A group of senators proposed a bipartisan amendment to the House-passed Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act to provide $255 million in permanent annual funding for Historically Black Colleges and Universities and Minority Serving Institutions (MSIs), simplify the Free Application for Federal Student Aid (FAFSA) and verification, and streamline income-driven repayment. The proposal would also allow for direct data sharing between the Internal Revenue Service (IRS) and the Department of Education (ED).
While the House-passed FUTURE Act would extend $255 million in annual MSI funding for just two years, the new proposed amendment would provide a permanent funding stream to support STEM education at MSIs. The proposed bill includes language from the Faster Access to Federal Student Aid (FAFSA) Act of 2018 passed by the Senate last year. Senate leaders determined they could pay for permanent MSI funding by with $2.8 billion in annual savings from the FAFSA Act by simplifying the financial aid application and loan repayment processes.
The amended FUTURE Act would amend the Internal Revenue Code (IRC) to allow the IRS to disclose tax return information directly to authorized ED officials for the purposes of “determining eligibility for, and amount of, Federal student financial aid.” The allowable information to be disclosed would include all items currently transferred via the DRT, as well as the taxpayer’s filing status, whether they filed a lettered tax schedule, and whether the individual(s) had filed taxes. With information coming directly from the IRS, more income data will be confirmed by the IRS upon application, which should lead to a reduction in applications selected for verification, and a corresponding reduction in the associated burden on students and institutions. The legislation should also largely do away with the verification of non-filing requirement, since the bill includes whether the individual(s) filed tax returns as one of the shared IRS information elements.
“[The FUTURE Act ] takes a big first step in simplifying the FAFSA for 20 million American families, including 8 million minority students, and eliminating the bureaucratic nightmare created by requiring students to give the federal government the same information twice,” Senator Alexander said.
The bill would also permit ED to share tax return information “solely for the use in the application, award, and administration of student financial aid or aid awarded by such entities as the Secretary of Education may designate” to eligible institutions of higher education, state higher education agencies, and certain scholarship organizations with the applicant’s consent, which would be obtained on the FAFSA.
The bill would create a more secure data-sharing experience, reduce applicant errors in reported income, and reduce improper payments. The bill also aims to improve cost estimates and forecasting of the federal student aid programs by including oversight and analysis as an allowable use of shared IRS information. In addition to providing a more streamlined, less burdensome process for students and families, the bill also provides some additional funding for the Pell Grant program.
Following the release of the FUTURE Act, the Senate unanimously passed the act. Today, December 10, the House passed the updated FUTURE Act. The act will go back to the Senate for a final vote.
Sources:
Press Release: Senate Education Leaders Propose Bipartisan Solution to Permanently Fund Historically Black Colleges and Universities and Minority Serving Institutions
ICYMI: Senate Unanimously Passes Bipartisan Legislation to Allow IRS-ED Data Sharing, Fund MSIs
NASFAA Supports Bipartisan FAFSA Act and Permanent MSI Funding in FUTURE Act