing; use of earlier determination
Timing
A determination under subparagraph (B) or (H) of paragraph (1) for a student—
shall be made as quickly as practicable;
may be made as early as the year before the award year for which the student initially submits an application; and
shall be made no later than during the award year for which the student initially submits an application.
Use of earlier determination
Any student who is determined to be independent under subparagraph (B) or (H) of paragraph (1) for a preceding award year at an institution shall be presumed to be independent for a subsequent award year at the same institution unless—
the student informs the institution that circumstances have changed; or
the institution has specific conflicting information about the student’s independence, and has informed the student of this information and the opportunity to challenge such information through a documented interview or an impartial review by the Student Loan Ombudsman pursuant to section 141(f)(3).
Retention of documents
A financial aid administrator shall retain all documents related to the determination of independence under subparagraph (B) or (H) of paragraph (1), including documented interviews, for the duration of the student’s enrollment at the institution and for a minimum of 1 year after the student is no longer enrolled at the institution.
.
Consolidating questions regarding homeless status on the fafsa
Section 483(a)(4) of the Higher Education Act of 1965 (20 U.S.C. 1090(a)(4)) is amended by adding at the end the following:
Single question regarding homeless status
The Secretary shall ensure that, on each form developed under this section for which the information is applicable, there is a single, easily understood screening question to identify an applicant for aid who is—
an unaccompanied homeless child or youth (as such term is defined in section 725 of the McKinney-Vento Homeless Assistance Act); or
an unaccompanied youth who is self-supporting and at risk of homelessness.
.
Eligibility for Dreamers
Section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091), as amended by section 6(b), is further amended—
in subsection (a)(5), by inserting or be a Dreamer student
after becoming a citizen or permanent resident
; and
by adding at the end the following:
Dreamer student
In general
In this section, the term Dreamer student means an alien (as defined in section 101(a) of the Immigration and Nationality Act (8 U.S.C. 1101(a))) who—
has been continuously physically present in the United States for not less than the 4-year period preceding the date of enactment of the Simplifying Financial Aid for Students Act of 2018;
was younger than 18 years of age on the date on which the alien initially entered the United States; and
has been admitted to an institution of higher education;
has earned a high school diploma or a commensurate alternative award from a public or private high school, or has obtained a general education development certificate recognized under State law or a high school equivalency diploma in the United States;
is enrolled in secondary school or in an education program assisting students in obtaining a regular high school diploma or its recognized equivalent under State law, or in passing a general educational development exam, a high school equivalence diploma examination, or other similar State-authorized exam, and has made satisfactory progress in obtaining such diploma or passing such exam; or
has served for not less than 4 years in the uniformed services (as defined in section 101(a) of title 10, United States Code); and
in the case of an alien who has been discharged from the uniformed services, has received an honorable discharge.
Hardship exception
The Secretary shall issue regulations that direct when the Department shall waive the requirement of subparagraph (A) or (B), or both, of paragraph (1) for an individual to qualify as a Dreamer student under such paragraph, if the individual—
demonstrates compelling circumstances for the inability to satisfy the requirement of such subparagraph (A) or (B), or both; and
satisfies the requirement of paragraph (1)(C).
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