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S. 2667: FAFSA Simplification Act of 2019


The text of the bill below is as of Oct 22, 2019 (Introduced).


II

116th CONGRESS

1st Session

S. 2667

IN THE SENATE OF THE UNITED STATES

October 22, 2019

(for himself and Mr. Jones) 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 make it easier to apply for Federal student aid, to make that aid predictable, to amend the Federal Pell Grant program, and for other purposes.

1.

Short title

This Act may be cited as the FAFSA Simplification Act of 2019.

2.

Making it easier to apply for Federal aid and making that aid predictable

(a)

Need analysis

(1)

In general

Section 471 of the Higher Education Act of 1965 (20 U.S.C. 1087kk) is amended to read as follows:

471.

Amount of need

(a)

In general

Except as otherwise provided therein, beginning with award year 2021–2022, the amount of need of any student for financial assistance under this title (except subpart 1 or 2 of part A) is equal to—

(1)

the cost of attendance of such student, minus

(2)

the student aid index (as defined in section 473) for such student, minus

(3)

other financial assistance not received under this title (as defined in section 480(j)).

(b)

Effective date of changes

The amendments made to this title under the FAFSA Simplification Act of 2019 shall take effect beginning with award year 2021–2022. The amounts provided under such amendments for award year 2020–2021 shall be used solely as a base to determine adjustments for subsequent award years.

.

(2)

Maximum aid under part D

Section 451 of the Higher Education Act of 1965 (20 U.S.C. 1087a) is amended by adding at the end the following:

(c)

Maximum aid

The maximum dollar amount of financial assistance provided under this part to a student shall not exceed the cost of attendance for such student.

.

(3)

Guidance to states

The Secretary of Education shall issue guidance for States on interpretation and implementation of the terminology and formula adjustments made under the amendments made by this Act, including the student aid index, formerly known as the expected family contribution, and the need analysis formulas.

(b)

Student aid index

Section 473 of the Higher Education Act of 1965 (20 U.S.C. 1087mm) is amended to read as follows:

473.

Student aid index

(a)

In general

For the purpose of this title, other than subpart 1 or 2 of part A, the term student aid index means, with respect to a student, an index that reflects an evaluation of a student’s approximate financial resources to contribute toward the student’s postsecondary education for the academic year, as determined in accordance with this part.

(b)

Special rule for students eligible for the total maximum pell grant

The Secretary shall consider an applicant to automatically have a student aid index equal to zero if the applicant is eligible for the total maximum Federal Pell Grant under subpart 1 of part A, except if the applicant has a calculated student aid index of less than zero the Secretary shall consider the negative number as the student aid index for the applicant.

(c)

Special rule for nonfilers

For an applicant (or, as applicable, an applicant and spouse, or an applicant’s parents) not required filed a Federal tax return for the applicable tax year, the Secretary shall for the purposes of this title consider the student aid index as equal to −$1,500 for the applicant.

(d)

Special rule for recipients of means-Tested benefits

For an applicant (including the student, the student’s parent, or the student’s spouse, as applicable) who at any time during the previous 24-month period was a recipient of a means-tested Federal benefit program, the Secretary shall consider an applicant to automatically have a student aid index equal to zero, except if the applicant has a calculated student aid index of less than zero the Secretary shall consider the negative number as the student aid index for the applicant.

(e)

Means-Tested Federal benefit program

In this section, the term means-tested Federal benefit program means any of the following:

(1)

The supplemental security income program under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.).

(2)

The supplemental nutrition assistance program under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).

(3)

The program of block grants for States for temporary assistance for needy families established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.).

(4)

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).

(5)

The Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

.

(c)

Determination of student aid index

Section 474 of the Higher Education Act of 1965 (20 U.S.C. 1087nn) is amended to read as follows:

474.

Determination of student aid index

The student aid index—

(1)

for a dependent student shall be determined in accordance with section 475;

(2)

for a single independent student or a married independent student without dependents (other than a spouse) shall be determined in accordance with section 476; and

(3)

for an independent student with dependents other than a spouse shall be determined in accordance with section 477.

.

(d)

Student aid index for dependent students

Section 475 of the Higher Education Act of 1965 (20 U.S.C. 1087oo) is amended to read as follows:

475.

Student aid index for dependent students

(a)

Computation of student aid index

(1)

In general

For each dependent student, the student aid index is equal to (except as provided in paragraph (2)) the sum of—

(A)

the assessment of the parents' adjusted available income (determined in accordance with subsection (b));

(B)

the assessment of the student’s available income (determined in accordance with subsection (g)); and

(C)

the student’s available assets (determined in accordance with subsection (h)).

(2)

Exception

If the sum of paragraphs (1), (2), and (3) with respect to a dependent student is less than −$1,500, the student aid index for the dependent student shall be −$1,500.

(b)

Assessment of parents’ adjusted available income

The assessment of parents' adjusted available income is equal to the amount determined by—

(1)

computing adjusted available income by adding—

(A)

the parents' available income (determined in accordance with subsection (c)); and

(B)

the parents' available assets (determined in accordance with subsection (d));

(2)

assessing such adjusted available income in accordance with the assessment schedule set forth in subsection (e); and

(3)

considering such assessment resulting under paragraph (2) as the amount determined under this subsection.

(c)

Parents' available income

(1)

In general

The parents' available income is determined by subtracting from total income (as defined in section 480)—

(A)

Federal income taxes;

(B)

an allowance for payroll taxes, determined in accordance with paragraph (2);

(C)

an income protection allowance, determined in accordance with paragraph (3); and

(D)

an employment expense allowance, determined in accordance with paragraph (4).

(2)

Allowance for payroll taxes

The allowance for payroll taxes is equal to the sum of—

(A)

the total amount earned by the parents, multiplied by the rate of tax under section 3101(b) of the Internal Revenue Code of 1986; and

(B)

the amount earned by the parents that does not exceed such contribution and benefit base (twice such contribution and benefit base, in the case of a joint return) for the year of the earnings, multiplied by the rate of tax applicable to such earnings under section 3101(a) of such Code.

(3)

Income protection allowance

The income protection allowance for award year 2020–2021 and each succeeding award year shall equal the amount determined in the following table, as adjusted by the Secretary pursuant to section 478(b):

Income Protection Allowance 2020–2021 (to be adjusted for 2021–2022 and succeeding years)
Family Size (including student)Amount
2$19,080
3$23,760
4$29,340
5$34,620
6$40,490
For each additional add$4,750.
(4)

Employment expense allowance

The employment expense allowance is equal to the lesser of $4,000 or 35 percent of the single parent’s earned income or married parents’ combined earned income (or is equal to a successor amount as adjusted by the Secretary pursuant to section 478(g)).

(d)

Parents' available assets

(1)

In general

(A)

Determination

Except as provided in subparagraph (B), the parents' available assets are equal to—

(i)

the difference between the parents’ net assets and the education savings and asset protection allowance (determined in accordance with paragraph (2)); multiplied by

(ii)

12 percent.

(B)

Not less than zero

Parents’ available assets under this subsection shall not be less than zero.

(2)

Education savings and asset protection allowance

The education savings and asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478(d)):

Education Savings and Asset Protection Allowances for Parents of Dependent Students
If the age of the oldest parent is—And there are
two parentsone parent
then the allowance is—
25 or less$0$0
26$300$100
27$700$200
28$1,000$300
29$1,300$500
30$1,600$600
31$2,000$700
32$2,300$800
33$2,600$900
34$2,900$1,000
35$3,300$1,100
36$3,600$1,200
37$3,900$1,300
38$4,200$1,500
39$4,600$1,600
40$4,900$1,700
41$5,100$1,700
42$5,200$1,700
43$5,300$1,800
44$5,400$1,800
45$5,500$1,900
46$5,700$1,900
47$5,800$1,900
48$6,000$2,000
49$6,100$2,000
50$6,300$2,100
51$6,400$2,100
52$6,600$2,200
53$6,800$2,200
54$6,900$2,300
55$7,100$2,300
56$7,300$2,400
57$7,500$2,500
58$7,700$2,500
59$7,900$2,600
60$8,200$2,700
61$8,400$2,700
62$8,600$2,800
63$8,900$2,900
64$9,200$2,900
65 or more$9,400$3,000.
(e)

Assessment schedule

The assessment of the parents’ adjusted available income (as determined under subsection (b)(1) and hereafter in this subsection referred to as AAI) is calculated according to the following table (or a successor table prescribed by the Secretary under section 478(e)):

Parents' Contribution From AAI
If the parents' AAI is—Then the parents' contribution from AAI is—
Less than –$6,820–$1,500
–$6,820 to $17,00022% of AAI
$17,001 to $21,400$3,740 + 25% of AAI over $17,000
$21,401 to $25,700$4,840 + 29% of AAI over $21,400
$25,701 to $30,100$6,087 + 34% of AAI over $25,700
$30,101 to $34,500$7,583 + 40% of AAI over $30,100
$34,501 or more$9,343 + 47% of AAI over $34,500.
(f)

Consideration of parental income

(1)

Married parents

Parental income and assets in the case of student whose parents are married and not separated shall include the income and assets of both parents.

(2)

Divorced or separated parents

Parental income and assets for a student whose parents are divorced or separated, but not remarried, is determined:

(A)

By including only the income and assets of the parent with whom the student resided for the greater portion of the 12-month period preceding the date of the application.

(B)

If the preceding criterion does not apply, include only the income and assets of the parent who provided the greater portion of the student's support for the 12-month period preceding the date of application.

(C)

If neither of the preceding criteria apply, include only the income and assets of the parent who provided the greater support during the most recent calendar year for which parental support was provided.

(3)

Death of a parent

Parental income and assets in the case of the death of any parent is determined as follows:

(A)

If either of the parents has died, the surviving parent shall be considered a single parent, until that parent has remarried.

(B)

If both parents have died, the student shall not report any parental income or assets.

(4)

Remarried parents

If a parent whose income and assets are taken into account under paragraph (2), or if a parent who is a widow or widower and whose income is taken into account under paragraph (3), has remarried, the income of that parent's spouse shall be included in determining the parent's assessment of adjusted available income if the student's parent and the stepparent are married as of the date of application for the award year concerned.

(5)

Single parent who is not divorced or separated

Parental income and assets in the case of a student whose parent is a single parent but who is not divorced, separated, or remarried, shall include the income and assets of such single parent.

(g)

Student’s available income

(1)

In general

The student’s available income is equal to—

(A)

the difference between the student's total income (determined in accordance with section 480) and the adjustment to student income (determined in accordance with paragraph (2)); multiplied by

(B)

50 percent.

(2)

Adjustment to student income

The adjustment to student income is equal to the sum of—

(A)

the Federal income taxes of the student;

(B)

an allowance for payroll taxes determined in accordance with paragraph (3);

(C)

an income protection allowance that is equal to—

(i)

$9,110 for award year 2020–2021; and

(ii)

for each succeeding award year, the amount adjusted pursuant to section 478(b); and

(D)

an allowance for parents' negative available income, determined in accordance with paragraph (4).

(3)

Allowance for payroll taxes

The allowance for payroll taxes is equal to the sum of—

(A)

the total amount earned by the student, multiplied by the rate of tax under section 3101(b) of the Internal Revenue Code of 1986; and

(B)

the amount earned by the student that does not exceed such contribution and benefit base for the year of the earnings, multiplied by the rate of tax applicable to such earnings under section 3101(a) of such Code.

(4)

Allowance for parents' negative available income

The allowance for parents' negative available income is the amount, if any, by which the sum of the amounts deducted under subparagraphs (A) through (D) of subsection (c)(1) exceeds the sum of the parents' total income (as defined in section 480) and the parents' available assets (as determined in accordance with subsection (d)).

(h)

Student’s assets

The student’s assets are determined by calculating the net assets of the student and multiplying such amount by 20 percent, except that the result shall not be less than zero.

.

(e)

Student aid index for independent students without dependents other than a spouse

Section 476 of the Higher Education Act of 1965 (20 U.S.C. 1087pp) is amended to read as follows:

476.

Student aid index for independent students without dependents other than a spouse

(a)

Computation of student aid index

(1)

In general

For each independent student without dependents other than a spouse, the student aid index is equal to (except as provided in paragraph (2)) the sum of—

(A)

the family's available income (determined in accordance with subsection (b)); and

(B)

the family's available assets (determined in accordance with subsection (c)).

(2)

Exception

If the sum of paragraphs (1) and (2) with respect to a independent student without dependents other than a spouse is less than −$1,500, the student aid index for the independent student shall be −$1,500.

(b)

Family's available income

(1)

In general

The family's available income is determined by—

(A)

deducting from total income (as defined in section 480)—

(i)

Federal income taxes;

(ii)

an allowance for payroll taxes, determined in accordance with paragraph (2);

(iii)

an income protection allowance that is equal to—

(I)

in the case of a single independent student without dependents—

(aa)

$14,190 for award year 2020–2021; and

(bb)

for each succeeding award year, the amount adjusted pursuant to section 478(b); and

(II)

in the case of a married independent student without dependents—

(aa)

$22,750 for award year 2020–2021; and

(bb)

for each succeeding award year, the amount adjusted pursuant to section 478(b); and

(iv)

in the case of a married independent student, an employment expense allowance, as determined in accordance with paragraph (3); and

(B)

multiplying the amount determined under subparagraph (A) by 50 percent.

(2)

Allowance for payroll taxes

The allowance for payroll taxes is equal to the sum of—

(A)

the total amount earned by the student (and spouse, if appropriate), multiplied by the rate of tax under section 3101(b) of the Internal Revenue Code of 1986; and

(B)

the amount earned by the student (and spouse, if appropriate) that does not exceed such contribution and benefit base (twice such contribution and benefit base, in the case of a joint return) for the year of the earnings, multiplied by the rate of tax applicable to such earnings under section 3101(a) of such Code.

(3)

Employment expenses allowance

The employment expense allowance is equal to the following:

(A)

If the student is married, such allowance is equal to the lesser of $4,000 or 35 percent of the couple’s combined earned income (or is equal to a successor amount as adjusted by the Secretary pursuant to section 478(g)).

(B)

If the student is not married, the employment expense allowance is zero.

(c)

Family’s available assets

(1)

In general

(A)

Determination

Except as provided in subparagraph (B), the family's available assets are equal to—

(i)

the difference between the family's assets (as defined in section 480(f)) and the asset protection allowance (determined in accordance with paragraph (2)); multiplied by

(ii)

20 percent.

(B)

Not less than zero

Family's available assets under this subsection shall not be less than zero.

(2)

Asset protection allowance

The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478(d)):

Asset Protection Allowances for Families and Students
If the age of the student is—And the student is
marriedsingle
then the allowance is—
25 or less$0$0
26$300$100
27$700$200
28$1,000$300
29$1,300$500
30$1,600$600
31$2,000$700
32$2,300$800
33$2,600$900
34$2,900$1,000
35$3,300$1,100
36$3,600$1,200
37$3,900$1,400
38$4,200$1,500
39$4,600$1,600
40$4,900$1,700
41$5,100$1,700
42$5,200$1,700
43$5,300$1,800
44$5,400$1,800
45$5,500$1,900
46$5,700$1,900
47$5,800$1,900
48$6,000$2,000
49$6,100$2,000
50$6,300$2,100
51$6,400$2,100
52$6,600$2,200
53$6,800$2,200
54$6,900$2,300
55$7,100$2,300
56$7,300$2,400
57$7,500$2,500
58$7,700$2,500
59$7,900$2,600
60$8,200$2,700
61$8,400$2,700
62$8,600$2,800
63$8,900$2,900
64$9,200$2,900
65 or more$9,400$3,000.
(d)

Computations in case of separation, divorce, or death

In the case of a student who is divorced or separated, or whose spouse has died, the spouse's income and assets shall not be considered in determining the family's available income or assets.

.

(f)

Student aid index for independent students with dependents other than a spouse

Section 477 of the Higher Education Act of 1965 (20 U.S.C. 1087qq) is amended to read as follows:

477.

Student aid index for independent students with dependents other than a spouse

(a)

Computation of student aid index

For each independent student with dependents other than a spouse, the student aid index is equal to the amount determined by—

(1)

computing adjusted available income by adding—

(A)

the family's available income (determined in accordance with subsection (b)); and

(B)

the family's available assets (determined in accordance with subsection (c));

(2)

assessing such adjusted available income in accordance with an assessment schedule set forth in subsection (d); and

(3)

considering such assessment resulting under paragraph (2) as the amount determined under this subsection.

(b)

Family's available income

(1)

In general

The family's available income is determined by deducting from total income (as defined in section 480)—

(A)

Federal income taxes;

(B)

an allowance for payroll taxes, determined in accordance with paragraph (2);

(C)

an income protection allowance, determined in accordance with paragraph (3); and

(D)

an employment expense allowance, determined in accordance with paragraph (4).

(2)

Allowance for payroll taxes

The allowance for payroll taxes is equal to the sum of—

(A)

the amount earned by the student (and spouse, if appropriate), multiplied by the rate of tax under section 3101(b) of the Internal Revenue Code of 1986; and

(B)

the amount earned by the student (and spouse, if appropriate) that does not exceed such contribution and benefit base (twice such contribution and benefit base, in the case of a joint return) for the year of the earnings, multiplied by the rate of tax applicable to such earnings under section 3101(a) of such Code.

(3)

Income protection allowance

The income protection allowance for award year 2020–2021 and each succeeding award year shall equal the amount determined in the following table, as adjusted by the Secretary pursuant to section 478(b):

(A)

In the case of a married independent student with dependents:

Income Protection Allowance 2020–2021 (to be adjusted for 2021–2022 and succeeding years)
Family Size (including student)Amount
3$44,470
4$55,260
5$65,190
6$76,230
For each additional add$8,610.
(B)

In the case of a single independent student with dependents:

Income Protection Allowance 2020–2021 (to be adjusted for 2021–2022 and succeeding years)
Family Size (including student)Amount
2$43,128
3$54,364
4$66,312
5$78,228
6$91,476
For each additional add$10,332.
(4)

Employment expense allowance

The employment expense allowance is equal to the lesser of $4,000 or 35 percent of the student’s earned income or the combined earned income of the student and the student’s spouse (or is equal to a successor amount as adjusted by the Secretary under section 478(g)).

(c)

Family's available assets

(1)

In general

(A)

Determination

Except as provided in subparagraph (B), the family's available assets are equal to—

(i)

the difference between the family’s assets (as defined in 480(f)) and the asset protection allowance (determined in accordance with paragraph (2)); multiplied by

(ii)

7 percent.

(B)

Not less than zero

Family's available assets under this subsection shall not be less than zero.

(2)

Asset protection allowance

The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478(d)):

Asset Protection Allowances for Families and Students
If the age of the student is—And the student is
marriedsingle
then the allowance is—
25 or less$0$0
26$300$100
27$700$200
28$1,000$300
29$1,300$500
30$1,600$600
31$2,000$700
32$2,300$800
33$2,600$900
34$2,900$1,000
35$3,300$1,100
36$3,600$1,200
37$3,900$1,400
38$4,200$1,500
39$4,600$1,600
40$4,900$1,700
41$5,100$1,700
42$5,200$1,700
43$5,300$1,800
44$5,400$1,800
45$5,500$1,900
46$5,700$1,900
47$5,800$1,900
48$6,000$2,000
49$6,100$2,000
50$6,300$2,100
51$6,400$2,100
52$6,600$2,200
53$6,800$2,200
54$6,900$2,300
55$7,100$2,300
56$7,300$2,400
57$7,500$2,500
58$7,700$2,500
59$7,900$2,600
60$8,200$2,700
61$8,400$2,700
62$8,600$2,800
63$8,900$2,900
64$9,200$2,900
65 or more$9,400$3,000.
(d)

Assessment schedule

The assessment of adjusted available income (as determined under subsection (a)(1) and hereafter in this subsection referred to as AAI) is calculated according to the following table (or a successor table prescribed by the Secretary pursuant to section 478(e)):

Assessment From Adjusted Available Income
If AAI is—Then the assessment is—
Less than –$6,820–$1,500
–$6,820 to $17,00022% of AAI
$17,001 to $21,400$3,740 + 25% of AAI over $17,000
$21,401 to $25,700$4,840 + 29% of AAI over $21,400
$25,701 to $30,100$6,087 + 34% of AAI over $25,700
$30,101 to $34,500$7,583 + 40% of AAI over $30,100
$34,501 or more$9,343 + 47% of AAI over $34,500.
(e)

Computations in case of separation, divorce, or death

In the case of a student who is divorced or separated, or whose spouse has died, the spouse's income and assets shall not be considered in determining the family's available income or assets.

.

(g)

Regulations; updated tables

Section 478 of the Higher Education Act of 1965 (20 U.S.C. 1087rr) is amended to read as follows:

478.

Regulations; updated tables

(a)

Authority To prescribe regulations restricted

(1)

In general

Notwithstanding any other provision of law, the Secretary shall not have the authority to prescribe regulations to carry out this part except—

(A)

to prescribe updated tables in accordance with subsections (b) through (g); or

(B)

to propose modifications in the need analysis methodology required by this part.

(2)

Notification and approval

Any regulation proposed by the Secretary that updates tables in a manner that does not comply with subsections (b) through (g), or that proposes modifications under paragraph (1)(B), shall not be effective unless subject to notification and approval by the authorizing committees not less than 90 days before such regulation is published in the Federal Register in accordance with section 482.

(b)

Income protection allowance adjustments

For award year 2021–2022 and each succeeding award year, the Secretary shall publish in the Federal Register revised income protection allowances for the purposes of subsections (c)(3) and (g)(2)(C) of section 475, subclauses (I) and (II) of section 476(b)(1)(A)(iii), and section 477(b)(3), by increasing the income protection allowances in each of such provisions, by a percentage equal to the percentage increase in the Consumer Price Index, as defined in subsection (f), between April 2019 and the April prior to the beginning of the award year and rounding the result to the nearest $10.

(c)

Adjusted net worth of a farm or business

(1)

Table

The table of the net worth of a business or farm (hereafter in this subsection referred to as NW) for purposes of making determinations of assets as defined under section 480(f) for award year 2020–2021 is the following:

Business/Farm Net Worth Adjustment
If the net worth of a business or farm is—Then the adjusted net worth is—
Less than $1$0
$1 to $135,00040% of net worth of business/farm
$135,001 to $410,000$54,000 + 50% of net worth over $135,000
$410,001 to $680,000$191,500 + 60% of net worth over $410,000
$680,001 or more$353,500 + 100% of net worth over $680,000.
(2)

Revised tables

For each award year after award year 2020–2021, the Secretary shall publish in the Federal Register a revised table of adjusted net worth of a farm or business for purposes of section 480(f). Such revised table shall be developed—

(A)

by increasing each dollar amount that refers to net worth of a farm or business by a percentage equal to the percentage increase in the Consumer Price Index between April 2019 and the April prior to the beginning of such award year, and rounding the result to the nearest $5,000; and

(B)

by adjusting the dollar amounts in the column referring the adjusted net worth to reflect the changes made pursuant to subparagraph (A).

(d)

Education savings and asset protection allowance

For each award year after award year 2020–2021, the Secretary shall publish in the Federal Register a revised table of allowances for the purpose of sections 475(d)(2), 476(c)(2), and 477(c)(2). Such revised table shall be developed by determining the present value cost, rounded to the nearest $100, of an annuity that would provide, for each age cohort of 40 and above, a supplemental income at age 65 (adjusted for inflation) equal to the difference between the moderate family income (as most recently determined by the Bureau of Labor Statistics), and the current average social security retirement benefits. For each age cohort below 40, the allowance shall be computed by decreasing the allowance for age 40, as updated, by one-fifteenth for each year of age below age 40 and rounding the result to the nearest $100. In making such determinations—

(1)

inflation shall be presumed to be 6 percent per year;

(2)

the rate of return of an annuity shall be presumed to be 8 percent; and

(3)

the sales commission on an annuity shall be presumed to be 6 percent.

(e)

Assessment schedules and rates

For each award year after award year 2020–2021, the Secretary shall publish in the Federal Register a revised table of assessments from adjusted available income for the purpose of sections 475(e) and 477(d). Such revised table shall be developed—

(1)

by increasing each dollar amount that refers to adjusted available income by a percentage equal to the percentage increase in the Consumer Price Index between April 2019 and the April prior to the beginning of such academic year, rounded to the nearest $100; and

(2)

by adjusting the other dollar amounts to reflect the changes made pursuant to paragraph (1).

(f)

Consumer Price Index defined

In this section, the term Consumer Price Index means the Consumer Price Index for All Urban Consumers published by the Department of Labor. Each annual update of tables to reflect changes in the Consumer Price Index shall be corrected for misestimation of actual changes in such Index in previous years.

(g)

Employment expense allowance

For each award year after award year 2020–2021, the Secretary shall publish in the Federal Register a revised table of employment expense allowances for the purpose of sections 475(c)(4), 476(b)(3), and 477(b)(4). Such revised table shall be developed by increasing the dollar amount specified in sections 475(c)(4), 476(b)(3), and 477(b)(4) to reflect the inflationary adjustment that is used for the income protection allowances in subsection (b).

.

(h)

Applicants exempt from asset reporting

Section 479 of the Higher Education Act of 1965 (20 U.S.C. 1087ss) is amended to read as follows:

479.

Applicants exempt from asset reporting

(a)

In general

Notwithstanding any other provision of law, this section shall be effective for each individual seeking to apply for Federal financial aid under this title, as part of the simplified application for Federal student financial aid under section 483.

(b)

Applicants exempt from asset reporting

(1)

In general

Except as provided in paragraph (3), in carrying out section 483, the Secretary shall not use asset information from an eligible applicant or, as applicable, the parent or spouse of an eligible applicant.

(2)

Eligible applicants

In this subsection, the term eligible applicant means an applicant who meets at least one of the following criteria:

(A)

Is an applicant who qualifies for an automatic zero student aid index or automatic negative student aid index under subsection (b), (c), or (d) of section 473.

(B)

Is an applicant who is a dependent student and the student’s parents have a total adjusted gross income (excluding any income of the dependent student) that is less than $75,000 and do not file a Schedule A, B, D, E, F, or H (or equivalent successor schedules), with the Federal income tax return for the second preceding tax year, and—

(i)

do not file a Schedule C (or the equivalent successor schedule) with the Federal income tax return for the second preceding tax year; or

(ii)

file a Schedule C (or the equivalent successor schedule) with net business income of not more than a $10,000 loss or gain with the Federal income tax return for the second preceding tax year.

(C)

Is an applicant who is an independent student and the student (and including the student’s spouse, if any) has a total adjusted gross income that is less than $75,000 and does not file a Schedule A, B, C, D, E, F, or H (or equivalent successor schedules), with the Federal income tax return for the second preceding tax year, and—

(i)

does not file a Schedule C (or the equivalent successor schedule) with the Federal income tax return for the second preceding tax year; or

(ii)

files a Schedule C (or the equivalent successor schedule) with net business income of not more than a $10,000 loss or gain with the Federal income tax return for the second preceding tax year.

(3)

Special rule

An eligible applicant shall not be exempt from asset reporting under this section if the applicant is a dependent student and the students’ parents do not—

(A)

reside in the United States or a United States territory; or

(B)

file taxes in the United States or a United States territory, except if such nonfiling is due to not being required to file a Federal tax return for the applicable tax year due to a low income.

.

(i)

Discretion of student financial aid administrators

Section 479A of the Higher Education Act of 1965 (20 U.S.C. 1087tt) is amended to read as follows:

479A.

Discretion of student financial aid administrators

(a)

Authority of financial aid administrator

(1)

General authority

A financial aid administrator shall have the authority to, on the basis of documentation, make adjustments on a case-by-case basis to the cost of attendance or the values of the data used to calculate the student aid index or Federal Pell Grant award (or both) for an individual eligible applicant with special circumstances. In making adjustments described in this paragraph, a financial aid administrator may—

(A)

request and use supplementary information, as necessary, about the financial status or personal circumstances of eligible applicants as it relates to the special circumstances based on which the applicant is requesting an adjustment; or

(B)

offer a dependent student financial assistance under a Federal Direct Unsubsidized Stafford Loan without requiring the parents of such student to file the Free Application for Federal Student Aid if the student does not qualify for, or chooses not utilize, the unusual circumstance option specified in accordance with section 480(d)(1)(I), and the financial aid administrator determines that the parents of such student ended financial support of such student and refuse to file such form.

(2)

Limitation relating to authority of the financial aid administrator

In the absence of special circumstances as described in subparagraphs (A) and (B) of this paragraph, the authority under paragraph (1) shall not be construed to permit financial aid administrators to deviate from the cost of attendance, the values of the data used to calculate the student aid index or the values of the data used to calculate the Federal Pell Grant award (or both) for awarding aid under this title.

(A)

Special circumstances for adjustments related to pell grants

Special circumstances for adjustments to calculate a Federal Pell Grant award—

(i)

shall be conditions that differentiate an individual student from a class of students rather than conditions that exist across a class of students; and

(ii)

may include—

(I)

recent unemployment of a family member or an independent student;

(II)

a student or family member who is a dislocated worker (as defined in section 3 of the Workforce Innovation and Opportunity Act);

(III)

a change in housing status that results in an individual being a homeless child or youth (as defined in section 725 of the McKinney-Vento Homeless Assistance Act); or

(IV)

other changes or adjustments in the income, assets, or size of a family, or a student’s dependency status.

(B)

Special circumstances for adjustments related to cost of attendance and student aid index

Special circumstances for adjustments to the cost of attendance or the values of the data used to calculate the student aid index—

(i)

shall be conditions that differentiate an individual student from a class of students rather than conditions that exist across a class of students; and

(ii)

may include—

(I)

tuition expenses at an elementary school or secondary school;

(II)

medical, dental, or nursing home expenses not covered by insurance;

(III)

unusually high child care or dependent care costs;

(IV)

recent unemployment of a family member or an independent student;

(V)

a student or family member who is a dislocated worker (as defined in section 3 of the Workforce Innovation and Opportunity Act);

(VI)

the number of family members enrolled in a degree, certificate, or other program leading to a recognized educational credential at an institution with a program participation agreement under section 487;

(VII)

a change in housing status that results in an individual being a homeless child or youth (as defined in section 725 of the McKinney-Vento Homeless Assistance Act);

(VIII)

in the case of a dependent student, a recent condition of severe disability of the student, the dependent student’s parent or guardian, or an independent student’s dependent or spouse;

(IX)

unusual amount of claimed losses against income on the Federal tax return that substantially lower adjusted gross income, such as business, investment, or real estate losses; or

(X)

other changes or adjustments in the income, assets, or size of a family, or a student’s dependency status.

(3)

Use of authority

No institution of higher education or financial aid administrator shall maintain a policy of denying all requests for adjustments under this subsection.

(4)

Documentation and prohibition on fees

(A)

In general

Documentation for adjustments under paragraph (1) shall substantiate the special circumstances of individual students, and may include a documented interview between the student and the financial aid administrator.

(B)

No additional fee

No student or parent shall be charged a fee for a documented interview of the student by the financial aid administrator or for the review of a student or parent’s request for adjustments under this subsection including the review of any supplementary information or documentation of a student or parent’s special circumstance.

(C)

Disclosure

Each institution of higher education shall make publicly available information that students applying for aid under this title shall have the opportunity to pursue adjustments under this subsection, such as through an easily accessible notice on the institution’s website or direct disclosures to students.

(b)

Provisional independent students

(1)

Requirements for the secretary

The Secretary shall—

(A)

enable each student who, based on an unusual circumstance specified in accordance with section 480(d)(1)(I), may qualify for an adjustment under subsection (a) that will result in a determination of independence under this section and section 480(d)(1)(I) to complete the Free Application for Federal Student Aid as an independent student for the purpose of a provisional determination of the student’s Federal financial aid award, but subject to the authority under paragraph (2)(E), for the purpose of the final determination of the award;

(B)

upon completion of the Free Application for Federal Student Aid provide an estimate of the student’s Federal Pell Grant award, based on the assumption the student is determined to be an independent student; and

(C)

specify, on the Free Application for Federal Student Aid, the consequences under section 490(a) of knowingly and willfully completing the Free Application for Federal Student Aid as an independent student under subparagraph (A) without meeting the unusual circumstances to qualify for such a determination.

(2)

Requirements for financial aid administrators

With respect to a student accepted for admission who completes the Free Application for Federal Student Aid as an independent student under paragraph (1)(A), a financial aid administrator—

(A)

shall notify the student of the institutional process, requirements, and timeline for an adjustment under this section and section 480(d)(1)(I) that will result in a review of the student’s request for an adjustment and a determination of the student’s dependency status under such sections within a reasonable time after the student completes the Free Application for Federal Student Aid;

(B)

shall provide the student a final determination of the student’s dependency status and Federal financial aid award within a reasonable amount of time after all requested documentation is provided;

(C)

may consider as adequate verification that a student qualifies for an adjustment under this section and section 480(d)(1)(I)—

(i)

submission of a court order or official Federal or State documentation that the student’s parents or legal guardians are incarcerated in any Federal or State penal institution;

(ii)

a documented phone call or a written statement, which confirms the specific unusual circumstances with—

(I)

a child welfare agency authorized by a State or county;

(II)

a Tribal child welfare authority;

(III)

an independent living case worker; or

(IV)

a public or private agency, facility, or program serving the victims of abuse, neglect, assault, or violence;

(iii)

a documented phone call or a written statement from an attorney, a guardian ad litem, or a court appointed special advocate, which confirms the specific unusual circumstances and documents the person’s relationship to the student;

(iv)

a documented phone call or a written statement from a representative of a program under chapter 1 or 2 of subpart 2 of part A, which confirms the specific unusual circumstances and documents the person’s relationship to the student; or

(v)

in the absence of documentation described in this subparagraph, other documentation the financial aid administrator determines is adequate and appropriate to confirm the unusual circumstances;

(D)

shall retain all documents related to the adjustment under this section and section 480(d)(1)(I), including documented interviews, for at least the duration of the student’s enrollment, and shall abide by all other record keeping requirements of this Act; and

(E)

shall presume that any student who has obtained an adjustment under this section and section 480(d)(1)(I) and a final determination of independence for a preceding award year at an institution to be independent for a subsequent award year at the same institution unless—

(i)

the student informs the institution that circumstances have changed; or

(ii)

the institution has specific conflicting information about the student’s independence.

(c)

Adjustments to assets or income taken into account

A financial aid administrator shall be considered to be making a necessary adjustment in accordance with subsection (a) if—

(1)

the administrator makes adjustments excluding from family income or assets any proceeds or losses from a sale of farm or business assets of a family if such sale results from a voluntary or involuntary foreclosure, forfeiture, or bankruptcy or a voluntary or involuntary liquidation; or

(2)

the administrator makes adjustments for a student with a disability so as to take into consideration the additional costs such student incurs as a result of such student's disability.

(d)

Refusal or adjustment of loan certifications

On a case-by-case basis, an eligible institution may refuse to use the authority provided under this section, certify a statement that permits a student to receive a loan under part D, certify a loan amount, or make a loan that is less than the student's determination of need (as determined under this part), if the reason for the action is documented and provided in written form to the student. No eligible institution shall discriminate against any borrower or applicant in obtaining a loan on the basis of race, national origin, religion, sex, marital status, age, or disability status.

.

(j)

Disregard of student aid in other programs

Section 479B of the Higher Education Act of 1965 (20 U.S.C. 1087uu) is amended to read as follows:

479B.

Disregard of student aid in other programs

Notwithstanding any other provision of law, student financial assistance received under this title, or under Bureau of Indian Affairs student assistance programs, shall not be taken into account in determining the need or eligibility of any person for benefits or assistance, or the amount of such benefits or assistance, under any Federal, State, or local program financed in whole or in part with Federal funds.

.

(k)

Native American students

Section 479C of the Higher Education Act of 1965 (20 U.S.C. 1087uu–1) is amended to read as follows:

479C.

Native American students

In determining the student aid index for Native American students, computations performed pursuant to this part shall exclude—

(1)

any income and assets of $2,000 or less per individual payment received by the student (and spouse) and student’s parents under Public Law 98–64 (25 U.S.C. 117a et seq.; 97 Stat. 365) (commonly known as the Per Capita Act) or the Indian Tribal Judgment Funds Use or Distribution Act (25 U.S.C. 1401 et seq.); and

(2)

any income received by the student (and spouse) and student’s parents under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.) or the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721 et seq.).

.

(l)

Definitions

Section 480 of the Higher Education Act of 1965 (20 U.S.C. 1087vv) is amended to read as follows:

480.

Definitions

In this part:

(a)

Total income

The term total income means the amount equal to adjusted gross income for the second preceding tax year plus untaxed income and benefits for the second preceding tax year minus excludable income for the second preceding tax year. The factors used to determine total income shall be derived from the Federal income tax return, if available, except for the applicant’s ability to indicate a qualified rollover in the second preceding tax year as outlined in section 483.

(b)

Untaxed income and benefits

The term untaxed income and benefits means—

(1)

deductions and payments to self-employed SEP, SIMPLE, Keogh, and other qualified individual retirement accounts excluded from income for Federal tax purposes, except such term shall not include payments made to tax-deferred pension and retirement plans, paid directly or withheld from earnings, that are not delineated on the Federal tax return;

(2)

tax-exempt interest income;

(3)

untaxed portion of individual retirement account distributions;

(4)

untaxed portion of pensions; and

(5)

untaxed contributions to health savings accounts.

(c)

Veteran

The term veteran has the meaning given the term in section 101(2) of title 38, United States Code.

(d)

Independent students and determinations

(1)

Definition

The term independent, when used with respect to a student, means any individual who—

(A)

is 24 years of age or older by December 31 of the award year;

(B)

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 individual was 13 years of age or older;

(C)

is, or was immediately prior to attaining the age of majority, an emancipated minor or in legal guardianship as determined by a court of competent jurisdiction in the individual's State of legal residence;

(D)

is a veteran of the Armed Forces of the United States (as defined in subsection (c)) or is currently serving on active duty in the Armed Forces for other than training purposes;

(E)

is a graduate or professional student;

(F)

is married and not separated;

(G)

has legal dependents other than a spouse;

(H)

has been verified as either an unaccompanied youth 23 years of age or younger who is a homeless child or youth (as such term is defined in section 725 of the McKinney-Vento Homeless Assistance Act), or as unaccompanied, at risk of homelessness, and self-supporting, by—

(i)

by a local educational agency homeless liaison, designated pursuant to section 722(g)(1)(J)(ii) of the McKinney-Vento Homeless Assistance Act or a designee of the liaison;

(ii)

by the director of a recognized emergency shelter, transitional living, street outreach program, or other program serving individuals who are homeless or a designee of the director;

(iii)

by the director 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 or a designee of the director;

(iv)

by a financial aid administrator who verified the student’s circumstance in a prior award year; or

(v)

pursuant to paragraph (3); or

(I)

is a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances in which the student is unable to contact a parent or where contact with parents poses a risk to such student, which may include circumstances of—

(i)

human trafficking, as described in the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.);

(ii)

legally granted refugee or asylum status;

(iii)

parental abandonment; or

(iv)

parental imprisonment.

(2)

Simplifying the dependency override process

A financial aid administrator may make a determination of independence under paragraph (1)(I) based upon a documented determination of independence that was previously made by another financial aid administrator under such paragraph in the same award year.

(3)

Determination process for unaccompanied youth

A financial aid administrator shall make a case-by-case determination 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. A financial aid administrator may verify, in the absence of conflicting information, a status described in paragraph (1)(H). Such a determination shall be—

(A)

distinct from a determination of independence under paragraph (1)(I);

(B)

based on, and limited to, the definitions outlined in paragraph (1)(H);

(C)

based on a written statement from or a documented interview with the student which confirms the student’s status as an unaccompanied youth; and

(D)

made independent from the reasons for the student’s homelessness.

(4)

Verification process for foster care youth

If an institution requires documentation to verify that a student was in foster care when the student was age 13 or older, as described in paragraph (1)(B), a financial aid administrator shall consider any of the following as adequate verification, in the absence of documented conflicting information:

(A)

Submission of a court order or official State documentation that the student received Federal or State support in foster care.

(B)

A documented phone call, written statement, or verifiable electronic data match, which confirms the student was in foster care at an applicable age, from—

(i)

a State or tribal agency administering a program under part B or E of title IV of the Social Security Act (42 U.S.C. 621 et seq. and 670 et seq.);

(ii)

a State Medicaid agency; or

(iii)

a public or private foster care placing agency or foster care facility or placement.

(C)

A documented phone call or a written statement from an attorney, a guardian ad litem, or a Court Appointed Special Advocate that confirms that the student was in foster care at an applicable age, and documents the person’s relationship to the student.

(D)

Verification of the student’s eligibility for an education and training voucher under the John H. Chafee Foster Care Program under section 477 of the Social Security Act (42 U.S.C. 677).

(5)

Timing; use of earlier determination

(A)

Timing

A determination under subparagraph (B), (H), or (I) of paragraph (1) for a student—

(i)

shall be made as quickly as practicable;

(ii)

may be made as early as the year before the award year for which the student initially submits an application; and

(iii)

shall be made not later than during the award year for which the student initially submits an application.

(B)

Use of earlier determination

Any student who is determined to be independent under subparagraph (B), (H), or (I) of paragraph (1) for a preceding award year at an institution shall be presumed to be independent for each subsequent award year at the same institution unless—

(i)

the student informs the institution that circumstances have changed; or

(ii)

the institution has specific conflicting information about the student’s independence, and has informed the student of this information.

(6)

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.

(e)

Excludable income

The term excludable income means an amount equal to the education credits described in paragraphs (1) and (2) of section 25A(a) of the Internal Revenue Code of 1986.

(f)

Assets

(1)

In general

The term assets means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, derivatives, other securities, mutual funds, tax shelters, qualified education benefits (except as provided in paragraph (3)), the annual amount of child support received and the net value of real estate, income producing property, and business and farm assets, determined in accordance with section 478(c).

(2)

Exclusions

With respect to determinations of need under this title, the term assets shall not include the net value of the family’s principal place of residence.

(3)

Qualified education benefit

A qualified education benefit shall be considered an asset of—

(A)

the student if the student is an independent student; or

(B)

the parent if the student is a dependent student and the account is designated for the student, regardless of whether the owner of the account is the student or the parent.

(g)

Net assets

The term net assets means the current market value at the time of application of the assets (as defined in subsection (f)), minus the outstanding liabilities or indebtedness against the assets.

(h)

Treatment of income taxes paid to other jurisdictions

(1)

The tax on income paid to the Governments of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau under the laws applicable to those jurisdictions, or the comparable tax paid to the central government of a foreign country, shall be treated as Federal income taxes.

(2)

References in this part to title 26, Federal income tax forms, and the Internal Revenue Service shall, for purposes of the tax described in paragraph (1), be treated as references to the corresponding laws, tax forms, and tax collection agencies of those jurisdictions, respectively, subject to such adjustments as the Secretary may provide by regulation.

(i)

Current balance

The term current balance of checking and savings accounts does not include any funds over which an individual is barred from exercising discretion and control because of the actions of any State in declaring a bank emergency due to the insolvency of a private deposit insurance fund.

(j)

Other financial assistance

(1)

For purposes of determining a student's eligibility for funds under this title, other financial assistance not received under this title shall include all scholarships, grants, loans, or other assistance known to the institution at the time the determination of the student's need is made, including national service educational awards or post-service benefits under title I of the National and Community Service Act of 1990 (42 U.S.C. 12511 et seq.).

(2)

Notwithstanding paragraph (1), a tax credit taken under section 25A of the Internal Revenue Code of 1986, or a distribution that is not includable in gross income under section 529 of such Code, under another prepaid tuition plan offered by a State, or under a Coverdell education savings account under section 530 of such Code, shall not be treated as other financial assistance for purposes of section 471(a)(3).

(3)

Notwithstanding paragraph (1) and section 472, assistance not received under this title may be excluded from both other financial assistance and cost of attendance, if that assistance is provided by a State and is designated by such State to offset a specific component of the cost of attendance. If that assistance is excluded from either other financial assistance or cost of attendance, it shall be excluded from both.

(4)

Notwithstanding paragraph (1), payments made and services provided under part E of title IV of the Social Security Act 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, shall not be treated as other financial assistance for purposes of section 471(a)(3).

(k)

Dependents

(1)

Except as otherwise provided, the term dependent of the parent means the student, dependent children of the student's parents, including those children who are deemed to be dependent students when applying for aid under this title, and other persons who live with and receive more than one-half of their support from the parent and will continue to receive more than half of their support from the parent during the award year.

(2)

Except as otherwise provided, the term dependent of the student means the student's dependent children and other persons (except the student's spouse) who live with and receive more than one-half of their support from the student and will continue to receive more than half of their support from the student during the award year.

(l)

Family size

(1)

Dependent student

Except as provided in paragraph (3), in determining family size in the case of a dependent student—

(A)

if the parents are not divorced or separated, family members include the student’s parents, and any dependent (within the meaning of section 152 of the Internal Revenue Code of 1986 or was an eligible individual for purposes of the credit under section 32 of the Internal Revenue Code of 1986) of the student’s parents for the taxable year used in determining the amount of need of the student for financial assistance under this title;

(B)

if the parents are divorced or separated, family members include the parent whose income is included in computing available income and any dependent (within the meaning of section 152 of the Internal Revenue Code of 1986 or was an eligible individual for purposes of the credit under section 32 of the Internal Revenue Code of 1986) of that parent for the taxable year used in determining the amount of need of the student for financial assistance under this title;

(C)

if the parents are divorced and the parents whose income is so included is remarried, or if the parent was a widow or widower who has remarried, family members also include, in addition to those individuals referred to in paragraph (B), and any dependent (within the meaning of section 152 of the Internal Revenue Code of 1986 or was an eligible individual for purposes of the credit under section 32 of the Internal Revenue Code of 1986) of the new spouse for the taxable year used in determining the amount of need of the student for financial assistance under this title, if that spouse’s income is included in determining the parent’s adjusted available income; and

(D)

if the student is not considered as a dependent (within the meaning of section 152 of the Internal Revenue Code of 1986 or was an eligible individual for purposes of the credit under section 32 of the Internal Revenue Code of 1986) of any parent, the parents’ family size shall include the student and the family members applicable to the parents’ situation under subparagraph (A), (B), or (C).

(2)

Independent student

Except as provided in paragraph (3), in determining family size in the case of an independent student—

(A)

family members include the student, the student’s spouse, and any dependent (within the meaning of section 152 of the Internal Revenue Code of 1986 or was an eligible individual for purposes of the credit under section 32 of the Internal Revenue Code of 1986) of that student for the taxable year used in determining the amount of need of the student for financial assistance under this title; and

(B)

if the student is divorced or separated, family members do not include the spouse (or ex-spouse), but do include the student and any dependent (within the meaning of section 152 of the Internal Revenue Code of 1986 or was an eligible individual for purposes of the credit under section 32 of the Internal Revenue Code of 1986) of that student for the taxable year used in determining the amount of need of the student for financial assistance under this title.

(3)

Procedures and modification

The Secretary shall provide procedures for determining family size in cases in which information for the taxable year used in determining the amount of need of the student for financial assistance under this title has changed or does not accurately reflect the applicant’s current household size.

(m)

Business assets

The term business assets means property that is used in the operation of a trade or business, including real estate, inventories, buildings, machinery, and other equipment, patents, franchise rights, and copyrights.

.

(m)

FAFSA

Section 483 of the Higher Education Act of 1965 (20 U.S.C. 1090) is amended to read as follows:

483.

Free application for Federal student aid

(a)

Simplified application for federal student financial aid

(1)

In general

Each individual seeking to apply for Federal financial aid under this title for any award year shall file a free application with the Secretary, known as the Free Application for Federal Student Aid, to determine eligibility for such aid, as described in paragraph (2), and in accordance with section 479.

(2)

Free application

(A)

In general

The Secretary shall make available, for the purposes of paragraph (1), a free application to determine the eligibility of a student for Federal financial aid under this title.

(B)

Information required by the applicant

(i)

In general

The applicant, and, if necessary, the parents or spouse of the applicant, shall provide the Secretary with the applicable information described in clause (ii) in order to be eligible for Federal financial aid under this title.

(ii)

Information to be provided

The information described in this clause is the following:

(I)

Name.

(II)

Contact information, including address, phone number, email address, or other electronic address.

(III)

Social security number.

(IV)

Date of birth.

(V)

Marital status.

(VI)

Citizenship status, including alien registration number, if applicable.

(VII)

Gender.

(VIII)

State of legal residence and date of residency.

(IX)

Name and location of the high school from which the applicant received, or will receive prior to the period of enrollment for which aid is sought, a regular high school diploma, name and location of the entity from which the applicant received, or will receive prior to the period of enrollment for which aid is sought, a recognized equivalent of a regular high school diploma, or if the applicant completed or will complete prior to the period of enrollment for which aid is sought, a secondary school education in a home school setting that is treated as a home school or private school under State law.

(X)

Name of each institution where the applicant intends to apply for enrollment or continue enrollment.

(XI)

Year in school for period of enrollment for which aid is sought, including whether applicant will have finished first bachelor’s degree prior to the period of enrollment for which aid is sought.

(XII)

Whether one or both of an applicant’s parents attended college.

(XIII)

Any required asset information, unless exempt under section 479, in which the applicant shall indicate—

(aa)

the annual amount of child support received, if applicable; and

(bb)

all required asset information not described in item (aa).

(XIV)

The number of members of the applicant’s family who will also be enrolled in an eligible institution of higher education on at least a half-time basis during the same enrollment period as the applicant.

(XV)

If the applicant meets any of the following designations:

(aa)

Homeless, at risk of being homeless, or an unaccompanied youth.

(bb)

Emancipated minor.

(cc)

In legal guardianship.

(dd)

Dependent ward of the court at any time since the applicant turned 13.

(ee)

In foster care at any time since the applicant turned 13.

(ff)

If both parents have died since the applicant turned 13.

(gg)

Is a veteran of the Armed Forces of the United States or is serving (on the date of the application) on active duty in the Armed Forces for other than training purposes.

(hh)

Has a dependent child or relative and is under the age of 24.

(ii)

Does not have access to parental income due to an unusual circumstance.

(XVI)

If the applicant receives or has received any of the following means-tested Federal benefits within the last two years:

(aa)

The supplemental security income program under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.).

(bb)

The supplemental nutrition assistance program under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).

(cc)

The free and reduced price school lunch program established under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.).

(dd)

The program of block grants for States for temporary assistance for needy families established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.).

(ee)

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).

(ff)

The Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

(gg)

Federal housing assistance programs, including tenant-based assistance under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)), and public housing, as defined in section 3(b)(1) of such Act (42 U.S.C. 1437a(b)(1)).

(hh)

Any other means-tested program determined by the Secretary to be appropriate.

(XVII)

If the applicant, or, if necessary, the parents or spouse of the applicant, reported receiving tax exempt payments from an IRA distribution or from pensions or annuities on a Federal tax return the Secretary shall request the applicant, or, if necessary, the parents or spouse of the applicant to provide information as to how much of the IRA distribution or the pension or annuity disbursement was a qualified rollover and the applicant, or, if necessary, the parents or spouse of the applicant shall provide such information to the Secretary for the purpose of the need analysis.

(iii)

Prohibition against requesting information more than once

Any information requested during the process of creating an account for completing the web-based free application under this subsection, shall not be required a second time for the same award year, or in a duplicative manner, when completing such web-based free application.

(iv)

Change in family size

The Secretary shall provide a process by which an applicant shall confirm the accuracy of family size or update the family size with respect to such applicant for purposes of determining the need of such applicant for financial assistance under this title based on a change in family size from the tax year data used for such determination.

(v)

Single question for homeless status

The Secretary shall ensure that—

(I)

on the form developed under this section for which the information is applicable, there is a single, easily understood screening question to identify an applicant 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; and

(II)

such question is distinct from those relating to an individual who does not have access to parental income due to an unusual circumstance.

(vi)

Adjustments

The Secretary shall disclose on the FAFSA that the student may, on a case-by-case basis, qualify for an adjustment under section 479A to the cost of attendance or the values of the data items required to calculate the student aid index for the student or parent.

(C)

Notification of request for tax return information

The Secretary shall advise students and borrowers who submit an application for Federal student financial aid under this title (as well as parents and spouses who sign such an application or request or a Master Promissory Note on behalf of those students and borrowers) of the authority of the Secretary to request that the Internal Revenue Service disclose their tax return information as described in section 494.

(D)

Authorizations available to the applicant

(i)

Authorization to release and transmit to institution

An applicant and, if necessary, the parents or spouse of the applicant shall provide the Secretary with authorization to release and transmit to an institution, as specified by the applicant, in order for the applicant’s eligibility for Federal financial aid programs to be determined, the following:

(I)

Information described under section 6103(l)(13) of the Internal Revenue Code of 1986.

(II)

All information provided by the applicant on the application described by this subsection to determine the applicant’s eligibility for Federal financial aid under this title and for the application, award, and administration of such Federal financial aid.

(ii)

Authorization to release and transmit to State and institution

(I)

In general

An applicant and, if necessary, the parents or spouse of the applicant may provide the Secretary with authorization to release and transmit to the State of residence of the applicant and to any institution specified by the applicant, in order for the applicant’s eligibility for State student financial aid programs or institution-based student financial aid programs to be determined, the following:

(aa)

Information described under section 6103(l)(13) of the Internal Revenue Code of 1986.

(bb)

All information provided by the applicant on the application described by this subsection for the application, award, and administration of financial aid by a State or an institution of higher education.

(II)

Special rule

An institution to which an applicant selects to release and transmit information under subclause (I) shall not be disclosed to any other institution.

(iii)

Authorization to release and transmit to benefits programs

An applicant and, if necessary, the parents or spouse of the applicant may provide the Secretary with authorization to release and transmit to means-tested Federal benefit programs, as defined in section 473(e), the following:

(I)

Information described under section 6103(l)(13) of the Internal Revenue Code of 1986.

(II)

All information provided by the applicant on the application described by this subsection to determine the applicant’s eligibility for the application, award, and administration of such means-tested Federal benefits programs.

(E)

Action by the secretary

Upon receiving—

(i)

an application under this section, the Secretary shall, as soon as practicable, perform the necessary functions with the Commissioner of Internal Revenue to calculate the applicant’s student aid index and scheduled award for a Federal Pell Grant, if applicable, assuming full-time enrollment for an academic year, and note to the applicant the assumptions relationship to the scheduled award; and

(ii)

an authorization under subparagraph (D), the Secretary shall, as soon as practicable, release and transmit the information described under such subparagraph to the State of residence of the applicant or an institution, as specified by the applicant, in order for the applicant’s eligibility for Federal, State, or institutional student financial aid programs to be estimated or determined.

(3)

Information to be supplied by the secretary of education

(A)

In general

Upon receiving and timely processing a free application that contains the information described in paragraph (2), the Secretary shall provide to the applicant (and the parents of a dependent student applicant, or spouse of the independent student applicant, if applicable) the following information based on full-time attendance for an academic year:

(i)

The estimated dollar amount of a Federal Pell Grant scheduled award for which the applicant is eligible for such award year.

(ii)

Information on other types of Federal financial aid for which the applicant may be eligible (including situations in which the applicant could qualify for 150 percent of a schedule Federal Pell Grant award and loans made under this title) and how the applicant can find additional information regarding such aid.

(iii)

Information regarding each institution selected by the applicant in accordance with paragraph (2)(B)(ii)(X), including the following:

(I)

The following information, as collected through the Integrated Postsecondary Education Data System or a successor Federal data system as designated by the Secretary:

(aa)

Net price by income quintile.

(bb)

Median debt of students upon completion.

(cc)

Graduation rate.

(dd)

Retention rate.

(ee)

Transfer rate, if available.

(II)

Institutional default rate, as calculated under section 435.

(iv)

If the student is eligible for a student aid index of less than or equal to zero under section 473 but has not indicated that they receive Federal means-tested benefits, a notification of the Federal means-tested benefits for which they may be eligible.

(v)

Information on education tax credits described in paragraphs (1) and (2) of section 25A(a) of the Internal Revenue Code of 1986.

(vi)

If the individual identified as a veteran, or as serving (on the date of the application) on active duty in the Armed Forces for other than training purposes, information on benefits administered by the Department of Veteran Affairs or Department of Defense, respectively.

(vii)

If applicable, the applicant’s current outstanding balance of loans under this title.

(B)

Information provided to the state

(i)

In general

The Secretary shall provide, with authorization from the applicant in accordance with paragraph (2)(D)(ii), to a State agency administering State-based financial aid and serving the applicant’s State of residence, the information described under section 6103(l)(13) of the Internal Revenue Code of 1986 and information described in paragraph (2)(B) for the application, award, and administration of grants and other aid provided directly from the State to be determined by such State, such information shall include the list of institutions provided by the applicant on the application.

(ii)

Use of information

A State agency administering State-based financial aid—

(I)

shall use the information provided under clause (i) solely for the application, award, and administration of State-based financial aid for which the applicant is eligible and for State agency research that does not release any individually identifiable information on any applicant to promote college attendance, persistence, and completion;

(II)

may use identifying information for student applicants to determine whether or not a graduating secondary student has filed the application in coordination with local educational agencies or secondary schools to encourage students to complete the application; and

(III)

shall be prohibited from sharing application information with any other entity without the explicit written consent of the applicant, except as provided in subclause (II).

(iii)

Limitation on consent process

A State may provide a consent process whereby an applicant may elect to share the information described in clause (i) through explicit written consent to Federal, State, or local government agencies or tribal organizations to assist such applicant in applying for and receiving Federal, State, or local government assistance, or tribal assistance for any component of the applicant's cost of attendance which may include financial assistance or non-monetary assistance.

(iv)

Prohibition

Any entity that receives applicant information under clause (iii) shall not sell, share, or otherwise use applicant information other than for the purposes outlined in clause (iii).

(C)

Information provided to the institution

(i)

In general

The Secretary shall provide, with authorization from the applicant in accordance with paragraph (2)(D)(ii), to each institution selected by the applicant on the application, the information described under section 6103(l)(13) of the Internal Revenue Code of 1986 and information described in paragraph (2)(B) for the application, award, and administration of grants and other aid provided directly from the institution to be determined by such institution and grants and other aid provided directly from the State or Federal Government.

(ii)

Use of information

An institution—

(I)

shall use the information provided to it under clause (i) solely for the application, award, and administration of financial aid to the applicant, and for institutional research that does not release any individually identifiable information on any applicant, to promote college attendance, persistence and completion; and

(II)

be prohibited from sharing such information with any other entity without the explicit written consent of the applicant.

(iii)

Limitation on consent process

An institution may provide a consent process whereby an applicant can elect to share the information described in clause (i) with explicit written consent to a scholarship granting organization, including a tribal organization (defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304)), or to Federal, State, or local government agencies or tribal organizations to assist the applicant in applying for and receiving private assistance, or Federal, State, local government assistance, or tribal assistance for any component of the applicant's cost of attendance which may include financial assistance or non-monetary assistance.

(iv)

Prohibition

Any entity that receives applicant information under clause (iii) shall not sell, share, or otherwise use applicant information other than for the purposes outlined in clause (iii).

(4)

Development of form and information exchange

Prior to the design of the free application under this subsection, the Secretary shall, to the maximum extent practicable, on an annual basis—

(A)

consult with stakeholders to gather information about innovations and technology available to—

(i)

ensure an efficient and effective process;

(ii)

mitigate unintended consequences; and

(iii)

determine the best practices for outreach to students and families during the transition to the streamlined process for the determination of Federal financial aid and Federal Pell Grant eligibility while reducing the data burden on applicants and families; and

(B)

solicit public comments for the format of the free application that provides for adequate time to incorporate feedback prior to development of the application for the succeeding award year.

(5)

No additional information requests permitted

In carrying out this subsection, the Secretary may not require additional information to be submitted by an applicant (or the parents or spouse of an applicant) for Federal financial aid through other requirements or reporting.

(6)

State-run programs

(A)

In general

The Secretary shall conduct outreach to States in order to research the benefits to students of States relying solely on the financial data made available, upon authorization by the applicant, as a result of an application for aid under this subsection for determining the eligibility of the applicant for State provided financial aid.

(B)

Secretarial review

If a State determines that there is a need for additional data elements beyond those provided pursuant to this subsection for determining the eligibility of an applicant for State provided financial aid, the State shall forward a list of those additional data elements determined necessary, but not provided by virtue of the application under this subsection, to the Secretary. The Secretary shall make readily available to the public through its websites and other means—

(i)

a list of States that do not require additional financial information separate from the Free Application for Federal Student Aid and do not require asset information from students who qualify for the exemption from asset reporting under section 479 for the purposes of awarding State scholarships and grant aid;

(ii)

a list of States that require asset information from students who qualify for the exemption from asset reporting under section 479 for the purposes of awarding State scholarships and grant aid;

(iii)

a list of States that have indicated that they require additional financial information separate from the Free Application for Federal Student Aid for purposes of awarding State scholarships and grant aid; and

(iv)

with the publication of the lists under this subparagraph, information about additional resources available to applicants, including links to such State websites.

(C)

Studies

The Secretary shall conduct studies on the effect of States requiring additional information specified in clauses (ii) and (iii) of subparagraph (B) on the determination of State financial aid awards and whether the additional information required is a barrier to college enrollment by examining—

(i)

how much financial aid awards would change if the additional information were not required;

(ii)

the number of students who started but did not finish the Free Application for Federal Student Aid, compared to the baseline year of 2021; and

(iii)

the number of students who—

(I)

started a Free Application for Federal Student Aid but did not receive financial assistance under this title for the applicable academic year; and

(II)

if available, did not enroll in an institution of higher education in the applicable academic year.

(7)

Institution-run financial aid

(A)

In general

The Secretary shall conduct outreach to institutions of higher education to describe the benefits to students of relying solely on the financial data made available, upon authorization for release by the applicant, as a result of an application for aid under this subsection for determining the eligibility of the applicant for institutional financial aid. The Secretary shall make readily available to the public through its websites and other means—

(i)

a list of institutions that do not require additional financial information separate from the Free Application for Federal Student Aid and do not require asset information from students who qualify for the exemption from asset reporting under section 479 for the purpose of awarding institution-run financial aid;

(ii)

a list of institutions that require asset information from students who qualify for the exemption from asset reporting under section 479 for the purpose of awarding institution-run financial aid;

(iii)

a list of institutions that require additional financial information separate from the Free Application for Federal Student Aid for the purpose of awarding institution-run financial aid; and

(iv)

with the publication of the list in clause (iii), information about additional resources available to applicants.

(8)

Security of data

The Secretary shall, in consultation with the Secretary of the Treasury, take all steps necessary to—

(A)

safeguard the data required to be transmitted for the purpose of this section between Federal agencies and to States and institutions of higher education;

(B)

secure the transmittal of such data; and

(C)

provide guidance to States and institutions of higher education regarding their obligation to ensure the security of the data provided under this section.

(9)

Report to congress

(A)

In general

Not later than one year after the date of enactment of the FAFSA Simplification Act of 2019, the Secretary shall report to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and Labor of the House of Representatives on the progress of the Secretary in carrying out this subsection, including planning and stakeholder consultation. Such report shall include—

(i)

benchmarks for implementation;

(ii)

entities and organization to which the Secretary reached out for consultation;

(iii)

system requirements for such implementation and how they will be addressed;

(iv)

any areas of concern and potential problem issues uncovered that may hamper such implementation; and

(v)

solutions determined to address such issues.

(B)

Quarterly updates

The Secretary shall provide updates to the Committees described in subparagraph (A)—

(i)

as to the progress and planning described in subparagraph (A) prior to implementation of the Free Application for Federal Student Aid under this subsection not less often than quarterly; and

(ii)

at least 6 months and 1 year post implementation of the Free Application for Federal Student Aid.

(b)

Adjustments and improvements

(1)

In general

The Secretary shall disclose in a consumer-tested format, upon completion of the Free Application for Federal Student Aid under this section, that the student may, on a case-by-case basis, qualify for an adjustment under section 479A to the cost of attendance or the values of the data items required to calculate the Federal Pell Grant or the need analysis for the student or parent. Such disclosure shall specify—

(A)

examples of the special circumstances under which a student or family member may qualify for such adjustment or determination of independence; and

(B)

additional information regarding the steps a student or family member may take in order to seek an adjustment under section 479A.

(2)

Consumer testing

(A)

In general

The development of the Free Application for Federal Student Aid under this section shall be consumer tested with prospective first-generation college students and families as well as low-income individuals and families.

(B)

Updates

For award year 2021 and each fourth succeeding award year thereafter, the design of the Free Application for Federal Student Aid shall be updated based on additional consumer testing with the populations described in subparagraph (A) in order to improve communication.

(3)

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 Free Application for Federal Student Aid form in each of those languages.

(4)

Reapplication in a succeeding academic year

In order to streamline applicant’s experience applying for financial aid, the Secretary shall allow an applicant who electronically applies for financial assistance under this title for an academic year subsequent to an academic year for which such applicant applied for financial assistance under this title to automatically electronically import all of the applicant’s (including parents, guardians, or spouses, as applicable) identifying, demographic, and school data from the previous application and to update such information to reflect any circumstances that have changed.

(5)

Technology accessibility

The Secretary shall make the application under this section available through the prevalent technology. Such technology shall, at a minimum, enable applicants to—

(A)

save data; and

(B)

submit the application under this title to the Secretary through such technology.

(6)

Verification burden

The Secretary shall—

(A)

to the maximum extent practicable, streamline and simplify the process of verification for applicants for Federal financial aid;

(B)

in establishing policies and procedures to verify applicants’ eligibility for Federal financial aid, consider—

(i)

the burden placed on low-income applicants;

(ii)

the risk to low-income applicants of failing to enroll or complete from being selected for verification;

(iii)

the effectiveness of the policies and procedures in safeguarding against a net cost to taxpayers; and

(iv)

the reasons for the source of any improper payments; and

(C)

issue a report not less often than annually sharing the percentage of applicants subject to verification, whether the applicants ultimately received Federal financial aid disbursements, and whether the student aid index changed enough to affect the applicant’s award of any Federal financial aid under this title.

(c)

Data and information

(1)

In general

The Secretary shall publish data in a publicly accessible manner—

(A)

annually on the total number of Free Applications for Federal Student Aid submitted by application cycle, disaggregated by demographic characteristics, type of institution or institutions of higher education to which the applicant applied, the applicant’s State of legal residence, and high school and public school district;

(B)

quarterly on the total number of Free Applications for Federal Student Aid submitted by application cycle, disaggregated by type of institution or institutions of higher education to which the applicant applied, the applicant’s State of legal residence, and high school and public school district;

(C)

weekly on the total number of Free Applications for Federal Student Aid submitted, disaggregated by high school and public school district; and

(D)

annually on the number of individuals who apply for Federal financial aid pursuant to this section who indicated they are a homeless child or youth (as defined in section 725 of the McKinney-Vento Homeless Assistance Act), an unaccompanied youth, or a foster care youth.

(2)

Contents

The data described in paragraph (1) with respect to homeless children and youth shall include, at a minimum, for each application cycle—

(A)

the total number of all applicants who were determined to be individuals described in section 480(d)(1)(H); and

(B)

the number of applicants described in subparagraph (A), disaggregated—

(i)

by State; and

(ii)

by the sources of determination as described in clauses (i) through (iv) of section 480(d)(1)(H).

(3)

Data sharing

The Secretary may enter into data sharing agreements with the appropriate Federal or State agencies to conduct outreach regarding, and connect applicants directly with, the means-tested Federal benefit programs described in subsection (a)(2)(B)(ii)(XVI) for which the applicants may be eligible.

(d)

Ensuring form usability

(1)

Signature

Notwithstanding any other provision of this title, the Secretary may permit the Free Application for Federal Student Aid to be submitted without a signature, if a signature is subsequently submitted by the applicant, or if the applicant uses an access device provided by the Secretary.

(2)

Free preparation authorized

Notwithstanding any provision of this title, an applicant may use a preparer for consultative or preparation services for the completion of the Free Application for Federal Student Aid without charging a fee to the applicant if the preparer—

(A)

includes, at the time the application is submitted to the Department, the name, address or employer's address, social security number or employer identification number, and organizational affiliation of the preparer on the applicant's form;

(B)

is subject to the same penalties as an applicant for purposely giving false or misleading information in the application;

(C)

clearly informs each individual upon initial contact, that the Free Application for Federal Student Aid is a free form that may be completed without professional assistance; and

(D)

does not produce, use, or disseminate any other form for the purpose of applying for Federal financial aid other than the Free Application for Federal Student Aid form developed by the Secretary under this section.

(3)

Charges to students and parents for use of forms prohibited

The need and eligibility of a student for financial assistance under this title may be determined only by using the Free Application for Federal Student Aid developed by the Secretary under this section. Such application shall be produced, distributed, and processed by the Secretary, and no parent or student shall be charged a fee by the Secretary, a contractor, a third-party servicer or private software provider, or any other public or private entity for the collection, processing, or delivery of Federal financial aid through the use of such application. No data collected on a form for which a fee is charged shall be used to complete the Free Application for Federal Student Aid prescribed under this section, except that a Federal or State income tax form prepared by a paid income tax preparer or preparer service for the primary purpose of filing a Federal or State income tax return may be used to complete the Free Application for Federal Student Aid prescribed under this section.

(4)

Application processing cycle

The Secretary shall enable students to submit a Free Application for Federal Student Aid developed under this section and initiate the processing of such application, not later than January 1 of the student's planned year of enrollment, to the maximum extent practicable, on or around October 1 prior to the student's planned year of enrollment.

(5)

Early estimates

The Secretary shall maintain an electronic method for applicants to enter income and family size information to calculate a non-binding estimate of the applicant's Federal financial aid available under this title and shall place such calculator on a prominent location at the beginning of the Free Application for Federal Student Aid.

.

(n)

Student eligibility

Section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091) is amended—

(1)

by striking subsection (q) and inserting the following:

(q)

Use of income data with IRS

The Secretary, in cooperation with the Secretary of the Treasury, shall fulfill the data transfer requirements under section 6103(l)(13) of the Internal Revenue Code of 1986.

;

(2)

by striking subsection (r);

(3)

by redesignating subsections (s) and (t) as subsections (r) and (s), respectively; and

(4)

by adding at the end the following:

(t)

Exception to required registration with the selective service system

Notwithstanding section 12(f) of the Military Selective Service Act (50 U.S.C. 3811(f)), an individual shall not be ineligible for assistance or a benefit provided under this title if the individual is required under section 3 of such Act (50 U.S.C. 3802) to present himself for and submit to registration under such section and fails to do so in accordance with any proclamation issued under such section, or in accordance with any rule or regulation issued under such section.

.

(o)

Institutional and financial assistance information for students

Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is amended by striking subsection (k).

(p)

Early awareness of financial aid eligibility

Section 485E of the Higher Education Act of 1965 (20 U.S.C. 1092f) is amended to read as follows:

485E.

Early awareness of financial aid eligibility

(a)

In general

The Secretary shall implement early outreach activities in order to provide prospective students and families with early information about financial aid and estimates of such prospective students’ eligibility for financial aid. Such early outreach activities shall include the activities described in subsections (b), (c), and (d).

(b)

Pell grant early awareness

(1)

In general

The Secretary shall produce a consumer-tested method of estimating student eligibility for Federal Pell Grants outlined in section 401(b) utilizing the variables of family size and adjusted gross income, and presented in electronic format. There shall be a method for students to indicate whether they are, or will be in—

(A)

a single-parent household;

(B)

a household with two parents; or

(C)

a household with no children or dependents.

(2)

Consumer testing

(A)

In general

The method of estimating eligibility described in paragraph (1) shall be consumer tested with prospective first-generation students and families as well as low-income individuals and families.

(B)

Updates

For award year 2022–2023 and each fourth succeeding award year thereafter, the design of the method of estimating eligibility shall be updated based on additional consumer testing with the populations described in subparagraph (A).

(3)

Distribution

The method of estimating eligibility described in paragraph (1) shall be—

(A)

made publicly and prominently available on the Department of Education website; and

(B)

actively shared by the Secretary with—

(i)

institutions of higher education participating in programs under this title;

(ii)

all middle and secondary schools eligible for funds under part A of title I of the Elementary and Secondary Education Act of 1965; and

(iii)

local educational agencies and middle schools and secondary schools that serve students not less than 25 percent of whom meet a measure of poverty as described in section 1113(a)(5) of the Elementary and Secondary Education Act of 1965.

(4)

Electronic estimator

In accordance with subsection (d)(5) of section 483, the Secretary shall maintain an electronic method for applicants to enter income and family size information to calculate a non-binding estimate of the applicant's Federal financial aid available under this title and shall place such calculator on a prominent location on the FAFSA website.

(c)

Early awareness plans

The Secretary shall establish and implement early awareness plans to provide early information about the availability of Federal financial aid and estimates of prospective students’ eligibility for Federal financial aid as well as to promote the attainment of postsecondary education specifically among prospective first-generation students and families as well as low-income individuals and families, as follows:

(1)

Awareness plans for low-income children

(A)

In general

The Secretary shall develop plans to disseminate information about the availability of Federal financial aid under this title, in addition to and in coordination with the distribution of the method of estimating eligibility under subsection (b), to—

(i)

all middle schools and secondary schools eligible for funds under part A of title I of the Elementary and Secondary Education Act of 1965;

(ii)

local educational agencies and middle schools and high schools that serve students not less than 25 percent of whom meet a measure of poverty as described in section 1113(a)(5) of the Elementary and Secondary Education Act; and

(iii)

households receiving assistance under the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).

(B)

Reporting and updates

The Secretary shall post the information about the plans under subparagraph (A) and associated goals publicly on the Department of Education website. On an annual basis, the Secretary shall report qualitative and quantitative outcomes regarding the implementation of the plans under subparagraph (A). The Secretary shall review and update such plans not less often than every 4 award years with the goal of progressively increasing the impact of the activities under this paragraph.

(C)

Partnership

The Secretary may partner with States, State systems of higher education, institutions of higher education, or college access organizations to carry out this paragraph.

(2)

Interagency coordination plans

(A)

In general

The Secretary shall develop interagency coordination plans in order to inform more prospective students and families, including low-income individuals or families, about the availability of Federal financial aid under this title through participation in existing Federal programs or tax benefits that serve low-income individuals or families, in coordination with the following Secretaries:

(i)

The Secretary of the Treasury.

(ii)

The Secretary of Labor.

(iii)

The Secretary of Health and Human Services.

(iv)

The Secretary of Agriculture.

(v)

The Secretary of Housing and Urban Development.

(vi)

The Secretary of Commerce.

(vii)

The Secretary of Veterans Affairs.

(B)

Process, activities, and goals

Each interagency coordination plan under subparagraph (A) shall—

(i)

establish a process to identify opportunities in which low-income individuals and families could be informed of the availability of Federal financial aid under this title through access to other Federal programs that serve low-income individuals and families;

(ii)

establish a process to identify methods to effectively inform low-income individuals and families of the availability of Federal financial aid for postsecondary education under this title;

(iii)

develop early awareness activities that align with the opportunities and methods identified under clauses (ii) and (iii); and

(iv)

establish goals regarding the effects of the activities to be implemented under clause (iii).

(C)

Reporting and updates

The Secretary shall post the information about the interagency coordination plans under subparagraph (B) and associated goals publicly on the Department of Education website. On not less often than a quadrennial basis, the Secretary shall publicly report qualitative and quantitative outcomes regarding the implementation of the plans on the Department of Education website. The Secretary shall review and update the plans not less often than upon each change in Secretarial leadership with an agency that is party to a plan. Updates to the plans shall have the goal of progressively increasing the impact of the activities under this paragraph by increasing the number of low-income applicants for, and recipients of, Federal financial aid.

(3)

Nationwide participation in early awareness plans

(A)

In general

The Secretary shall solicit voluntary public commitments from entities, such as States, State systems of higher education, institutions of higher education, and other interested organizations, to carry out early awareness plans, which shall include goals, to—

(i)

notify prospective and existing students who are low-income individuals and families about their eligibility for Federal aid under this title, as well as State-based financial aid, if applicable, on an annual basis;

(ii)

increase the number of prospective and current students who are low-income individuals and families filing the Free Application for Federal Student Aid; and

(iii)

increase the number of prospective and current students who are low-income individuals and families enrolling in postsecondary education.

(B)

Reporting and updates

Each entity that makes a voluntary public commitment to carry out an early awareness plan may submit quantitative and qualitative data based on the entity’s progress toward the goals of the plan annually prior to a date selected by the Secretary.

(C)

Early awareness champions

Based on data submitted by entities, the Secretary shall select and designate entities submitting public commitments, plans, and goals, as Early Awareness Champions on an annual basis. Those entities designated as Early Awareness Champions shall provide one or more case studies regarding the activities the entity undertook under this paragraph which shall be made public by the Secretary on the Department of Education website to promote the spread of best practices.

(d)

Public awareness campaign

(1)

In general

The Secretary shall develop and implement a public awareness campaign designed using current and relevant independent research regarding strategies and media platforms found to be most effective in communicating with low-income populations in order to increase national awareness regarding the availability of Federal Pell Grants and financial aid under this title.

(2)

Coordination

The public awareness campaign described in paragraph (1) shall leverage the activities in subsections (b) and (c) to highlight eligibility among low-income populations. In developing and implementing the campaign, the Secretary may work in coordination with States, institutions of higher education, early intervention and outreach programs under this title, other Federal agencies, organizations involved in college access and student financial aid, secondary schools, local educational agencies, public libraries, community centers, businesses, employers, workforce investment boards, and organizations that provide services to individuals that are or were homeless, in foster care, or are disconnected youth.

(3)

Reporting

The Secretary shall report on the success of the public awareness campaign described in paragraph (1) annually regarding the extent to which the public and target populations were reached using data commonly used to evaluate advertising and outreach campaigns and data regarding whether the campaign produced any increase in applicants for Federal aid under this title publicly on the Department of Education website.

.

3.

Federal Pell Grants: amount and determinations; applications

(a)

Federal Pell Grants

Beginning on the effective date described in subsection (b), section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a) is amended to read as follows:

401.

Federal Pell Grants: amount and determinations; applications

(a)

Purpose; definitions

(1)

Purpose

The purpose of this subpart is to provide a Federal Pell Grant to low-income students.

(2)

Definitions

In this section—

(A)

the term adjusted gross income means—

(i)

in the case of a dependent student, the adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986) of the student’s parents in the second tax year preceding the academic year; and

(ii)

in the case of an independent student, the adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986) of the student (and the student’s spouse, if applicable) in the second tax year preceding the academic year;

(B)

the term family size has the meaning given the term in section 480(l);

(C)

the term poverty line means the poverty line (as determined under the poverty guidelines updated periodically in the Federal Register by the Department of Health and Human Services under the authority of section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to the student's family size and applicable to the second tax year preceding the academic year;

(D)

the term single parent means—

(i)

a parent of a dependent student who was a head of household (as defined in section 2(b) of the Internal Revenue Code of 1986) or a surviving spouse (as defined in section 2(a) of the Internal Revenue Code of 1986) or was an eligible individual for purposes of the credit under section 32 of such Code, in the second tax year preceding the academic year; or

(ii)

an independent student who was a head of household (as defined in section 2(b) of the Internal Revenue Code of 1986) or a surviving spouse (as defined in section 2(a) of the Internal Revenue Code of 1986) or was an eligible individual for purposes of the credit under section 32 of such Code, in the second tax year preceding the academic year;

(E)

the term total maximum Federal Pell Grant means the total maximum Federal Pell Grant award per student for any academic year described under paragraph (5); and

(F)

the term minimum Federal Pell Grant means the minimum amount of a Federal Pell Grant that shall be awarded to a student eligible under this subpart for any academic year in which that student is attending full time, which shall be equal to 10 percent of the total maximum Federal Pell Grant for such academic year.

(b)

Amount and distribution of grants

(1)

Determination of amount of a Federal Pell Grant

Subject to paragraphs (2) and (3), the amount of a Federal Pell Grant for a student eligible under this subpart shall be determined in accordance with the following:

(A)

A student eligible under this subpart shall be eligible for a total maximum Federal Pell Grant for an academic year in which the student is enrolled in an eligible program full time—

(i)

if the student or, in the case of a dependent student, the dependent student’s parent, is not required to file a Federal income tax return in the second year preceding the academic year;

(ii)

if the student or, in the case of a dependent student, the dependent student’s parent, is a single parent, if the adjusted gross income is equal to or less than 210 percent of the poverty line; or

(iii)

if the student or, in the case of a dependent student, the dependent student’s parent, is not a single parent, if the adjusted gross income is equal to or less than 160 percent of the poverty line.

(B)

A student eligible under this subpart who is not eligible for a total maximum Federal Pell Grant under subparagraph (A) for an academic year, shall be eligible for a Federal Pell Grant for an academic year in which the student is enrolled in an eligible program full time in an amount that is not more than the amount determined in accordance with the following:

(i)

If the student or, in the case of a dependent student, the dependent student’s parent, is a single parent and the adjusted gross income is greater than 210 percent of the poverty line and is less than 310 percent of the poverty line, the amount shall be equal to the greater of—

(I)

the minimum Federal Pell Grant for the academic year; and

(II)

the total maximum Federal Pell Grant for the academic year, minus the product of—

(aa)

the adjusted gross income, less an amount equal to 210 percent of the poverty line; and

(bb)

the total maximum Federal Pell Grant for the academic year, divided by an amount equal to 100 percent of the poverty line.

(ii)

If the student or, in the case of a dependent student, the dependent student’s parent, is not a single parent and the adjusted gross income is greater than 160 percent of the poverty line and is less than 260 percent of the poverty line, the amount shall be equal to the greater of—

(I)

the minimum Federal Pell Grant for the academic year; and

(II)

the total maximum Federal Pell Grant for the academic year, minus the product of—

(aa)

the adjusted gross income, less an amount equal to 160 percent of the poverty line; and

(bb)

the total maximum Federal Pell Grant for the academic year, divided by an amount equal to 100 percent of the poverty line.

(2)

Less than full-time enrollment

In any case where a student is enrolled in an eligible program of an institution of higher education on less than a full-time basis (including a student who attends an institution of higher education on less than a half-time basis) during any academic year, the amount of the Federal Pell Grant to which that student is entitled shall be reduced in direct proportion to the degree to which that student is not so enrolled on a full-time basis, rounded to the nearest whole percentage point, as provided in a schedule of reductions published by the Secretary computed in accordance with this subpart. Such schedule of reductions shall be published in the Federal Register in accordance with section 482 of this Act. Such reduced Federal Pell Grant for a student enrolled on a less than full-time basis shall also apply proportionally to students who are otherwise eligible to receive the minimum Federal Pell Grant, if enrolled full-time.

(3)

Award may not exceed cost of attendance

No Federal Pell Grant under this subpart shall exceed the cost of attendance (as defined in section 472) at the institution at which that student is in attendance. If, with respect to any student, it is determined that the amount of a Federal Pell Grant for that student exceeds the cost of attendance for that year, the amount of the Federal Pell Grant shall be reduced until the Federal Pell Grant does not exceed the cost of attendance at such institution.

(4)

Study abroad

Notwithstanding any other provision of this subpart, the Secretary shall allow the amount of the Federal Pell Grant to be exceeded for students participating in a program of study abroad approved for credit by the institution at which the student is enrolled when the reasonable costs of such program are greater than the cost of attendance at the student's home institution, except that the amount of such Federal Pell Grant in any fiscal year shall not exceed the maximum amount of a Federal Pell Grant for which a student is eligible under paragraph (1) or (2) during such award year. If the preceding sentence applies, the financial aid administrator at the home institution may use the cost of the study abroad program, rather than the home institution's cost, to determine the cost of attendance of the student.

(5)

Total maximum federal pell grant

(A)

In General

For award year 2021–2022, and each subsequent award year, the total maximum Federal Pell Grant award per student shall be equal to the sum of—

(i)

$1,060; and

(ii)

the amount specified as the maximum Federal Pell Grant in the last enacted appropriation Act applicable to that award year.

(B)

Rounding

The total maximum Federal Pell Grant for any award year shall be rounded to the nearest $5.

(6)

Funds by fiscal year

To carry out this section for each of fiscal years 2021 through 2030—

(A)

there are authorized to be appropriated and are appropriated (in addition to any other amounts appropriated to carry out this section and out of any money in the Treasury not otherwise appropriated) such sums as are necessary to carry out paragraph (5)(A)(i); and

(B)

such sums as may be necessary are authorized to be appropriated to carry out paragraph (5)(A)(ii).

(7)

Appropriation

(A)

In general

In addition to any funds appropriated under paragraph (6) and any funds made available for this section under any appropriations Act, there are authorized to be appropriated, and there are appropriated (out of any money in the Treasury not otherwise appropriated) to carry out this section, $1,145,000,000 for fiscal year 2021 and each subsequent award year.

(B)

No effect on previous appropriations

The amendments made to this section by the FAFSA Simplification Act of 2019 shall not—

(i)

increase or decrease the amounts that have been appropriated or are available to carry out this section for fiscal year 2017, 2018, 2019, or 2020 as of the day before the effective date of such Act; or

(ii)

extend the period of availability for obligation that applied to any such amount, as of the day before such effective date.

(8)

Method of distribution

(A)

In general

For each fiscal year through fiscal year 2030, the Secretary shall pay to each eligible institution such sums as may be necessary to pay each eligible student for each academic year during which that student is in attendance at an institution of higher education as an undergraduate, a Federal Pell Grant in the amount for which that student is eligible.

(B)

Alternative disbursement

Nothing in this section shall be interpreted to prohibit the Secretary from paying directly to students, in advance of the beginning of the academic term, an amount for which they are eligible, in the cases where an eligible institution does not participate in the disbursement system under subparagraph (A).

(9)

Additional payment periods in same award year

(A)

Effective in the 2017–2018 award year and thereafter, the Secretary shall award an eligible student not more than one and one-half Federal Pell Grants during a single award year to permit such student to work toward completion of an eligible program if, during that single award year, the student has received a Federal Pell Grant for an award year and is enrolled in an eligible program for one or more additional payment periods during the same award year that are not otherwise fully covered by the student's Federal Pell Grant.

(B)

In the case of a student receiving more than one Federal Pell Grant in a single award year under subparagraph (A), the total amount of Federal Pell Grants awarded to such student for the award year may exceed the total maximum Federal Pell Grant available for an award year.

(C)

Any period of study covered by a Federal Pell Grant awarded under subparagraph (A) shall be included in determining a student's duration limit under subsection (d)(5).

(D)

In any case where an eligible student is receiving a Federal Pell Grant for a payment period that spans 2 award years, the Secretary shall allow the eligible institution in which the student is enrolled to determine the award year to which the additional period shall be assigned, as it determines is most beneficial to students.

(c)

Special rule

(1)

In general

Notwithstanding any other provision of this title, the total maximum Federal Pell Grant shall be provided to a student described in paragraph (2).

(2)

Applicability

Paragraph (1) shall apply to any dependent or independent student—

(A)

who is eligible to receive a Federal Pell Grant for the award year for which the determination is made;

(B)

whose parent or guardian was—

(i)

an individual who, on or after September 11, 2001, died in the line of duty while serving on active duty as a member of the Armed Forces; or

(ii)

actively serving as a public safety officer and died in the line of duty while performing as a public safety officer; and

(C)

who is less than 33 years of age.

(3)

Information

Notwithstanding any other provision of law, the Secretary shall establish the necessary data-sharing agreements with the Secretary of Veterans Affairs and the Secretary of Defense, as applicable, to provide the information necessary to determine which students meet the requirements of paragraph (2).

(4)

Treatment of Pell amount

Notwithstanding section 1212 of the Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C. 10302), in the case of a student who receives an increased Federal Pell Grant amount under this section, the total amount of such Federal Pell Grant, including the increase under this subsection, shall not be considered in calculating that student’s educational assistance benefits under the Public Safety Officers’ Benefits program under subpart 2 of part L of title I of such Act.

(5)

Definition of public safety officer

For purposes of this subsection, the term public safety officer means—

(A)

a public safety officer, as defined in section 1204 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C. 10284); or

(B)

a fire police officer, defined as an individual who—

(i)

is serving in accordance with State or local law as an officially recognized or designated member of a legally organized public safety agency;

(ii)

is not a law enforcement officer, a firefighter, a chaplain, or a member of a rescue squad or ambulance crew; and

(iii)

provides scene security or directs traffic—

(I)

in response to any fire drill, fire call, or other fire, rescue, or police emergency; or

(II)

at a planned special event.

(d)

Period of eligibility for grants

(1)

In General

The period during which a student may receive Federal Pell Grants shall be the period required for the completion of the first undergraduate baccalaureate course of study being pursued by that student at the institution at which the student is in attendance, except that any period during which the student is enrolled in a noncredit or remedial course of study, as described in paragraph (2), shall not be counted for the purpose of this paragraph.

(2)

Noncredit or remedial courses; study abroad

Nothing in this section shall exclude from eligibility courses of study which are noncredit or remedial in nature (including courses in English language instruction) which are determined by the institution to be necessary to help the student be prepared for the pursuit of a first undergraduate baccalaureate degree or certificate or, in the case of courses in English language instruction, to be necessary to enable the student to utilize already existing knowledge, training, or skills. Nothing in this section shall exclude from eligibility programs of study abroad that are approved for credit by the home institution at which the student is enrolled.

(3)

No concurrent payments

No student is entitled to receive Pell Grant payments concurrently from more than one institution or from the Secretary and an institution.

(4)

Postbaccalaureate program

Notwithstanding paragraph (1), the Secretary may allow, on a case-by-case basis, a student to receive a Federal Pell Grant if the student—

(A)

is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education; and

(B)

is enrolled or accepted for enrollment in a postbaccalaureate program that does not lead to a graduate degree, and in courses required by a State in order for the student to receive a professional certification or licensing credential that is required for employment as a teacher in an elementary school or secondary school in that State,

except that this paragraph shall not apply to a student who is enrolled in an institution of higher education that offers a baccalaureate degree in education.
(5)

Maximum period

(A)

In General

Except as provided in subparagraph (B), the period during which a student may receive Federal Pell Grants shall not exceed 12 semesters, or the equivalent of 12 semesters, as determined by the Secretary by regulation. Such regulations shall provide, with respect to a student who received a Federal Pell Grant for a term but was enrolled at a fraction of full time, that only that same fraction of such semester or equivalent shall count towards such duration limits.

(B)

Exception

(i)

In general

Any Federal Pell Grant that a student received during a period described in subclause (I) or (II) of clause (ii) shall not count towards the student’s duration limits under this paragraph.

(ii)

Applicable periods

Clause (i) shall apply with respect to any Federal Pell Grant awarded to a student to enroll in an eligible program at an institution—

(I)

during a period of a student’s attendance at an institution—

(aa)

at which the student was unable to complete a course of study due to the closing of the institution; or

(bb)

for which the student was falsely certified as eligible for Federal aid under this title; or

(II)

during a period—

(aa)

for which the student received a loan under this title; and

(bb)

for which the loan described in item (aa) is discharged under—

(AA)

section 437(c)(1) or section 464(g)(1); or

(BB)

section 432(a)(6).

(e)

Applications for grants

(1)

Deadlines

The Secretary shall from time to time set dates by which students shall file the Free Application for Federal Student Aid under this subpart.

(2)

Application

Each student desiring a Federal Pell Grant for any year shall file the Free Application for Federal Student Aid containing the information necessary to enable the Secretary to carry out the functions and responsibilities of this subpart.

(f)

Distribution of grants to students

Payments under this section shall be made in accordance with regulations promulgated by the Secretary for such purpose, in such manner as will best accomplish the purpose of this section. Any disbursement allowed to be made by crediting the student's account shall be limited to tuition and fees, and food and housing if that food and housing is institutionally owned or operated. The student may elect to have the institution provide other such goods and services by crediting the student's account.

(g)

Insufficient appropriations

If, for any fiscal year, the funds appropriated for payments under this subpart are insufficient to satisfy fully all entitlements, as calculated under subsection (b) (but at the maximum grant level specified in such appropriation), the Secretary shall promptly transmit a notice of such insufficiency to each House of the Congress, and identify in such notice the additional amount that would be required to be appropriated to satisfy fully all entitlements (as so calculated at such maximum grant level).

(h)

Use of excess funds

(1)

15 percent or less

If, at the end of a fiscal year, the funds available for making payments under this subpart exceed the amount necessary to make the payments required under this subpart to eligible students by 15 percent or less, then all of the excess funds shall remain available for making payments under this subpart during the next succeeding fiscal year.

(2)

More than 15 percent

If, at the end of a fiscal year, the funds available for making payments under this subpart exceed the amount necessary to make the payments required under this subpart to eligible students by more than 15 percent, then all of such funds shall remain available for making such payments but payments may be made under this paragraph only with respect to entitlements for that fiscal year.

(i)

Treatment of institutions and students under other laws

Any institution of higher education which enters into an agreement with the Secretary to disburse to students attending that institution the amounts those students are eligible to receive under this subpart shall not be deemed, by virtue of such agreement, a contractor maintaining a system of records to accomplish a function of the Secretary. Recipients of Pell Grants shall not be considered to be individual grantees for purposes of subtitle D of title V of Public Law 100–690.

(j)

Institutional ineligibility based on default rates

(1)

In general

No institution of higher education shall be an eligible institution for purposes of this subpart if such institution of higher education is ineligible to participate in a loan program under part B or D as a result of a final default rate determination made by the Secretary under part B or D after the final publication of cohort default rates for fiscal year 1996 or a succeeding fiscal year.

(2)

Sanctions subject to appeal opportunity

No institution may be subject to the terms of this subsection unless the institution has had the opportunity to appeal the institution's default rate determination under regulations issued by the Secretary for the loan program authorized under part B or D, as applicable. This subsection shall not apply to an institution that was not participating in the loan program authorized under part B or D on October 7, 1998, unless the institution subsequently participates in the loan programs.

.

(b)

Effective date

This section, and the amendments made by this section, shall take effect on July 1, 2021.