The FAFSA Simplification Act

Changes from September 15, 2021 to January 19, 2022

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with ~~red strikethrough~~ and textual matter added in the later version is indicated with blue.

The FAFSA Simplification Act
~~September 15, 2021~~January 19, 2022
The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended), authorizes numerous The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended), authorizes numerous
federal aid programs that provide support to both individuals pursuing a postsecondary education federal aid programs that provide support to both individuals pursuing a postsecondary education
Benjamin Collins
and institutions of higher education (IHEs). Title IV of the HEA authorizes the primary sources and institutions of higher education (IHEs). Title IV of the HEA authorizes the primary sources
Analyst in Labor Policy Analyst in Labor Policy
of postsecondary federal student aid, including Pell Grants and Direct Loans. Students apply for of postsecondary federal student aid, including Pell Grants and Direct Loans. Students apply for

federal student aid by completing the Free Application for Federal Student Aid (FAFSA). There federal student aid by completing the Free Application for Federal Student Aid (FAFSA). There
Cassandria Dortch
have been several long-standing concerns that the length and complexity of the FAFSA, and the have been several long-standing concerns that the length and complexity of the FAFSA, and the
Specialist in Education Specialist in Education
lack of transparency and predictability its use provides for students and their families, may lack of transparency and predictability its use provides for students and their families, may
Policy Policy
discourage postsecondary educational access and attainment. discourage postsecondary educational access and attainment.

The FAFSA Simplification Act (FSA; Title VII, Division FF of P.L. 116-260) makes significant The FAFSA Simplification Act (FSA; Title VII, Division FF of P.L. 116-260) makes significant

changes to the underlying processes and methodologies for determining federal student aid changes to the underlying processes and methodologies for determining federal student aid
eligibility. The FSA amendments specify that most of its provisions are scheduled to take effect on July 1, 2023, though the eligibility. The FSA amendments specify that most of its provisions are scheduled to take effect on July 1, 2023, though the
Department of Education (ED) has stated that some provisions will have a phased implementation that will extend to the Department of Education (ED) has stated that some provisions will have a phased implementation that will extend to the
2024-2025 award year. 2024-2025 award year.
The FSA amendments retain need analysis formulas that establish an indicator of what the student’s family is expected to pay The FSA amendments retain need analysis formulas that establish an indicator of what the student’s family is expected to pay
for higher education based on information provided on the FAFSA. The FSA amends the indicator’s name from for higher education based on information provided on the FAFSA. The FSA amends the indicator’s name from expected
family contribution (EFC) to (EFC) to student aid index (SAI). The SAI has fewer formula factors than the EFC, requires fewer (SAI). The SAI has fewer formula factors than the EFC, requires fewer
questions on the FAFSA, and permits a higher share of FAFSA responses to be imported from a federal income tax return. questions on the FAFSA, and permits a higher share of FAFSA responses to be imported from a federal income tax return.
To make the student aid process more predictable for low-income students, the FSA amendments establish a new policy by To make the student aid process more predictable for low-income students, the FSA amendments establish a new policy by
which students with an adjusted gross income (AGI) below specified levels can automatically qualify for a maximum Pell which students with an adjusted gross income (AGI) below specified levels can automatically qualify for a maximum Pell
Grant. The AGI threshold is either 175% or 225% of federal poverty guidelines, depending on the student’s dependency Grant. The AGI threshold is either 175% or 225% of federal poverty guidelines, depending on the student’s dependency
status and marital status. In the case of a dependent student, the marital status criteria and AGI threshold are applied to the status and marital status. In the case of a dependent student, the marital status criteria and AGI threshold are applied to the
student’s parent(s). student’s parent(s).
Students who do not qualify for a Pell Grant based on their AGI can still qualify for a Pell Grant based on their calculated Students who do not qualify for a Pell Grant based on their AGI can still qualify for a Pell Grant based on their calculated
SAI. Students who qualify for a maximum Pell Grant based on their AGI qualify for an SAI of zero or, in certain cases, SAI. Students who qualify for a maximum Pell Grant based on their AGI qualify for an SAI of zero or, in certain cases, ~~less~~
~~than zero~~negative SAI. The SAI of these students establishes eligibility for maximum amounts of other forms of need-based federal . The SAI of these students establishes eligibility for maximum amounts of other forms of need-based federal
student aid. student aid.
The FSA amendments make additional changes to the award rules and some eligibility criteria for the Pell Grant program. The FSA amendments make additional changes to the award rules and some eligibility criteria for the Pell Grant program.
For students enrolled less than full-time, their Pell Grant will be reduced in proportion to their actual enrollment rate (e.g., 11 For students enrolled less than full-time, their Pell Grant will be reduced in proportion to their actual enrollment rate (e.g., 11
credits out of 12 full-time credits) instead of their tiered enrollment rate (e.g., less than full-time but at least three-quarter-credits out of 12 full-time credits) instead of their tiered enrollment rate (e.g., less than full-time but at least three-quarter-
time). With respect to eligibility, the FSA amendments eliminate the prohibition against students incarcerated in a federal or time). With respect to eligibility, the FSA amendments eliminate the prohibition against students incarcerated in a federal or
state penal institution receiving a Pell Grant, but state penal institution receiving a Pell Grant, but ~~it requires~~require that Pell Grant recipients in a correctional institution be enrolled that Pell Grant recipients in a correctional institution be enrolled
in prison education programs. These programs must meet all of the HEA Title IV program eligibility requirements and in prison education programs. These programs must meet all of the HEA Title IV program eligibility requirements and
additional requirements, many of which are intended to help incarcerated individuals seek further education or employment additional requirements, many of which are intended to help incarcerated individuals seek further education or employment
upon release. upon release.
The FSA amendments expand student aid access by eliminating prohibitions for students with certain drug-related offenses The FSA amendments expand student aid access by eliminating prohibitions for students with certain drug-related offenses
and students who failed to register for the Selective Service. The FSA amendments modify procedures by which certain and students who failed to register for the Selective Service. The FSA amendments modify procedures by which certain
student populations can establish independent student status and not provide parental information on the FAFSA. student populations can establish independent student status and not provide parental information on the FAFSA.
The FSA amendments provide relief to borrowers of loans made through two HEA loan programs. It repeals the Direct Loan The FSA amendments provide relief to borrowers of loans made through two HEA loan programs. It repeals the Direct Loan
program’s Subsidized Usage Limit Applies (SULA) requirement so eligible undergraduate students who borrow Direct program’s Subsidized Usage Limit Applies (SULA) requirement so eligible undergraduate students who borrow Direct
Subsidized Loans retain their interest subsidy despite remaining enrolled for a period that exceeds 150% of the published Subsidized Loans retain their interest subsidy despite remaining enrolled for a period that exceeds 150% of the published
length of their academic program. The FSA amendments also direct ED to repay the outstanding balances on Historically length of their academic program. The FSA amendments also direct ED to repay the outstanding balances on Historically
Black Colleges and Universities Capital Financing loan amounts that had been disbursed Black Colleges and Universities Capital Financing loan amounts that had been disbursed to eligible institutions as of December 27, 2020. as of December 27, 2020.
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The FAFSA Simplification Act

Introduction
Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the
primary sources of federal aid to support postsecondary education students. Title IV programs primary sources of federal aid to support postsecondary education students. Title IV programs
made over $118 billion in aid available to postsecondary students in FY2020 through Direct made over $118 billion in aid available to postsecondary students in FY2020 through Direct
Loans and other forms of aid, including $27 billion in Pell Grants.1 The FAFSA Simplification Loans and other forms of aid, including $27 billion in Pell Grants.1 The FAFSA Simplification
Act (FSA; Title VII, Division FF of P.L. 116-260, Consolidated Appropriations Act, 2021) makes Act (FSA; Title VII, Division FF of P.L. 116-260, Consolidated Appropriations Act, 2021) makes
significant changes to the underlying processes and methodologies for determining student significant changes to the underlying processes and methodologies for determining student
eligibility for federal student aid authorized by Title IV. eligibility for federal student aid authorized by Title IV.
The FSA is intended principally to address several long-standing concerns with the HEA Title IV The FSA is intended principally to address several long-standing concerns with the HEA Title IV
federal student aid application process. Specifically, the current process has been criticized for federal student aid application process. Specifically, the current process has been criticized for
being too complicated to navigate, with the length and complexity of the Free Application for being too complicated to navigate, with the length and complexity of the Free Application for
Federal Student Aid (FAFSA)—the instrument students use to apply for federal student aid—Federal Student Aid (FAFSA)—the instrument students use to apply for federal student aid—
being consistent targets of the criticism. The student aid application and award process has also being consistent targets of the criticism. The student aid application and award process has also
been criticized for lacking transparency and predictability for students and their families. This is been criticized for lacking transparency and predictability for students and their families. This is
because the methodology for calculating award amounts is opaque. In addition, students are not because the methodology for calculating award amounts is opaque. In addition, students are not
aware of how much federal aid they may be eligible for until an institution of higher education aware of how much federal aid they may be eligible for until an institution of higher education
(IHE) to which they have been admitted provides an award letter. As a result, critics of the current (IHE) to which they have been admitted provides an award letter. As a result, critics of the current
system argue that students and their families may be discouraged from applying for aid and system argue that students and their families may be discouraged from applying for aid and
consequently may be discouraged from pursuing postsecondary education.2 consequently may be discouraged from pursuing postsecondary education.2
To address these issues, the FSA aims to streamline the application and need assessment To address these issues, the FSA aims to streamline the application and need assessment
procedures for federal student aid. Eligible low-income students will be able to qualify for a procedures for federal student aid. Eligible low-income students will be able to qualify for a
maximum Pell Grant and other forms of need-based aid based on a single financial indicator maximum Pell Grant and other forms of need-based aid based on a single financial indicator
(adjusted gross income [AGI]) and procedures are streamlined for other students. The FSA (adjusted gross income [AGI]) and procedures are streamlined for other students. The FSA
amendments expand eligibility for Pell Grants and other forms of student aid and establishes a amendments expand eligibility for Pell Grants and other forms of student aid and establishes a
number of procedural changes, many of which are directed at easing access to aid for specific number of procedural changes, many of which are directed at easing access to aid for specific
student populations. student populations.
This report begins with brief background on the HEA and administration of the FSA. It then This report begins with brief background on the HEA and administration of the FSA. It then
focuses on the FSA’s changes to the student aid application process, associated formulas for focuses on the FSA’s changes to the student aid application process, associated formulas for
calculating student need, and the Pell Grant program. The final sections include descriptions of calculating student need, and the Pell Grant program. The final sections include descriptions of
FSA provisions affecting Direct Subsidized Loans FSA provisions affecting Direct Subsidized Loans for students and the Historically Black Colleges and and the Historically Black Colleges and
Universities Capital Financing programUniversities Capital Financing program for eligible institutions. .
Background and Framework for the HEA Prior to
the FSA Amendments Going into Effect
To be eligible for any HEA Title IV federal student aid, a student or prospective student must To be eligible for any HEA Title IV federal student aid, a student or prospective student must
complete the FAFSA. In addition to specified financial information, the FAFSA collects complete the FAFSA. In addition to specified financial information, the FAFSA collects
information regarding the student’s citizenship, the student’s prior educational achievement, and information regarding the student’s citizenship, the student’s prior educational achievement, and
a range of personal and family characteristics. Information on income, assets, and other a range of personal and family characteristics. Information on income, assets, and other

1 U.S. Department of Education, President’s Budget Request FY2022, p. O-4. Available aid includes institutional 1 U.S. Department of Education, President’s Budget Request FY2022, p. O-4. Available aid includes institutional
matching funds but excludes loans issued to consolidate existing loans (Consolidation Loans). For more information on matching funds but excludes loans issued to consolidate existing loans (Consolidation Loans). For more information on
Title IV aid programs, see CRS Report R43351, Title IV aid programs, see CRS Report R43351, The Higher Education Act (HEA): A Primer. .
2 U.S. Congress, Senate Committee on Health, Education, Labor, and Pensions, 2 U.S. Congress, Senate Committee on Health, Education, Labor, and Pensions, Time to Finish Fixing the FAFSA, 116th , 116th
Cong., 2nd sess., September 17, 2020, Opening Remarks by Senators Lamar Alexander and Patty Murray. Cong., 2nd sess., September 17, 2020, Opening Remarks by Senators Lamar Alexander and Patty Murray.
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characteristics provided on the FAFSA is used to calculate the student’s expected family characteristics provided on the FAFSA is used to calculate the student’s expected family
contribution (EFC) toward postsecondary education based on multipart statutory formulas. The contribution (EFC) toward postsecondary education based on multipart statutory formulas. The
HEA establishes three EFC formulas: one each for (1) dependent students, (2) independent HEA establishes three EFC formulas: one each for (1) dependent students, (2) independent
students without dependents, and (3) independent students with dependents.3 The formula for students without dependents, and (3) independent students with dependents.3 The formula for
dependent students considers the financial resources of the student’s parents while the formulas dependent students considers the financial resources of the student’s parents while the formulas
for independent students do not. for independent students do not.
Under the HEA, a student is determined to be independent if the student meets any of a list of Under the HEA, a student is determined to be independent if the student meets any of a list of
criteria, including (but not limited to) being 24 years of age on January 1 of the award year, being criteria, including (but not limited to) being 24 years of age on January 1 of the award year, being
married, having dependents, or being a veteran of the Armed Forces.4 Students who do not meet married, having dependents, or being a veteran of the Armed Forces.4 Students who do not meet
any of the independent student criteria are determined to be dependent and must report parental any of the independent student criteria are determined to be dependent and must report parental
information.5 information.5
Eligibility for many federal student aid programs is contingent on student financial need. Under Eligibility for many federal student aid programs is contingent on student financial need. Under
current law, student need is defined as the difference between the student’s cost of attendance current law, student need is defined as the difference between the student’s cost of attendance
(COA) as determined by the school and the sum of the student’s EFC and estimated financial (COA) as determined by the school and the sum of the student’s EFC and estimated financial
assistance (EFA).6 COA is an estimate of a student’s educational expenses for the period of assistance (EFA).6 COA is an estimate of a student’s educational expenses for the period of
enrollment. Generally, EFA includes most scholarships, grants, loans, or other assistance known enrollment. Generally, EFA includes most scholarships, grants, loans, or other assistance known
to the school at the time the determination of the student’s need is made. Students with a zero to the school at the time the determination of the student’s need is made. Students with a zero
EFC may qualify for the maximum amount of need-based federal student aid, including a EFC may qualify for the maximum amount of need-based federal student aid, including a
maximum Pell Grant.7 maximum Pell Grant.7
Administration of the FSA
This section describes the FSA’s implementation. It discusses the effective date of the act and This section describes the FSA’s implementation. It discusses the effective date of the act and
necessary procedures that the U.S. Department of Education (ED) must follow to implement the necessary procedures that the U.S. Department of Education (ED) must follow to implement the
act. In addition, a change in HEA Title IV aid need analysis terminology is described. act. In addition, a change in HEA Title IV aid need analysis terminology is described.
Effective Date and Associated Rulemaking
The FSA specifies that most of its provisions are scheduled to take effect on July 1, 2023, The FSA specifies that most of its provisions are scheduled to take effect on July 1, 2023,
coinciding with the beginning of the 2023-2024 award year, and remain in effect for each coinciding with the beginning of the 2023-2024 award year, and remain in effect for each
subsequent award year.8 The law grants the Secretary of Education “the authority to take such subsequent award year.8 The law grants the Secretary of Education “the authority to take such
steps as are necessary before July 1, 2023, to provide for the orderly implementation on such date steps as are necessary before July 1, 2023, to provide for the orderly implementation on such date
of the amendments.” In limited instances, the July 1, 2023, date serves as a deadline for the of the amendments.” In limited instances, the July 1, 2023, date serves as a deadline for the
implementation of certain provisions, and ED has the authority to implement the specified implementation of certain provisions, and ED has the authority to implement the specified
provisions earlier. These instances are noted in this report, as relevant. ED has indicated that it is provisions earlier. These instances are noted in this report, as relevant. ED has indicated that it is
anticipating a phased implementation of FSA provisions that would extend to the 2024-2025 anticipating a phased implementation of FSA provisions that would extend to the 2024-2025
award year.9 award year.9

3 For a detailed description of the formulas prior to the effective date of the FSA, see CRS Report R44503, 3 For a detailed description of the formulas prior to the effective date of the FSA, see CRS Report R44503, Federal
Student Aid: Need Analysis Formulas and Expected Family Contribution. .
4 See HEA §480(d) for full criteria. 4 See HEA §480(d) for full criteria.
5 In limited cases, students who do not meet any of the independent student criteria may qualify for independent student 5 In limited cases, students who do not meet any of the independent student criteria may qualify for independent student
status via a dependency override. See the status via a dependency override. See the “Dependency Overrides” section later in this report. section later in this report.
6 HEA §471, as in effect prior to implementation of the FSA. 6 HEA §471, as in effect prior to implementation of the FSA.
7 Prior to the effective date of the FSA, students may not receive federal aid in excess of COA. See, for example, HEA 7 Prior to the effective date of the FSA, students may not receive federal aid in excess of COA. See, for example, HEA
§§401(b)(3), 401(b)(5), 420M(c)(2), 420R(d)(3), 428B(b), and 428H(c). §§401(b)(3), 401(b)(5), 420M(c)(2), 420R(d)(3), 428B(b), and 428H(c).
8 FSA §701(b). 8 FSA §701(b).
9 U.S. Department of Education, “Beginning Phased Implementation of the FAFSA Simplification Act,” June 11, 2021, 9 U.S. Department of Education, “Beginning Phased Implementation of the FAFSA Simplification Act,” June 11, 2021,
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The FAFSA Simplification Act

Except as prohibited in statute, the Secretary may choose to update existing regulations or Except as prohibited in statute, the Secretary may choose to update existing regulations or
promulgate new regulations. There are relevant existing regulations for Pell Grants, HEA Title IV promulgate new regulations. There are relevant existing regulations for Pell Grants, HEA Title IV
student eligibility, and the verification and updating of student aid application information. The student eligibility, and the verification and updating of student aid application information. The
HEA limits the Secretary’s ability to prescribe regulations on need analysis.10 HEA Section 492 HEA limits the Secretary’s ability to prescribe regulations on need analysis.10 HEA Section 492
generally requires that any new or revised HEA Title IV regulations be devised through generally requires that any new or revised HEA Title IV regulations be devised through
negotiated rulemaking.11 Under negotiated rulemaking, the Secretary tries to develop proposed negotiated rulemaking.11 Under negotiated rulemaking, the Secretary tries to develop proposed
rules in collaboration with a committee of affected stakeholders. In general, HEA Section 482 rules in collaboration with a committee of affected stakeholders. In general, HEA Section 482
requires that final Title IV regulations be published by November 1 prior to the start of the award requires that final Title IV regulations be published by November 1 prior to the start of the award
year (July 1) in which they become effective.12 To go into effect on July 1, 2023, final regulations year (July 1) in which they become effective.12 To go into effect on July 1, 2023, final regulations
related to the FSA must generally be published by November 1, 2022. related to the FSA must generally be published by November 1, 2022.
EFC Renamed as Student Aid Index
The FSA amendments replace the EFC with a new indicator: The FSA amendments replace the EFC with a new indicator: student aid index (SAI). The SAI is (SAI). The SAI is
similar to the EFC: both metrics are a dollar amount that synthesizes personal and financial similar to the EFC: both metrics are a dollar amount that synthesizes personal and financial
characteristics to estimate the ability of an applicant to pay for postsecondary education.13 While characteristics to estimate the ability of an applicant to pay for postsecondary education.13 While
there are a number of differences in the details, the general procedures in calculating the EFC and there are a number of differences in the details, the general procedures in calculating the EFC and
SAI are similar.14 The remainder of this report will use EFC when referring to provisions in effect SAI are similar.14 The remainder of this report will use EFC when referring to provisions in effect
prior to the effective date of the FSA amendments and SAI when referring to provisions under the prior to the effective date of the FSA amendments and SAI when referring to provisions under the
FSA amendments. FSA amendments.
Needs Analysis: Changes to the FAFSA Process and
Aid Eligibility Calculations
The FSA amendments retain the existing system of using information supplied on the FAFSA to The FSA amendments retain the existing system of using information supplied on the FAFSA to
establish an indicator of the capacity of a student’s family to pay for postsecondary education that establish an indicator of the capacity of a student’s family to pay for postsecondary education that
informs subsequent aid eligibility. The new SAI formulas maintain most of the major components informs subsequent aid eligibility. The new SAI formulas maintain most of the major components
of the three existing EFC formulas, though the FSA amendments make a number of changes to of the three existing EFC formulas, though the FSA amendments make a number of changes to
specific factors and procedures, usually with an objective of simplifying calculations or specific factors and procedures, usually with an objective of simplifying calculations or
expanding aid for lower-income students. expanding aid for lower-income students.

GEN-21-39, at https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-06-11/beginning-GEN-21-39, at https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-06-11/beginning-
phased-implementation-fafsa-simplification-act-ea-id-general-21-39. phased-implementation-fafsa-simplification-act-ea-id-general-21-39.
10 HEA §478(a). 10 HEA §478(a).
11 For more information about HEA Title IV negotiated rulemaking, see U.S. Department of Education, 11 For more information about HEA Title IV negotiated rulemaking, see U.S. Department of Education, The Negotiated
Rulemaking Process for Title IV Regulations - Frequently Asked Questions, available at , available at
https://www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html. For general information on https://www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html. For general information on
negotiated rulemaking, see CRS Report R46756, negotiated rulemaking, see CRS Report R46756, Negotiated Rulemaking: In Brief. .
12 HEA §482. 12 HEA §482.
13 This report will use the term 13 This report will use the term applicant to refer to persons who are required to provide information on a student’s to refer to persons who are required to provide information on a student’s
FAFSA. In the case of a dependent student, FAFSA. In the case of a dependent student, applicant includes the student as well as the student’s parent or parents. In includes the student as well as the student’s parent or parents. In
the case of an independent student, the case of an independent student, applicant includes the student and the student’s spouse, if applicable. includes the student and the student’s spouse, if applicable.
14 Both the EFC and SAI follow the general procedure of calculating total income, subtracting specified allowances, 14 Both the EFC and SAI follow the general procedure of calculating total income, subtracting specified allowances,
and then assessing a percentage of available income. In cases where assets are considered, similar procedures are and then assessing a percentage of available income. In cases where assets are considered, similar procedures are
followed for assets under both the EFC and SAI calculations. followed for assets under both the EFC and SAI calculations.
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Length of the FAFSA and Effect of the FSA Amendments
Both before and after the FSA amendments take effect, the number of questions an applicant must complete when Both before and after the FSA amendments take effect, the number of questions an applicant must complete when
filing the FAFSA is impacted by the student’s dependency status, whether the student qualifies for a streamlined filing the FAFSA is impacted by the student’s dependency status, whether the student qualifies for a streamlined
calculation, and how ED translates statutory provisions into individual questions. calculation, and how ED translates statutory provisions into individual questions.
Some descriptions of the FSA amendments reference a reduction in the number of questions on the FAFSA once Some descriptions of the FSA amendments reference a reduction in the number of questions on the FAFSA once
the law is implemented. These descriptions anticipate a reduction in questions primarily due to the reduction of the law is implemented. These descriptions anticipate a reduction in questions primarily due to the reduction of
formula factors as specified by the FSA amendments (see the formula factors as specified by the FSA amendments (see the “Changes to Financial Factors: Reduction of Factors”
section) and the implementation of the data-sharing provisions under the FUTURE Act (P.L. 116-91), which, when section) and the implementation of the data-sharing provisions under the FUTURE Act (P.L. 116-91), which, when
implemented, wil require applicants to consent to have their tax information disclosed rather than requiring them implemented, wil require applicants to consent to have their tax information disclosed rather than requiring them
to provide such information (see the to provide such information (see the “Integration with the FUTURE Act” section). The increased alignment of section). The increased alignment of
certain formula components with tax definitions may further reduce the amount of information that must be certain formula components with tax definitions may further reduce the amount of information that must be
provided provided directly by applicants. by applicants.
The elimination of disqualifications for students who did not register with the Selective Service or who had certain The elimination of disqualifications for students who did not register with the Selective Service or who had certain
drug-related convictions (see the drug-related convictions (see the “Effect of Drug Convictions and Draft Registration on Student Eligibility”
section) wil also eliminate the need for the related questions on the FAFSA. New policies related to granting section) wil also eliminate the need for the related questions on the FAFSA. New policies related to granting
consent under the FUTURE Act and col ecting certain demographic information wil add new questions. consent under the FUTURE Act and col ecting certain demographic information wil add new questions.
Zero and Negative SAI
Under current law, a student’s EFC cannot be less than zero dollars.15 Under the FSA Under current law, a student’s EFC cannot be less than zero dollars.15 Under the FSA
amendments, the SAI can be as low as -$1,500. amendments, the SAI can be as low as -$1,500.
A negative SAI can provide differentiation among the share of the students who, under current A negative SAI can provide differentiation among the share of the students who, under current
law, may all have an EFC of zero. This differentiation among low-income students can help law, may all have an EFC of zero. This differentiation among low-income students can help
schools more precisely target federal campus-based aid as well as institutional aid. schools more precisely target federal campus-based aid as well as institutional aid.
A negative SAI will not entitle a student to a larger Pell Grant compared to a student with a zero A negative SAI will not entitle a student to a larger Pell Grant compared to a student with a zero
SAI. Both students will qualify for a maximum Pell Grant. Because a negative SAI establishes SAI. Both students will qualify for a maximum Pell Grant. Because a negative SAI establishes
student need greater than COA, the FSA amendments create a framework in which it may be student need greater than COA, the FSA amendments create a framework in which it may be
possible for some students to receive aid in excess of COA.16 possible for some students to receive aid in excess of COA.16
Automatic SAI Determinations
The HEA currently establishes an “automatic zero” EFC provision for applicants who report an The HEA currently establishes an “automatic zero” EFC provision for applicants who report an
AGI below a specified level ($27,000 in the 2021-2022 award year) and meet other criteria.17 AGI below a specified level ($27,000 in the 2021-2022 award year) and meet other criteria.17
Such applicants are not required to answer additional income or asset questions on their FAFSA. Such applicants are not required to answer additional income or asset questions on their FAFSA.
The FSA amendments eliminate the automatic zero EFC provisions and replaces them with The FSA amendments eliminate the automatic zero EFC provisions and replaces them with
special rules that establish a zero or negative SAI for some students:18 special rules that establish a zero or negative SAI for some students:18

15 This requirement is established in the respective sections of the HEA that establish the EFC formula for each 15 This requirement is established in the respective sections of the HEA that establish the EFC formula for each
dependency status. For example, see HEA Section 476(a)(3) for language related to independent students without dependency status. For example, see HEA Section 476(a)(3) for language related to independent students without
dependents. dependents.
16 The exact aid packaging options will depend on how ED interprets the totality of the FSA and existing provisions of 16 The exact aid packaging options will depend on how ED interprets the totality of the FSA and existing provisions of
the HEA. For example, HEA Section 413B(a) specifies that the Federal Supplemental Educational Opportunity Grant the HEA. For example, HEA Section 413B(a) specifies that the Federal Supplemental Educational Opportunity Grant
can be awarded up to need as specified under Part F of the HEA, which would suggest that campus-based aid could be can be awarded up to need as specified under Part F of the HEA, which would suggest that campus-based aid could be
awarded in excess of COA to a student with a negative SAI. Conversely, HEA Section 428H(c) specifies that awarded in excess of COA to a student with a negative SAI. Conversely, HEA Section 428H(c) specifies that
unsubsidized loan amounts are determined by subtracting from COA any estimated financial assistance. This could be unsubsidized loan amounts are determined by subtracting from COA any estimated financial assistance. This could be
interpreted to suggest that any aid package with unsubsidized loans could not exceed COA. interpreted to suggest that any aid package with unsubsidized loans could not exceed COA.
17 HEA §479(c), as in effect prior to implementation of the FSA. For the current threshold, see EFC Formula Guide for 17 HEA §479(c), as in effect prior to implementation of the FSA. For the current threshold, see EFC Formula Guide for
AY2021-2022 at https://fsapartners.ed.gov/sites/default/files/attachments/2020-08/2122EFCFormulaGuide.pdf. AY2021-2022 at https://fsapartners.ed.gov/sites/default/files/attachments/2020-08/2122EFCFormulaGuide.pdf.
18 HEA §473, as amended by the FSA. 18 HEA §473, as amended by the FSA.
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 Independent students who are not required to file a tax return, or dependent  Independent students who are not required to file a tax return, or dependent
students whose parents are not required to do so, automatically qualify for an SAI students whose parents are not required to do so, automatically qualify for an SAI
of -$1,500. of -$1,500.
 Students who qualify for a maximum Pell Grant based on a qualifying AGI  Students who qualify for a maximum Pell Grant based on a qualifying AGI
qualify for a zero SAI (see the qualify for a zero SAI (see the “Scheduled Award Under the FSA Amendments”). ).
If the student’s calculated SAI is less than zero, the negative SAI applies.19 If the student’s calculated SAI is less than zero, the negative SAI applies.19
Students whose SAI is not determined under either of these special rules will have their SAI Students whose SAI is not determined under either of these special rules will have their SAI
calculated based on the formulas in the statute. calculated based on the formulas in the statute.
Students Exempt from Reporting Assets
Until the FSA amendments take effect, the HEA establishes a Until the FSA amendments take effect, the HEA establishes a simplified needs test (SNT) for (SNT) for
applicants with an adjusted gross income below $50,000 and who meet other criteria that relate to applicants with an adjusted gross income below $50,000 and who meet other criteria that relate to
filing tax forms that are typically associated with a simple return or being in receipt of specified filing tax forms that are typically associated with a simple return or being in receipt of specified
federal means-tested benefits.20 Students who qualify for the SNT are not required to report asset federal means-tested benefits.20 Students who qualify for the SNT are not required to report asset
information on the FAFSA for the purposes of determining federal student aid eligibility. information on the FAFSA for the purposes of determining federal student aid eligibility.
The FSA amendments eliminate the SNT terminology and The FSA amendments eliminate the SNT terminology and ~~modifies~~modify the criteria to exempt certain the criteria to exempt certain
applicants from asset reporting. Under the FSA amendments, the AGI threshold increases to applicants from asset reporting. Under the FSA amendments, the AGI threshold increases to
$60,000. The FSA amendments establish that eligible tax returns are those in which an applicant $60,000. The FSA amendments establish that eligible tax returns are those in which an applicant
does not file specified tax schedules or files schedules within certain parameters. Applicants can does not file specified tax schedules or files schedules within certain parameters. Applicants can
continue to be exempt from reporting assets based on receiving a federal means-tested benefit.21 continue to be exempt from reporting assets based on receiving a federal means-tested benefit.21
Changes to Financial Factors and the Calculation Process
The FSA amendments reduce the number of factors to be considered when determining the ability The FSA amendments reduce the number of factors to be considered when determining the ability
of a student’s family to contribute to higher education costs. The FSA amendments also make a of a student’s family to contribute to higher education costs. The FSA amendments also make a
number of adjustments to the calculation process. number of adjustments to the calculation process.
Changes to Financial Factors: Reduction of Factors
The EFC formulas consider AGI as well as specified forms of The EFC formulas consider AGI as well as specified forms of untaxed income and and excludable
income. Untaxed income increases the applicant’s total income and can correspondingly increase . Untaxed income increases the applicant’s total income and can correspondingly increase
the EFC. Conversely, excludable income reduces available income and can reduce the EFC. the EFC. Conversely, excludable income reduces available income and can reduce the EFC.
The FSA amendments reduce the forms of untaxed income and excludable income that are The FSA amendments reduce the forms of untaxed income and excludable income that are
considered in calculating the SAI.22 This has the effect of reducing the amount of financial considered in calculating the SAI.22 This has the effect of reducing the amount of financial
information that a student must provide when completing the FAFSA and reducing the number of information that a student must provide when completing the FAFSA and reducing the number of
factors in the underlying formula. Due to the multifaceted nature of many of the factors and the factors in the underlying formula. Due to the multifaceted nature of many of the factors and the

19 The construction of these provisions suggests that students who qualify for a maximum Pell Grant based on AGI will 19 The construction of these provisions suggests that students who qualify for a maximum Pell Grant based on AGI will
still have an SAI calculated under the full formula to determine if they qualify for a negative SAI. This means that these still have an SAI calculated under the full formula to determine if they qualify for a negative SAI. This means that these
students will have to provide all the information necessary to calculate their SAI. When the FUTURE Act is students will have to provide all the information necessary to calculate their SAI. When the FUTURE Act is
implemented, students will be able to authorize the IRS to disclose the components of the FAFSA that are based on tax implemented, students will be able to authorize the IRS to disclose the components of the FAFSA that are based on tax
information directly to ED for the purposes of completing the FAFSA. See the information directly to ED for the purposes of completing the FAFSA. See the “Integration with the FUTURE Act”
section later in this report. section later in this report.
20 HEA §479, as in effect prior to implementation of the FSA. For additional details, see EFC Formula Guide under 20 HEA §479, as in effect prior to implementation of the FSA. For additional details, see EFC Formula Guide under
“Which students qualify for the simplified EFC formulas?,” at “Which students qualify for the simplified EFC formulas?,” at
https://fsapartners.ed.gov/sites/default/files/attachments/2020-08/2122EFCFormulaGuide.pdf. https://fsapartners.ed.gov/sites/default/files/attachments/2020-08/2122EFCFormulaGuide.pdf.
21 For full details, including applicable schedules, see HEA Section 479, as amended by the FSA. 21 For full details, including applicable schedules, see HEA Section 479, as amended by the FSA.
22 In most cases, these changes are made by amending definitions of applicable terms in HEA Section 480. 22 In most cases, these changes are made by amending definitions of applicable terms in HEA Section 480.
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incremental nature of some of the changes, it is difficult to calculate exactly how many factors incremental nature of some of the changes, it is difficult to calculate exactly how many factors
were eliminated.23 were eliminated.23
Among the forms of untaxed income that will no longer be considered are “cash support or any Among the forms of untaxed income that will no longer be considered are “cash support or any
money paid on the student’s behalf.” Prior to the FSA taking effect, this form of untaxed income money paid on the student’s behalf.” Prior to the FSA taking effect, this form of untaxed income
(which excludes support from dependent students’ parents) meant that the EFC considered (which excludes support from dependent students’ parents) meant that the EFC considered
support from individuals who are not required to report information on the FAFSA, such as support from individuals who are not required to report information on the FAFSA, such as
contributions from grandparents. contributions from grandparents.
The FSA amendments eliminate “child support received” as a form of untaxed income but adds it The FSA amendments eliminate “child support received” as a form of untaxed income but adds it
as an asset.24 This means that only applicants who are not exempt from reporting assets will need as an asset.24 This means that only applicants who are not exempt from reporting assets will need
to report child support received. to report child support received.
The FSA amendments reduce the forms of excludable income that are considered in the The FSA amendments reduce the forms of excludable income that are considered in the
calculation of the SAI. Under the FSA amendments, the only forms of excludable income that are calculation of the SAI. Under the FSA amendments, the only forms of excludable income that are
required to be reported in the formula are specified federal education tax credits.25 The FSA required to be reported in the formula are specified federal education tax credits.25 The FSA
amendments also allow (but do not require) certain forms of education-related income to be amendments also allow (but do not require) certain forms of education-related income to be
reported as excludable income at the option of the applicant.26 reported as excludable income at the option of the applicant.26
Changes to the Calculation Process
Income Protection Allowance
The EFC formulas establish an The EFC formulas establish an income protection allowance (IPA) that serves as one of several (IPA) that serves as one of several
allowances that reduce the amount of income that is allowances that reduce the amount of income that is subsequently considered in the EFC calculation. The IPA considered in the EFC calculation. The IPA
can vary by dependency status, family size, and the number of family members in college. IPA can vary by dependency status, family size, and the number of family members in college. IPA
levels are adjusted each year based on inflation. levels are adjusted each year based on inflation.
~~The FSA amendments increase the IPA levels for dependent students (but not the~~Because the formula for dependent students calculates separate contributions for the student and the student’s parents and then combines them, there are separate IPAs for dependent students and parents of parents of
~~dependent students) as well as independent students~~dependent students. The FSA amendments increase IPA levels. These increases effectively protect a larger . These increases effectively protect a larger
amount of amount of ~~student~~ income, reducing the amount of income, reducing the amount of ~~student~~ income that is considered in income that is considered in
calculating the SAI.calculating the SAI.
~~The IPA levels that are changed by the~~ The FSA FSA amendments also streamline IPAs across dependency statuses so they will no longer vary by the number of family members in college. For dependent students, the FSA amendments increase the IPA levels for the parents of dependent students approximately 20% above their current levels for families with one student in college.27~~amendments are increased approximately 35% above~~
~~their current levels and will subsequently be adjusted for inflation prior to implementation. For~~
~~example, the IPA for a single independent student in the 2021-2022 award year is $10,840.27 The~~
~~FSA amendments establish an increased level of $14,630 for a single independent student and~~

23 For example, the FSA amendments eliminates HEA Section 480(b), which includes a provision for “any other 23 For example, the FSA amendments eliminates HEA Section 480(b), which includes a provision for “any other
untaxed income and benefits” that provides four examples of income that could be considered under this provision and untaxed income and benefits” that provides four examples of income that could be considered under this provision and
then explicitly excludes six other forms of untaxed income. Another example of complexity is that the HEA prior to the then explicitly excludes six other forms of untaxed income. Another example of complexity is that the HEA prior to the
enactment of the FSA amendments included tax-deferred contributions to retirement accounts as untaxed income and enactment of the FSA amendments included tax-deferred contributions to retirement accounts as untaxed income and
the FSA amendments retain some, but not all, of these contributions as untaxed income. the FSA amendments retain some, but not all, of these contributions as untaxed income.
24 See the definition of 24 See the definition of assets in HEA Section 480(f) as amended by the FSA. in HEA Section 480(f) as amended by the FSA.
25 Specifically, the sum of the American Opportunity Tax Credit and the Lifelong Learning Credit as described in 25 Specifically, the sum of the American Opportunity Tax Credit and the Lifelong Learning Credit as described in
paragraphs (1) and (2) of Section 25A of the Internal Revenue Code. Considering amounts of these credits as paragraphs (1) and (2) of Section 25A of the Internal Revenue Code. Considering amounts of these credits as
excludable income offsets any reduction in tax liability and corresponding reduction in allowances against income for excludable income offsets any reduction in tax liability and corresponding reduction in allowances against income for
federal taxes paid. federal taxes paid.
26 HEA §480(e)(2), as amended by the FSA. Because excludable income reduces available income, reporting this 26 HEA §480(e)(2), as amended by the FSA. Because excludable income reduces available income, reporting this
information, if applicable, will reduce a student’s SAI. information, if applicable, will reduce a student’s SAI.
27 27 ~~EFC Formula Guide for 2021-22, Formula B, at https://fsapartners.ed.gov/sites/default/files/attachments/2020-~~
~~08/2122EFCFormulaGuide.pdf.~~
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~~further specifies that this amount will be adjusted for inflation between April 2020 and the April~~
~~in the year prior to the award year.28~~
~~The FSA amendments also streamline IPAs across dependency statuses so they will no longer~~
~~vary by the number of family members in college.~~The increase in IPA level for parents of dependent students with more than one family member in college is a little more difficult to characterize in a concise manner, but it will effectively be greater than 20%. For current levels, see Congressional Research Service 6 The FAFSA Simplification Act For dependent students themselves, the FSA amendments increase the IPA levels about 35% above their current levels. For independent students without dependents, the FSA increases the IPA levels about 35% above their current levels. For independent students with dependents, the FSA amendments establish separate IPA levels for married and single students. For married independent students with dependents, the FSA amendments establish the IPA levels at about 35% above their current levels for families with one member in college. For single independent students with dependents, the FSA amendments establish the IPA levels at about 60% above their current levels for families with one member in college.28 The FSA specifies that the codified IPA levels will be further adjusted for inflation between April 2020 and the April in the year prior to the award year.29
Allowance for State and Other Taxes
The EFC formulas establish an allowance for state and other taxes. Like other allowances against The EFC formulas establish an allowance for state and other taxes. Like other allowances against
income, this one reduces the amount of income that is considered in the calculation of the EFC. income, this one reduces the amount of income that is considered in the calculation of the EFC.
The allowance is calculated as a percentage of total income. The percentage varies by state, The allowance is calculated as a percentage of total income. The percentage varies by state,
ranging from 1% to 8% in the 2020-2021 award year.ranging from 1% to 8% in the 2020-2021 award year.2930
The FSA amendments eliminate the allowance for state and other taxes. The FSA amendments eliminate the allowance for state and other taxes.
Employment Expense Allowance
The EFC formulas establish an employment expense allowance for some applicants. The The EFC formulas establish an employment expense allowance for some applicants. The
maximum allowance under this provision is $4,000, which effectively reduces income considered maximum allowance under this provision is $4,000, which effectively reduces income considered
in the EFC calculation by that amount. The allowance may be applied to the income of parents of in the EFC calculation by that amount. The allowance may be applied to the income of parents of
dependent students and to independent students with dependents and married independent dependent students and to independent students with dependents and married independent
students without dependents. Unmarried independent students without dependents are ineligible students without dependents. Unmarried independent students without dependents are ineligible
for this allowance. for this allowance.
With regard to married parents of dependent students and married independent students, the With regard to married parents of dependent students and married independent students, the
allowance is only available where both spouses have earnings. Married couples of any allowance is only available where both spouses have earnings. Married couples of any
dependency status in which one spouse has no earnings do not qualify for this allowance. dependency status in which one spouse has no earnings do not qualify for this allowance.
The FSA amendments modify the allowance so that it is calculated based on total earnings The FSA amendments modify the allowance so that it is calculated based on total earnings
reported on a tax return. This construction allows married couples in which one spouse does not reported on a tax return. This construction allows married couples in which one spouse does not
have earnings to qualify for this allowance. The FSA amendments do not modify the maximum have earnings to qualify for this allowance. The FSA amendments do not modify the maximum
allowance amount or its exclusion of unmarried independent students without dependents. allowance amount or its exclusion of unmarried independent students without dependents.
~~Families with More Than One Member in College~~
~~The HEA establishes that one of the final steps of the EFC formulas is to divide the EFC by the~~
~~number of family members “who are enrolled or accepted for enrollment” in an eligible~~
~~postsecondary program.30 This policy has the effect of significantly reducing the EFC of families~~
~~in years where multiple members are simultaneously enrolled in higher education.31~~

~~28 See HEA Section 476(b), as amended by the FSA, for the modified IPA level, and~~ EFC Formula Guide for AY2021-2022 at https://fsapartners.ed.gov/sites/default/files/attachments/2020-08/2122EFCFormulaGuide.pdf. 28 The increase in IPA level for independent students with dependents and more than one family member in college is a little more difficult to characterize in a concise manner, but it will effectively be greater than 35% for married students and greater than 60% for single students. 29 See HEA Section 478(b), as amended HEA Section 478(b), as amended
by the FSA, for the adjustment process. by the FSA, for the adjustment process.
2930 Listed percentages apply to applicants with total income of $15,000 or more. See Table A1 of 2020-2021 EFC Listed percentages apply to applicants with total income of $15,000 or more. See Table A1 of 2020-2021 EFC
Formula Guide at https://ifap.ed.gov/sites/default/files/attachments/2019-Formula Guide at https://ifap.ed.gov/sites/default/files/attachments/2019-
10/10/2021EFCFormulaGuideOct2019UpdateAttach.pdf. Congressional Research Service 7 The FAFSA Simplification Act Families with More Than One Member in College The HEA establishes that one of the final steps of the EFC formulas is to divide the EFC by the number of family members “who are enrolled or accepted for enrollment” in an eligible postsecondary program.31 This policy has the effect of significantly reducing the EFC of families in years where multiple members are simultaneously enrolled in higher education.32~~2021EFCFormulaGuideOct2019UpdateAttach.pdf.~~
~~30 See HEA Section 475(b)(3) for dependent students, HEA Section 476(a)(2) for independent students without~~
~~dependents, and HEA Section 477(a)(3) for independent students with dependents. For dependent students, (1) this~~
~~policy excludes parents of the student who may be enrolled and (2) only the parental contribution is divided by the~~
~~number of enrolled family members.~~
~~31 Certain elements of the EFC formulas mean that the EFC of each member of a family with two members in college~~
~~may be slightly more or less than 50% of the EFC of a student from an identical family with one member in college.~~
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The FSA amendments eliminate the provisions that divide the expected contribution by the The FSA amendments eliminate the provisions that divide the expected contribution by the
number of family members enrolled. Under this change, each student from a family with multiple number of family members enrolled. Under this change, each student from a family with multiple
applicable members enrolled will have the same SAI as a student from an otherwise identical applicable members enrolled will have the same SAI as a student from an otherwise identical
family with only one member enrolled. family with only one member enrolled.
Codification of Income Data from the Second Preceding Year
The EFC formulas specify that the EFC calculations will consider tax information and other The EFC formulas specify that the EFC calculations will consider tax information and other
income information from “the preceding tax year.” The HEA, however, further allows that “the income information from “the preceding tax year.” The HEA, however, further allows that “the
Secretary may provide for the use of data from the second preceding tax year when and to the Secretary may provide for the use of data from the second preceding tax year when and to the
extent necessary to carry out the simplification of applications.”extent necessary to carry out the simplification of applications.”3233 ED has exercised this authority ED has exercised this authority
since the 2017-2018 award year.since the 2017-2018 award year.3334 For example, the FAFSA for the current 2021-2022 award year For example, the FAFSA for the current 2021-2022 award year
was based on information from tax year 2019. was based on information from tax year 2019.
The FSA amends the statute to specify that the relevant AGI is “adjusted gross income for the The FSA amends the statute to specify that the relevant AGI is “adjusted gross income for the
second preceding tax year.”second preceding tax year.”3435 This permanently codifies current practice. This permanently codifies current practice.
Modifications to Family Definitions in FAFSA Formulas
The details of a student’s family situation can impact a student’s aid calculation. The FSA The details of a student’s family situation can impact a student’s aid calculation. The FSA
amendments change how parental information is determined for students with divorced or amendments change how parental information is determined for students with divorced or
separated parents and modifies how a student’s family size is determined. separated parents and modifies how a student’s family size is determined.
Dependent Students with Divorced or Separated ~~Parents35~~Parents36
Until the FSA amendments takes effect, dependent students with divorced or separated parents Until the FSA amendments takes effect, dependent students with divorced or separated parents
typically report only the financial information of the parent the student lived with more frequently typically report only the financial information of the parent the student lived with more frequently
during the prior year. In cases in which the parent for whom the student reports information has during the prior year. In cases in which the parent for whom the student reports information has
remarried, the information of the stepparent is included on the FAFSA.remarried, the information of the stepparent is included on the FAFSA.36
~~Under the FSA amendments, a student with divorced or separated parents will report information~~
~~on “the parent who provides the greater portion of the student’s financial support.”37 In cases~~
~~where the relevant parent is remarried, information on the stepparent will continue to be collected~~
~~on the FAFSA. (For discussion on determining whether the relevant parent qualifies as a~~ ~~single~~
~~parent~~ ~~for Pell Grant purposes, see the “Definition of Single Parent for Pell Grant Purposes”~~
~~section.)~~

3237 31 See HEA Section 475(b)(3) for dependent students, HEA Section 476(a)(2) for independent students without dependents, and HEA Section 477(a)(3) for independent students with dependents. For dependent students, (1) this policy excludes parents of the student who may be enrolled and (2) only the parental contribution is divided by the number of enrolled family members. 32 Certain elements of the EFC formulas mean that the EFC of each member of a family with two members in college may be slightly more or less than 50% of the EFC of a student from an identical family with one member in college. 33 HEA §480(a)(1)(A)-(B), as in effect prior to implementation of the FSA amendments. HEA §480(a)(1)(A)-(B), as in effect prior to implementation of the FSA amendments.
3334 See, for example, U.S. Department of Education, “Changes Impacting the 2017-2018 FAFSA,” at See, for example, U.S. Department of Education, “Changes Impacting the 2017-2018 FAFSA,” at
https://financialaidtoolkit.ed.gov/resources/fafsa-changes-17-18-faq.pdf. https://financialaidtoolkit.ed.gov/resources/fafsa-changes-17-18-faq.pdf.
3435 For the definition of AGI as it applies to the SAI formulas, see HEA Section 480(a), as amended by the FSA. For the For the definition of AGI as it applies to the SAI formulas, see HEA Section 480(a), as amended by the FSA. For the
definition of AGI as it applies to the Pell Grant calculation, see HEA Section 401(a)(2)(A), as amended by the FSA. definition of AGI as it applies to the Pell Grant calculation, see HEA Section 401(a)(2)(A), as amended by the FSA.
3536 Generally, these provisions apply to all dependent students with parents who are not married and do not live together. Generally, these provisions apply to all dependent students with parents who are not married and do not live together.
3637 See HEA §475(f) for more detail. The EFC formulas treat unmarried parents who live together the same as married See HEA §475(f) for more detail. The EFC formulas treat unmarried parents who live together the same as married
parents. parents.
~~37 HEA §475(f), as amended by the FSA.~~
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link to page 19 The FAFSA Simplification Act Under the FSA amendments, a student with divorced or separated parents will report information on “the parent who provides the greater portion of the student’s financial support.”38 In cases where the relevant parent is remarried, information on the stepparent will continue to be collected on the FAFSA. (For discussion on determining whether the relevant parent qualifies as a single parent for Pell Grant purposes, see the “Definition of Single Parent for Pell Grant Purposes” section.) ~~The FAFSA Simplification Act~~

Determination of Family Size
Until the FSA amendments Until the FSA amendments ~~takes~~take effect, family size is determined by an HEA-specific effect, family size is determined by an HEA-specific
definition.definition.38 39 In some cases, individuals who would be considered dependents (and therefore In some cases, individuals who would be considered dependents (and therefore
included in family size) under the HEA definition may not be considered dependents under the included in family size) under the HEA definition may not be considered dependents under the
federal tax code. federal tax code.
The FSA amends the HEA so that family size can be determined based on the tax return that The FSA amends the HEA so that family size can be determined based on the tax return that
informs other components of the FAFSA (i.e., the return from the second preceding tax year). For informs other components of the FAFSA (i.e., the return from the second preceding tax year). For
dependent students, family size is determined to be the parents or parent of the student (and, if dependent students, family size is determined to be the parents or parent of the student (and, if
applicable, stepparent) who reports information on the FAFSA as well as any dependent of the applicable, stepparent) who reports information on the FAFSA as well as any dependent of the
student’s parents for the taxable year used in determining aid eligibility.student’s parents for the taxable year used in determining aid eligibility.3940 In cases where the In cases where the
dependent student is not included on the applicable parental tax return, the family size includes dependent student is not included on the applicable parental tax return, the family size includes
the dependent student as well as any persons included on the applicable parental tax return. For the dependent student as well as any persons included on the applicable parental tax return. For
independent students, family size includes the student and, if applicable, the student’s spouse and independent students, family size includes the student and, if applicable, the student’s spouse and
dependents on the student’s tax return for the taxable year used in determining aid eligibility. dependents on the student’s tax return for the taxable year used in determining aid eligibility.
The FSA amendments further direct ED to establish procedures for determining family size in The FSA amendments further direct ED to establish procedures for determining family size in
cases in which “information for the taxable year used in determining the amount of need of the 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 student for financial assistance under this title has changed or does not accurately reflect the
applicant’s current household size.”applicant’s current household size.”4041
Student Race and Ethnicity
The FAFSA does not currently collect information on race/ethnicity. As such, administrative data The FAFSA does not currently collect information on race/ethnicity. As such, administrative data
based on the FAFSA cannot be disaggregated by race. based on the FAFSA cannot be disaggregated by race.
The FSA amendments require ED to collect race/ethnicity data from all FAFSA applicants for The FSA amendments require ED to collect race/ethnicity data from all FAFSA applicants for
such applicants to be eligible for HEA Title IV aid.such applicants to be eligible for HEA Title IV aid.4142
Integration with the FUTURE Act
Enacted in December 2019, the Fostering Undergraduate Talent by Unlocking Resources for Enacted in December 2019, the Fostering Undergraduate Talent by Unlocking Resources for
Education Act (FUTURE Act, P.L. 116-91) amended the HEA and the Internal Revenue Code Education Act (FUTURE Act, P.L. 116-91) amended the HEA and the Internal Revenue Code
(IRC) to specify a process through which tax filers may provide authorization to the IRS to (IRC) to specify a process through which tax filers may provide authorization to the IRS to
disclose specified information from tax returns for the purposes of completing the FAFSA and disclose specified information from tax returns for the purposes of completing the FAFSA and
~~other authorized purposes.42 The data disclosure provisions of the FUTURE Act have not yet been~~
~~implemented.43~~

~~38 HEA §480(l).~~
39 38 HEA §475(f), as amended by the FSA. 39 HEA §480(l). 40 For the purposes of family size, the FSA amendments define dependent as “within the meaning of section 152 of the For the purposes of family size, the FSA amendments define dependent as “within the meaning of section 152 of the
Internal Revenue Code of 1986 or an eligible individual for purposes of the credit under section 24 of the Internal Internal Revenue Code of 1986 or an eligible individual for purposes of the credit under section 24 of the Internal
Revenue Code of 1986.” Section 24 authorizes the Child Tax Credit. For more information, see CRS Report R41873, Revenue Code of 1986.” Section 24 authorizes the Child Tax Credit. For more information, see CRS Report R41873,
The Child Tax Credit: How It Works and Who Receives It. .
4041 HEA §480(k)(3), as amended by the FSA. HEA §480(k)(3), as amended by the FSA.
4142 HEA §483(a)(2)(B)(ii)(VIII), as amended by the FSA. Congressional Research Service 9 The FAFSA Simplification Act other authorized purposes.43 The data disclosure provisions of the FUTURE Act have not yet been implemented.44 ~~HEA §483(a)(2)(B)(ii)(VIII), as amended by the FSA.~~
~~42 For more information on the FUTURE Act, see CRS Report R46400,~~ ~~The FUTURE Act (P.L. 116-91): Amendments~~
~~to the Higher Education Act and Internal Revenue Code. Provisions in Section 284 of P.L. 116-260 that are not part of~~
~~the FAFSA Simplification Act modify certain protections for taxpayer return information and relate to FUTURE Act~~
~~provisions in the IRC and HEA.~~
~~43 In September 2020, ED expressed an objective to implement the FAFSA-related provisions of the FUTURE Act with~~
~~the 2023-2024 FAFSA form. See Federal Student Aid, “Data Sharing for a Better Customer Experience,” September~~
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The FSA amendments update the data-sharing in the FUTURE Act by specifying that the FAFSA The FSA amendments update the data-sharing in the FUTURE Act by specifying that the FAFSA
will require students (and, if necessary, the parents, stepparents, or spouses of students) to grant will require students (and, if necessary, the parents, stepparents, or spouses of students) to grant
authorization to have their tax information disclosed to ED, state higher educational agencies, authorization to have their tax information disclosed to ED, state higher educational agencies,
institutions selected by the students, and designated scholarship organizations.institutions selected by the students, and designated scholarship organizations.4445
Many of the changes to the financial factors and procedures used to calculate the SAI in the FSA Many of the changes to the financial factors and procedures used to calculate the SAI in the FSA
amendments may have been designed to optimize interaction with the FUTURE Act. For amendments may have been designed to optimize interaction with the FUTURE Act. For
example, most of the forms of untaxed income and excludable income that were eliminated were example, most of the forms of untaxed income and excludable income that were eliminated were
factors that could not be imported from a tax return. Other procedures, such as determining factors that could not be imported from a tax return. Other procedures, such as determining
family size and determining if an applicant is exempt from reporting assets based on tax family size and determining if an applicant is exempt from reporting assets based on tax
schedules, have been designed so that determinations and calculations can be made largely (or schedules, have been designed so that determinations and calculations can be made largely (or
even entirely) on the basis of shared tax information, minimizing the need to request information even entirely) on the basis of shared tax information, minimizing the need to request information
from applicants. from applicants.
Professional Judgement for Students with Special or
Unusual Circumstances
Until the FSA amendments take effect, financial aid administrators (FAAs) are authorized to Until the FSA amendments take effect, financial aid administrators (FAAs) are authorized to
“make adjustments on a case-by-case basis” to COA and values of data items used to calculate the “make adjustments on a case-by-case basis” to COA and values of data items used to calculate the
EFC. This process is known as professional judgment (PJ). The statute includes a EFC. This process is known as professional judgment (PJ). The statute includes a ~~non-~~
~~comprehensive~~noncomprehensive list of examples of special circumstances, including “recent unemployment of list of examples of special circumstances, including “recent unemployment of a a
family member or an independent student.”family member or an independent student.”4546 FAAs are also authorized to adjust dependency FAAs are also authorized to adjust dependency
status (i.e., change status from dependent to independent) for students with unusual circumstances status (i.e., change status from dependent to independent) for students with unusual circumstances
who do not meet any of the statutory independent student criteria.who do not meet any of the statutory independent student criteria.4647 Current law does not define Current law does not define
unusual circumstances. ED provides guidance to FAAs on the use of PJ.. ED provides guidance to FAAs on the use of PJ.4748
Under current practice, such adjustments are generally provided only to students who proactively Under current practice, such adjustments are generally provided only to students who proactively
appeal to the school’s FAA, and schools do not have a defined responsibility to notify students appeal to the school’s FAA, and schools do not have a defined responsibility to notify students
that PJ is available. The FSA amendments require that IHEs publicly disclose that students that PJ is available. The FSA amendments require that IHEs publicly disclose that students
~~applying for aid have the opportunity to pursue adjustments based on their family and financial~~
~~circumstances.48~~
~~Adjustments to Financial Factors~~
~~The FSA amendments establish separate lists of sample circumstances related to PJ adjustments~~
~~that may be made related to (1) Pell Grant eligibility and (2) COA or data used to calculate the~~

43 For more information on the FUTURE Act, see CRS Report R46400, The FUTURE Act (P.L. 116-91): Amendments to the Higher Education Act and Internal Revenue Code. Provisions in Section 284 of P.L. 116-260 that are not part of the FAFSA Simplification Act modify certain protections for taxpayer return information and relate to FUTURE Act provisions in the IRC and HEA. 44 In September 2020, ED expressed an objective to implement the FAFSA-related provisions of the FUTURE Act with the 2023-2024 FAFSA form. See Federal Student Aid, “Data Sharing for a Better Customer Experience,” September 22, 2020, at https://studentaid.gov/sites/default/files/future-act-fact-sheet.pdf. ED has not yet specified if this timeline 22, 2020, at https://studentaid.gov/sites/default/files/future-act-fact-sheet.pdf. ED has not yet specified if this timeline
will be altered to align with the phased implementation of the FSA amendments extending to the 2024-2025 award will be altered to align with the phased implementation of the FSA amendments extending to the 2024-2025 award
year. See U.S. Department of Education, “Beginning Phased Implementation of the FAFSA Simplification Act,” June year. See U.S. Department of Education, “Beginning Phased Implementation of the FAFSA Simplification Act,” June
11, 2021, GEN-21-39, at https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-06-11, 2021, GEN-21-39, at https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-06-
11/beginning-phased-implementation-fafsa-simplification-act-ea-id-general-21-39. 11/beginning-phased-implementation-fafsa-simplification-act-ea-id-general-21-39.
4445 HEA §483(a)(2)(D)(i), as amended by the FSA. HEA §483(a)(2)(D)(i), as amended by the FSA.
4546 HEA §479A. HEA §479A.
4647 In the FSA amendments, In the FSA amendments, special circumstances typically refer to those related to the adjustment of financial factors typically refer to those related to the adjustment of financial factors
while while unusual circumstances refer to the circumstances established in HEA Section 480(d)(9) as potentially qualifying refer to the circumstances established in HEA Section 480(d)(9) as potentially qualifying
a student for an adjustment of dependency status. a student for an adjustment of dependency status.
4748 For example, see the “Special Cases” chapter ED’s Student Aid Handbook for award year 2021-2022, available at For example, see the “Special Cases” chapter ED’s Student Aid Handbook for award year 2021-2022, available at
https://fsapartners.ed.gov/sites/default/files/2021-03/2122FSAHbkAVGCh5.pdf. https://fsapartners.ed.gov/sites/default/files/2021-03/2122FSAHbkAVGCh5.pdf.
~~48 HEA §479A(a)(5), as amended by the FSA.~~
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applying for aid have the opportunity to pursue adjustments based on their family and financial circumstances.49 Adjustments to Financial Factors The FSA amendments establish separate lists of sample circumstances related to PJ adjustments that may be made related to (1) Pell Grant eligibility and (2) COA or data used to calculate the SAI. Both the Pell Grant and COA/SAI lists allow for “changes or adjustments in the income, SAI. Both the Pell Grant and COA/SAI lists allow for “changes or adjustments in the income,
assets, or size of a family, or a student’s dependency status” to inform PJ.assets, or size of a family, or a student’s dependency status” to inform PJ.4950
The sample circumstances related to adjustments to the COA or SAI factors are somewhat The sample circumstances related to adjustments to the COA or SAI factors are somewhat
broader than those related to Pell Grant eligibility. For example, the COA/SAI provisions specify broader than those related to Pell Grant eligibility. For example, the COA/SAI provisions specify
medical expenses and additional family members enrolled in higher education as potential special medical expenses and additional family members enrolled in higher education as potential special
circumstances while the Pell Grant provisions do not include them. Notably, adjustments to COA circumstances while the Pell Grant provisions do not include them. Notably, adjustments to COA
and SAI may affect Pell Grant eligibility. and SAI may affect Pell Grant eligibility.
Dependency Overrides
The FSA amendments provide detail on how schools will make PJ determinations for students The FSA amendments provide detail on how schools will make PJ determinations for students
with unusual circumstances that prevent the students from providing parental information on the with unusual circumstances that prevent the students from providing parental information on the
FAFSA. The FSA amendments define FAFSA. The FSA amendments define unusual circumstances as those “in which the student is as those “in which the student is
unable to contact a parent or where contact with parents poses a risk to such student,” including unable to contact a parent or where contact with parents poses a risk to such student,” including
circumstances of circumstances of
 human trafficking,  human trafficking,
 legally granted refugee or asylum status,  legally granted refugee or asylum status,
 parental abandonment or estrangement, or  parental abandonment or estrangement, or
 student or parental incarceration. student or parental incarceration.5051
Provisional Independent Student
Until the FSA amendments take effect, a student who does not meet any of the independent Until the FSA amendments take effect, a student who does not meet any of the independent
student criteria but is unable to provide parental information must submit an incomplete FAFSA. student criteria but is unable to provide parental information must submit an incomplete FAFSA.
The incomplete FAFSA will not be processed, and an EFC will not be calculated. The student The incomplete FAFSA will not be processed, and an EFC will not be calculated. The student
must then contact the financial aid office at his or her institution. Depending on the circumstances must then contact the financial aid office at his or her institution. Depending on the circumstances
and documentation, the institution may be able to provide a dependency override and change the and documentation, the institution may be able to provide a dependency override and change the
student’s dependency status to independent.student’s dependency status to independent.5152
The FSA amendments allow students who may qualify for an adjustment of dependency status The FSA amendments allow students who may qualify for an adjustment of dependency status
based on unusual circumstances to identify as a based on unusual circumstances to identify as a provisional independent student when filing the when filing the
FAFSA. This would allow the student’s FAFSA to be fully processed without parental FAFSA. This would allow the student’s FAFSA to be fully processed without parental
information. An FAA must then notify the student of the institutional process, requirements, and information. An FAA must then notify the student of the institutional process, requirements, and
~~timeline for an adjustment of dependency status. The FAA will then make a determination after~~
~~all requested documentation has been provided following the PJ process specified in the statute.52~~
~~Professional Judgement During a Disaster, Emergency, or~~
~~Economic Downturn~~
~~Until the FSA amendments take effect, the HEA statute does not provide different treatment of PJ~~
~~during periods of disaster, emergency, or economic downturn. In some cases, ED has provided~~

49 49 HEA §479A(a)(5), as amended by the FSA. 50 HEA §479A(b)(1) and (2), as amended by the FSA. HEA §479A(b)(1) and (2), as amended by the FSA.
5051 HEA §480(d)(9), as amended by the FSA. HEA §480(d)(9), as amended by the FSA.
5152 For more details on procedures for students who are unable to provide parental information and associated For more details on procedures for students who are unable to provide parental information and associated
procedures, see procedures, see Federal Student Aid Handbook, Chapter 5, at https://fsapartners.ed.gov/sites/default/files/2021-, Chapter 5, at https://fsapartners.ed.gov/sites/default/files/2021-
03/2122FSAHbkAVGCh5.pdf. 03/2122FSAHbkAVGCh5.pdf.
~~52 HEA §479A(c)(2), as amended by the FSA.~~
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timeline for an adjustment of dependency status. The FAA will then make a determination after all requested documentation has been provided following the PJ process specified in the statute.53 Professional Judgement During a Disaster, Emergency, or Economic Downturn Until the FSA amendments take effect, the HEA statute does not provide different treatment of PJ during periods of disaster, emergency, or economic downturn. In some cases, ED has provided guidance related to PJ during such periods. Such guidance has, for example, established specific guidance related to PJ during such periods. Such guidance has, for example, established specific
treatment for students (or relevant family members) who demonstrated job loss based on receipt treatment for students (or relevant family members) who demonstrated job loss based on receipt
of unemployment benefits.of unemployment benefits.5354
Outside of the HEA, some nonregulatory guidance and statutory provisions are intended to Outside of the HEA, some nonregulatory guidance and statutory provisions are intended to
support HEA Title IV aid recipients and their families affected by a disaster or national support HEA Title IV aid recipients and their families affected by a disaster or national
emergency. Guidance encourages FAAs to use PJ to reflect more accurately the financial need of emergency. Guidance encourages FAAs to use PJ to reflect more accurately the financial need of
students and families affected by a federally declared disaster area as defined in the Stafford students and families affected by a federally declared disaster area as defined in the Stafford
Act.Act.5455 The Higher Education Relief Opportunities for Students Act (HEROES Act; P.L. 107-122, The Higher Education Relief Opportunities for Students Act (HEROES Act; P.L. 107-122,
as amended) provides the Secretary with authority to waive or modify statutory and regulatory as amended) provides the Secretary with authority to waive or modify statutory and regulatory
requirements that apply to the HEA Title IV student aid programs in an effort to help affected requirements that apply to the HEA Title IV student aid programs in an effort to help affected
individuals in connection with a war or other military action or a national emergency declared by individuals in connection with a war or other military action or a national emergency declared by
the President.the President.5556 Under the HEROES Act, for example, the Secretary may except FAAs exercising Under the HEROES Act, for example, the Secretary may except FAAs exercising
PJ on a case-by-case basis to adjust COA or the values of items used in calculating EFC from the PJ on a case-by-case basis to adjust COA or the values of items used in calculating EFC from the
requirement of making such adjustments. requirement of making such adjustments.
The FSA amends the HEA to establish that, during specified periods, FAAs may make certain The FSA amends the HEA to establish that, during specified periods, FAAs may make certain
adjustments to an applicant’s income from work if the applicant provides documentation of adjustments to an applicant’s income from work if the applicant provides documentation of
unemployment benefits.unemployment benefits.5657 The FSA further amends the HEA to specify that ED shall make The FSA further amends the HEA to specify that ED shall make
adjustments to the model used to select institutions for program reviews to account for any adjustments to the model used to select institutions for program reviews to account for any
increase in the use of PJ during the specified periods.increase in the use of PJ during the specified periods.5758
Pell Grant Provisions
The federal Pell Grant program (HEA Title IV-A-1) is the single largest source of federal grant The federal Pell Grant program (HEA Title IV-A-1) is the single largest source of federal grant
aid supporting postsecondary education students.aid supporting postsecondary education students.5859 Pell Grants are a type of need-based aid that is 53 HEA §479A(c)(2), as amended by the FSA. 54 ~~Pell Grants are need-based aid that is awarded~~
~~on a stair-step scale and intended to be the foundation for all need-based federal student aid~~
~~awarded to undergraduates. The FSA amendments modify Pell Grant award rules and additional~~
~~Pell Grant provisions related to incarcerated students, year-round (summer) Pell Grants,~~
~~eligibility restoration, and the program’s authority.~~

53 For example, see Dear Colleague Letter GEN-09-04, “Use of ‘Professional Judgement’ by Financial Aid For example, see Dear Colleague Letter GEN-09-04, “Use of ‘Professional Judgement’ by Financial Aid
Administrators,’ April 2, 2009, archived at https://ifap.ed.gov/dear-colleague-letters/04-02-2009-gen-09-04-subject-Administrators,’ April 2, 2009, archived at https://ifap.ed.gov/dear-colleague-letters/04-02-2009-gen-09-04-subject-
use-professional-judgment-financial-aid. use-professional-judgment-financial-aid.
5455 U.S. Department of Education, U.S. Department of Education, "“Non-Regulatory Guidance on Flexibility and Waivers for Grantees and Program Non-Regulatory Guidance on Flexibility and Waivers for Grantees and Program
Participants Impacted by Federally Declared Disasters,Participants Impacted by Federally Declared Disasters,"” September 2017, at September 2017, at
https://www2.ed.gov/policy/gen/guid/disasters/disaster-guidance.docx. https://www2.ed.gov/policy/gen/guid/disasters/disaster-guidance.docx.
5556 For more information about the HEROES Act, see CRS Report R42881, For more information about the HEROES Act, see CRS Report R42881, Education-Related Regulatory Flexibilities,
Waivers, and Federal Assistance in Response to Disasters and National Emergencies. .
5657 HEA §479A(f), as amended by the FSA. Specified periods include (1) an event for which the President declared a HEA §479A(f), as amended by the FSA. Specified periods include (1) an event for which the President declared a
major disaster or an emergency under Sections 401 or 501, respectively, of the Robert T. Stafford Disaster Relief and major disaster or an emergency under Sections 401 or 501, respectively, of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act; (2) a national emergency related to COVID-19 declared by the President under Section 201 Emergency Assistance Act; (2) a national emergency related to COVID-19 declared by the President under Section 201
of the National Emergencies Act; or (3) a period of recession or economic downturn as determined by the Secretary of of the National Emergencies Act; or (3) a period of recession or economic downturn as determined by the Secretary of
Education, in consultation with the Secretary of Labor. Education, in consultation with the Secretary of Labor.
5758 Ibid. Ibid.
5859 For more information on the Pell Grant program, see CRS Report R45418, For more information on the Pell Grant program, see CRS Report R45418, Federal Pell Grant Program of the
Higher Education Act: Primer. .
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link to page 19 link to page 19 The FAFSA Simplification Act awarded on a stair-step scale and intended to be the foundation for all need-based federal student aid awarded to undergraduates. The FSA amendments modify Pell Grant award rules and Pell Grant provisions related to incarcerated students, year-round (summer) Pell Grants, eligibility restoration, and the program’s authority.
Modifications to Pell Grant Award Rules
In addition to using an SAI to determine Pell Grant award amounts, the FSA amendments provide In addition to using an SAI to determine Pell Grant award amounts, the FSA amendments provide
an alternative financial indicator for establishing Pell Grant award amounts—AGI. The FSA an alternative financial indicator for establishing Pell Grant award amounts—AGI. The FSA
amendments also modify the award rules for less-than-full-time enrollment and the minimum amendments also modify the award rules for less-than-full-time enrollment and the minimum
grant amount. grant amount.
Scheduled Award Prior to the FSA Amendments Taking Effect
Until the FSA amendments take effect, a student’s scheduled Pell Grant award (i.e., the maximum Until the FSA amendments take effect, a student’s scheduled Pell Grant award (i.e., the maximum
Pell Grant aid a full-time, full-academic year student can receive in an academic year) is the least Pell Grant aid a full-time, full-academic year student can receive in an academic year) is the least
of of
(total maximum Pell Grant - EFC) or (COA - EFC). (total maximum Pell Grant - EFC) or (COA - EFC).5960
The total maximum Pell Grant is the maximum amount of Pell Grant funds that any student may The total maximum Pell Grant is the maximum amount of Pell Grant funds that any student may
receive during a given academic year. In accordance with the Pell Grant award rules, full-time, receive during a given academic year. In accordance with the Pell Grant award rules, full-time,
full-year students with an EFC of $0 may be eligible for the total maximum Pell Grant ($6,495 in full-year students with an EFC of $0 may be eligible for the total maximum Pell Grant ($6,495 in
an academic year academic year within award year [AY] 2021-2022). [AY] 2021-2022).
Scheduled Award Under the FSA Amendments
The FSA amendments base the amount of the scheduled Pell Grant award on either (1) SAI or (2) The FSA amendments base the amount of the scheduled Pell Grant award on either (1) SAI or (2)
a new alternative procedure by which students qualify for maximum or minimum Pell Grant a new alternative procedure by which students qualify for maximum or minimum Pell Grant
awards based on an AGI at or below specified levels.awards based on an AGI at or below specified levels.6061 Regardless of whether the scheduled Regardless of whether the scheduled
award is based on SAI or AGI, the amount cannot exceed COA and cannot be lower than the award is based on SAI or AGI, the amount cannot exceed COA and cannot be lower than the
minimum scheduled award (seeminimum scheduled award (see ~~Figure1~~).Figure 1).
Under the FSA amendments, students with an AGI at or below a specified level, the Under the FSA amendments, students with an AGI at or below a specified level, the maximum
grant AGI threshold, qualify for a scheduled award that is equivalent to the total maximum Pell qualify for a scheduled award that is equivalent to the total maximum Pell
Grant. The maximum grant AGI thresholds, calculated as a percentage of the poverty guidelines, Grant. The maximum grant AGI thresholds, calculated as a percentage of the poverty guidelines,
are specified in the FSA amendments (seeare specified in the FSA amendments (see Figure 1).).6162 In addition, students whose families are In addition, students whose families are
not required to file a tax return qualify for a maximum Pell Grant.not required to file a tax return qualify for a maximum Pell Grant.6263 Most individuals (or couples) Most individuals (or couples)
are not required to file an individual federal income tax return if their gross income is below are not required to file an individual federal income tax return if their gross income is below
established levels that depend on filing status and age. For students who qualify for the maximum established levels that depend on filing status and age. For students who qualify for the maximum
Pell Grant based on AGI or not needing to file a federal income tax return, the FSA amendments Pell Grant based on AGI or not needing to file a federal income tax return, the FSA amendments
modify their SAI such that they may be eligible for higher amounts of other HEA Title IV aid. modify their SAI such that they may be eligible for higher amounts of other HEA Title IV aid.
~~The FSA amendments also establish minimum grant AGI thresholds such that students with an~~
~~AGI at or below the specified levels qualify for at least the minimum Pell Grant award. Students~~
~~with an AGI above the maximum grant AGI threshold but below the minimum grant AGI~~
~~threshold qualify for a scheduled award that is equal to the greater of (1) the minimum Pell Grant~~
~~or (2) (total maximum Pell Grant - SAI), capped at the total maximum Pell Grant level.63~~

59 60 HEA §§401(b)(2)(A) and (b)(3), as in effect prior to implementation of the FSA amendments. HEA §§401(b)(2)(A) and (b)(3), as in effect prior to implementation of the FSA amendments.
6061 For Pell Grant purposes, AGI is the AGI of the parent(s) of a dependent student or the AGI of the independent For Pell Grant purposes, AGI is the AGI of the parent(s) of a dependent student or the AGI of the independent
student and spouse, if applicable. student and spouse, if applicable.
6162 The poverty guidelines are updated periodically in the Federal Register by the Department of Health and Human The poverty guidelines are 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)) 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. applicable to the student’s family size and applicable to the second tax year preceding the academic year.
6263 HEA §401(b)(1)(A)(i), as amended by the FSA. HEA §401(b)(1)(A)(i), as amended by the FSA.
~~63 HEA §401(b)(1)(A)-(C), as amended by the FSA. The FSA amendments require that the calculated award be~~
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Congressional Research Service 13 link to page 19 link to page 12 The FAFSA Simplification Act The FSA amendments also establish minimum grant AGI thresholds such that students with an AGI at or below the specified levels qualify for at least the minimum Pell Grant award. Students with an AGI above the maximum grant AGI threshold but below the minimum grant AGI threshold qualify for a scheduled award that is equal to the greater of (1) the minimum Pell Grant or (2) (total maximum Pell Grant - SAI), capped at the total maximum Pell Grant level.64 Students whose AGI exceeds the minimum grant AGI threshold may still qualify for a grant equal Students whose AGI exceeds the minimum grant AGI threshold may still qualify for a grant equal
to (total maximum Pell Grant - SAI), capped at the total maximum Pell Grant level, provided that to (total maximum Pell Grant - SAI), capped at the total maximum Pell Grant level, provided that
their SAI is equal to or less than 90% of the total maximum Pell Grant.their SAI is equal to or less than 90% of the total maximum Pell Grant.6465
This combination of rules means that a student does not qualify for a Pell Grant if the student has This combination of rules means that a student does not qualify for a Pell Grant if the student has
both (1) an AGI above the minimum grant threshold and (2) an SAI of more than 90% of the both (1) an AGI above the minimum grant threshold and (2) an SAI of more than 90% of the
maximum Pell Grant. maximum Pell Grant.
The maximum and minimum AGI grant thresholds are specified in the statute and vary by The maximum and minimum AGI grant thresholds are specified in the statute and vary by
dependency status and single parent status.dependency status and single parent status.6566 (See (See Figure 1.) For example, students from families .) For example, students from families
with single parents, including students who are single parents, may qualify for a maximum Pell with single parents, including students who are single parents, may qualify for a maximum Pell
Grant if their AGI in the reference year is less than or equal to 225% of the federal poverty Grant if their AGI in the reference year is less than or equal to 225% of the federal poverty
guidelines ($48,870 for a family of three in calendar year 2020).guidelines ($48,870 for a family of three in calendar year 2020).6667 Students not from ~~Students from families that do~~
~~not have a single parent~~ single parent families (including independent students without dependents) may qualify for a (including independent students without dependents) may qualify for a
maximum Pell Grant if their AGI is less than or equal to 175% of the federal poverty guidelines maximum Pell Grant if their AGI is less than or equal to 175% of the federal poverty guidelines
($38,010 for a family of three in 2020). ($38,010 for a family of three in 2020).

~~rounded to the nearest $5.~~
64 64 HEA §401(b)(1)(A)-(C), as amended by the FSA. The FSA amendments require that the calculated award be rounded to the nearest $5. 65 HEA §401(b)(1)(A)-(C), as amended by the FSA. HEA §401(b)(1)(A)-(C), as amended by the FSA.
6566 Dependency statuses are discussed in the previous subsection and the definitions for single parents are described in Dependency statuses are discussed in the previous subsection and the definitions for single parents are described in
the next subsection. the next subsection.
6667 A single parent is a parent of a dependent student or an independent student who is a parent if such parents were A single parent is a parent of a dependent student or an independent student who is a parent if such parents were
either a head of household, a surviving spouse, or an eligible individual for the earned income tax credit, as defined in either a head of household, a surviving spouse, or an eligible individual for the earned income tax credit, as defined in
the Internal Revenue Code. The reference year is the “second tax year preceding the academic year,” see HEA the Internal Revenue Code. The reference year is the “second tax year preceding the academic year,” see HEA
§401(a)(2)(A), as amended by the FSA. This reference year aligns with the “prior-prior year” tax return information §401(a)(2)(A), as amended by the FSA. This reference year aligns with the “prior-prior year” tax return information
that is used to complete the FAFSA. See the that is used to complete the FAFSA. See the “Codification of Income Data from the Second Preceding Year” section. section.
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Figure 1. Pell Grant Thresholds for Award Amounts Under the FAFSA Simplification
Act, by Dependency and Marital Status
(AGI as a percentage of federal poverty guidelines) (AGI as a percentage of federal poverty guidelines)

Source: HEA §401(b), as amended by the FSA. HEA §401(b), as amended by the FSA.
Notes: AGI AGI is adjusted gross income. SAIis adjusted gross income. SAI is Student Aid Index. Pell Grant award cannot exceed cost of is Student Aid Index. Pell Grant award cannot exceed cost of
attendance (COA). Adjusted gross income thresholds, as a percentage of poverty, are established by the FSA attendance (COA). Adjusted gross income thresholds, as a percentage of poverty, are established by the FSA
amendments. Upper thresholds are inclusive of the lower category. For example, a dependent student who has a amendments. Upper thresholds are inclusive of the lower category. For example, a dependent student who has a
single parent who has an AGI that is 225% of poverty may qualify for the maximum Pell Grant award. single parent who has an AGI that is 225% of poverty may qualify for the maximum Pell Grant award.

The FSA amendments establish specified instances in which AGI may be adjusted for purposes of The FSA amendments establish specified instances in which AGI may be adjusted for purposes of
awarding Pell Grants. In limited circumstances, AGI may be reduced by grant aid, scholarship awarding Pell Grants. In limited circumstances, AGI may be reduced by grant aid, scholarship
aid, and Work Study earnings.aid, and Work Study earnings.6768 Also in limited circumstances, AGI may be increased to take into Also in limited circumstances, AGI may be increased to take into
consideration foreign income.consideration foreign income.6869
Definition of Single Parent for Pell Grant Purposes
The FSA amendments define a The FSA amendments define a single parent6970 as an individual who was (as defined by the as an individual who was (as defined by the
relevant sections of the Internal Revenue Code)relevant sections of the Internal Revenue Code):
 a head of household,  a head of household,7071

6768 HEA §401(b)(1)(E), as amended by the FSA. Grant aid and scholarships are included in gross income if they are HEA §401(b)(1)(E), as amended by the FSA. Grant aid and scholarships are included in gross income if they are
used to pursue used to pursue ~~non-degree~~nondegree programs or if they are used for purposes other than tuition and fees while pursuing degree programs or if they are used for purposes other than tuition and fees while pursuing degree
programs. Work Study earnings are generally included in gross income. The FSA amendments preclude ED from programs. Work Study earnings are generally included in gross income. The FSA amendments preclude ED from
adding a FAFSA question to collect information on the amount of Work Study earnings. For more information about adding a FAFSA question to collect information on the amount of Work Study earnings. For more information about
Federal Work Study, see CRS Report RL31618, Federal Work Study, see CRS Report RL31618, Campus-Based Student Financial Aid Programs Under the Higher
Education Act. .
6869 See the See the “Professional Judgement for Students with Special or Unusual Circumstances” section and HEA section and HEA
§§401(b)(1)(D) and 479A(b)(1)(B)(v), as amended by the FSA. §§401(b)(1)(D) and 479A(b)(1)(B)(v), as amended by the FSA.
6970 HEA §401(a)(2)(D), as amended by the FSA. HEA §401(a)(2)(D), as amended by the FSA.
7071 As defined in Section 2(b) of the Internal Revenue Code. As defined in Section 2(b) of the Internal Revenue Code.
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 a surviving spouse,  a surviving spouse,7172 or or
 an eligible individual for purposes of the Earned Income Tax Credit. an eligible individual for purposes of the Earned Income Tax Credit.7273
The term The term single parent applies only to a parent of a dependent student or an independent student applies only to a parent of a dependent student or an independent student
who is a parent. who is a parent.
Notably, the construction of the single parent definition for the purposes of determining Pell Notably, the construction of the single parent definition for the purposes of determining Pell
Grant awards under the AGI provisions is not precisely aligned with the criteria for which parents Grant awards under the AGI provisions is not precisely aligned with the criteria for which parents
must provide information when completing the FAFSA to calculate the SAI. (See the must provide information when completing the FAFSA to calculate the SAI. (See the “Dependent
Students with Divorced or Separated Parents” section.) section.)
Award Calculation for Less Than Full-Time Students
Under current law, scheduled Pell Grant awards are reduced when a student is not full-time. Under current law, scheduled Pell Grant awards are reduced when a student is not full-time.7374 The The
HEA requires that ED publish a schedule of reductions. ED publishes three less than full-time HEA requires that ED publish a schedule of reductions. ED publishes three less than full-time
enrollment schedules: (1) less than full-time but at least three-quarter-time, (2) less than three-enrollment schedules: (1) less than full-time but at least three-quarter-time, (2) less than three-
quarter-time but at least half-time, and (3) less than half-time enrollment. Consequently, students quarter-time but at least half-time, and (3) less than half-time enrollment. Consequently, students
enrolled less than full-time but at least three-quarter-time (e.g., 9, 10, or 11 credits if full-time is enrolled less than full-time but at least three-quarter-time (e.g., 9, 10, or 11 credits if full-time is
12 credits) with a similar EFC and COA qualify for the same annual Pell Grant award. 12 credits) with a similar EFC and COA qualify for the same annual Pell Grant award.
The FSA amendments retain the practice of reducing awards for less than full-time students but The FSA amendments retain the practice of reducing awards for less than full-time students but
changes the methodology.changes the methodology.7475 The FSA amendments require that awards be reduced in direct The FSA amendments require that awards be reduced in direct
proportion to the degree to which the student is not enrolled full-time, rounded to the nearest proportion to the degree to which the student is not enrolled full-time, rounded to the nearest
whole percentage point. ED is still required to publish a schedule of reductions. Assuming full-whole percentage point. ED is still required to publish a schedule of reductions. Assuming full-
time is 12 credits and COA, AGI, and SAI do not limit the award, a student enrolled in 11 credits, time is 12 credits and COA, AGI, and SAI do not limit the award, a student enrolled in 11 credits,
for example, could potentially receive 92% of the total maximum Pell Grant award, whereas a for example, could potentially receive 92% of the total maximum Pell Grant award, whereas a
student enrolled in 10 credits could potentially receive 83% of the total maximum Pell Grant student enrolled in 10 credits could potentially receive 83% of the total maximum Pell Grant
award. award.
Expansion of Minimum Federal Pell Grant Award for Less Than Full-Time
Students
Until the FSA amendments take effect, the minimum award is 10% of the total maximum Until the FSA amendments take effect, the minimum award is 10% of the total maximum
award.award.7576 For AY2021-2022, the minimum Pell Grant award is $650, or 10% of $6,495. Students For AY2021-2022, the minimum Pell Grant award is $650, or 10% of $6,495. Students
with an EFC that is higher than 90% of the total maximum Pell Grant are not eligible because the with an EFC that is higher than 90% of the total maximum Pell Grant are not eligible because the
minimum Pell Grant is 10% of the total maximum award and the award cannot exceed the total minimum Pell Grant is 10% of the total maximum award and the award cannot exceed the total
maximum award less EFC.maximum award less EFC.7677 A student must be eligible for the minimum Pell Grant award after A student must be eligible for the minimum Pell Grant award after
the scheduled award is reduced for their enrollment rate. This means, for example, in AY2021-the scheduled award is reduced for their enrollment rate. This means, for example, in AY2021-
2022 a student who has an EFC of $5,845 (90% of the total maximum award) may receive the 2022 a student who has an EFC of $5,845 (90% of the total maximum award) may receive the
minimum award if enrolled full-time ($6,495 - $5,845 = $650), but becomes ineligible to receive minimum award if enrolled full-time ($6,495 - $5,845 = $650), but becomes ineligible to receive
a Pell Grant if enrolled half-time (($6,495 - $5,845)/2 = $325). a Pell Grant if enrolled half-time (($6,495 - $5,845)/2 = $325).
The FSA amendments establish the minimum award as 10% of the total maximum award, before The FSA amendments establish the minimum award as 10% of the total maximum award, before
reducing for a less than full-time enrollment rate.reducing for a less than full-time enrollment rate.7778 This means, for example, that a student who This means, for example, that a student who

7172 As defined in Section 2(a) of the Internal Revenue Code. As defined in Section 2(a) of the Internal Revenue Code.
7273 As established under Section 32 of the Internal Revenue Code. As established under Section 32 of the Internal Revenue Code.
7374 HEA §401(b)(2), as in effect prior to implementation of the FSA amendments. HEA §401(b)(2), as in effect prior to implementation of the FSA amendments.
7475 HEA §401(b)(2), as amended by the FSA. HEA §401(b)(2), as amended by the FSA.
7576 HEA §401(b)(4), as in effect prior to implementation of the FSA amendments. HEA §401(b)(4), as in effect prior to implementation of the FSA amendments.
7677 HEA §401(b)(4), as in effect prior to implementation of the FSA amendments. HEA §401(b)(4), as in effect prior to implementation of the FSA amendments.
7778 HEA §401(a)(2)(F), as amended by the FSA. HEA §401(a)(2)(F), as amended by the FSA.
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has an EFC that is 90% of the total maximum award may receive the minimum award if enrolled has an EFC that is 90% of the total maximum award may receive the minimum award if enrolled
full-time and may receive approximately half of the minimum award if enrolled half-time. full-time and may receive approximately half of the minimum award if enrolled half-time.
Pell Grants for Incarcerated Persons
Until the FSA amendments take effect, students seeking Pell Grants may not be incarcerated in a Until the FSA amendments take effect, students seeking Pell Grants may not be incarcerated in a
federal or state penal institution, and students cannot be subject to an involuntary civil federal or state penal institution, and students cannot be subject to an involuntary civil
commitment following incarceration for a sexual offense (as determined under the FBIcommitment following incarceration for a sexual offense (as determined under the FBI'’s Uniform s Uniform
Crime Reporting Program).Crime Reporting Program).7879 Students in local penal institutions and juvenile detention may be Students in local penal institutions and juvenile detention may be
eligible. eligible.
The FSA amendments eliminate the above prohibition but The FSA amendments eliminate the above prohibition but ~~requires~~require that an individual incarcerated that an individual incarcerated
in a correctional institution be enrolled in a in a correctional institution be enrolled in a prison education program to receive a Pell Grant. to receive a Pell Grant.7980
Incarcerated individuals are not, however, required to be enrolled in prison education programs to Incarcerated individuals are not, however, required to be enrolled in prison education programs to
receive other forms of HEA Title IV aid. Prison education programs must meet general HEA Title receive other forms of HEA Title IV aid. Prison education programs must meet general HEA Title
IV institutional and programmatic eligibility requirements and additional FSA-established IV institutional and programmatic eligibility requirements and additional FSA-established
requirements.requirements.8081 Some key FSA-established requirements are that Some key FSA-established requirements are that
 proprietary (private, for-profit) IHEs may not offer such programs;  proprietary (private, for-profit) IHEs may not offer such programs;
 the offering IHE must not have been subject to certain unfavorable actions by  the offering IHE must not have been subject to certain unfavorable actions by
ED, its accrediting agency, or the state within the preceding five years; ED, its accrediting agency, or the state within the preceding five years;
 the programs must “be operating in the best interest of students” as determined  the programs must “be operating in the best interest of students” as determined
by the appropriate correctional agency; by the appropriate correctional agency;
 the programs must offer credits that may be transferred to at least one IHE in the  the programs must offer credits that may be transferred to at least one IHE in the
state where the correctional facility is located, or, in the case of a federal state where the correctional facility is located, or, in the case of a federal
correctional facility, in the state in which most of the incarcerated individuals correctional facility, in the state in which most of the incarcerated individuals
will reside upon release; and will reside upon release; and
 the programs must not offer education that is designed to lead to licensure or an  the programs must not offer education that is designed to lead to licensure or an
occupation if such job or occupation typically involves prohibitions on the occupation if such job or occupation typically involves prohibitions on the
licensure or employment of formerly incarcerated individuals in the state in licensure or employment of formerly incarcerated individuals in the state in
which the correctional facility is located, or, in the case of a federal correctional which the correctional facility is located, or, in the case of a federal correctional
facility, in the state in which most of the incarcerated individuals will reside upon facility, in the state in which most of the incarcerated individuals will reside upon
release. release.
Unlike most other provisions in the law, ED may (but is not required to) implement these Unlike most other provisions in the law, ED may (but is not required to) implement these
provisions earlier than the effective date (July 1, 2023) associated with most other provisions.provisions earlier than the effective date (July 1, 2023) associated with most other provisions.8182 If If
the Secretary does so, notice must be published in the the Secretary does so, notice must be published in the Federal Register at least 60 days before at least 60 days before
implementation that delineates on what date, under what conditions, and for which award years implementation that delineates on what date, under what conditions, and for which award years
the Secretary will implement the amendments. the Secretary will implement the amendments.
In addition, ED is required to annually and publicly report on the prison education programs, Pell In addition, ED is required to annually and publicly report on the prison education programs, Pell
Grant recipients and expenditures, and academic and post-release outcomes. Grant recipients and expenditures, and academic and post-release outcomes.

7879 HEA §401(b)(6), as in effect prior to implementation of the FSA amendments. HEA §401(b)(6), as in effect prior to implementation of the FSA amendments.
7980 HEA §484(t), as amended by the FSA. HEA §484(t), as amended by the FSA.
8081 For more information on HEA Title IV institutional and programmatic eligibility requirements and additional For more information on HEA Title IV institutional and programmatic eligibility requirements and additional
requirements, see CRS Report R43159, requirements, see CRS Report R43159, Institutional Eligibility for Participation in Title IV Student Financial Aid
Programs. .
8182 FSA §702(n)(2). FSA §702(n)(2).
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Year-Round (Summer) Pell Grants
Under current law, qualified students may receive up to one-and-a-half scheduled Pell Grants, or Under current law, qualified students may receive up to one-and-a-half scheduled Pell Grants, or
up to 150% of the scheduled award, in each award year. To qualify for the additional funds, a Pell up to 150% of the scheduled award, in each award year. To qualify for the additional funds, a Pell
Grant-eligible student must be enrolled at least half-time in a payment period after receiving most Grant-eligible student must be enrolled at least half-time in a payment period after receiving most
or all of his or her scheduled award in previous payment periods during the award year.or all of his or her scheduled award in previous payment periods during the award year.8283
The FSA amendments eliminate the requirement that such students be enrolled at least half-time. The FSA amendments eliminate the requirement that such students be enrolled at least half-time.
Restoration of Pell Grant Eligibility
The HEA currently establishes a maximum cumulative lifetime eligibility cap on Pell Grant aid of The HEA currently establishes a maximum cumulative lifetime eligibility cap on Pell Grant aid of
no more than 12 full-time semesters (or the equivalent) of Pell Grant awards or six scheduled no more than 12 full-time semesters (or the equivalent) of Pell Grant awards or six scheduled
awards.awards.8384 Pell Grant lifetime eligibility used (LEU) at a closed school from which the student did Pell Grant lifetime eligibility used (LEU) at a closed school from which the student did
not graduate does not count toward the lifetime cap—the eligibility used is restored.not graduate does not count toward the lifetime cap—the eligibility used is restored.8485
The FSA amendments restore Pell Grant eligibility used during the following periods: The FSA amendments restore Pell Grant eligibility used during the following periods:8586
 a period of attendance at an IHE at which the student was unable to complete a  a period of attendance at an IHE at which the student was unable to complete a
course of study due to the closure of the institution; course of study due to the closure of the institution;
 a period of attendance at an IHE for which the student was falsely certified as  a period of attendance at an IHE for which the student was falsely certified as
eligible for HEA Title IV aid; eligible for HEA Title IV aid;
 a period for which the student received an HEA Title IV  a period for which the student received an HEA Title IV ~~loan86~~loan87 and such loan is and such loan is
discharged because the student was unable to complete a program due to the discharged because the student was unable to complete a program due to the
closure of the institution, because the student’s eligibility to borrow was falsely closure of the institution, because the student’s eligibility to borrow was falsely
certified by the institution or was falsely certified as a result of a crime of identity certified by the institution or was falsely certified as a result of a crime of identity
theft, or because the institution failed to make a refund of loan proceeds owed to theft, or because the institution failed to make a refund of loan proceeds owed to
the student’s lender;the student’s lender;8788
 a period for which the student received  a period for which the student received aan HEA Title IV loan and such loan is HEA Title IV loan and such loan is
discharged under the Secretary’s authority to “compromise, waive, or release any discharged under the Secretary’s authority to “compromise, waive, or release any
right, title, claim, lien, or demand,” under HEA Section 432(a)(6)right, title, claim, lien, or demand,” under HEA Section 432(a)(6) ~~;88~~;89 or or

8283 A payment period is the academic period or period of enrollment established by an institution for which financial aid A payment period is the academic period or period of enrollment established by an institution for which financial aid
is disbursed. Payments for all federal student aid programs except Federal Work Study must be made on a payment is disbursed. Payments for all federal student aid programs except Federal Work Study must be made on a payment
period basis. period basis.
8384 HEA §401(c)(5). For example, students who consistently enroll part-time in standard terms throughout their HEA §401(c)(5). For example, students who consistently enroll part-time in standard terms throughout their
progression to a bachelor’s degree could receive Pell Grant aid for 24 semesters, or 12 years. Students who consistently progression to a bachelor’s degree could receive Pell Grant aid for 24 semesters, or 12 years. Students who consistently
enroll full-time in standard terms throughout their progression to a bachelor’s degree could receive Pell Grant aid for 12 enroll full-time in standard terms throughout their progression to a bachelor’s degree could receive Pell Grant aid for 12
semesters, or six years. This change does not affect the measurement of full-time enrollment for the purposes of federal semesters, or six years. This change does not affect the measurement of full-time enrollment for the purposes of federal
student aid, which is currently 12 semester hours (or the equivalent for student aid, which is currently 12 semester hours (or the equivalent for ~~non-standard~~nonstandard terms). terms).
8485 HEA §437(c)(3). HEA §437(c)(3).
8586 HEA §401(d)(5), as amended by the FSA. HEA §401(d)(5), as amended by the FSA.
8687 HEA Title IV loans include those made under the Direct Loan program, the Federal Family Education Loan (FFEL) HEA Title IV loans include those made under the Direct Loan program, the Federal Family Education Loan (FFEL)
program, and the Perkins Loan program. program, and the Perkins Loan program.
8788 Neither the statute nor regulations specify the availability of Perkins Loan discharges because the student’s eligibility Neither the statute nor regulations specify the availability of Perkins Loan discharges because the student’s eligibility
to borrow was falsely certified by the institution or was falsely certified as a result of a crime of identity theft, or to borrow was falsely certified by the institution or was falsely certified as a result of a crime of identity theft, or
because the institution failed to make a refund of loan proceeds owed to the student’s lender. because the institution failed to make a refund of loan proceeds owed to the student’s lender.
8889 HEA Section 432(a)(6) seemingly applies to both the FFEL and Direct Loan programs; it does not apply to the HEA Section 432(a)(6) seemingly applies to both the FFEL and Direct Loan programs; it does not apply to the
Perkins Loan program. HEA Section 468(1) contains an identical provision for Perkins Loans. It is unclear whether Perkins Loan program. HEA Section 468(1) contains an identical provision for Perkins Loans. It is unclear whether
Pell Grant eligibility could be restored if used during a period for which the recipient received a Perkins Loan that is Pell Grant eligibility could be restored if used during a period for which the recipient received a Perkins Loan that is
discharged under the Secretary’s authority to “compromise, waive, or release any right, title, claim, lien, or demand” discharged under the Secretary’s authority to “compromise, waive, or release any right, title, claim, lien, or demand”
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 a period for which the student received  a period for which the student received aan HEA Title IV loan and such loan is HEA Title IV loan and such loan is
discharged under a borrower defense to repayment claim, discharged under a borrower defense to repayment claim,8990 including defenses including defenses
provided to any applicable groups of students.provided to any applicable groups of students.9091
Changes to Pell Grant Authorizations and Appropriations
Under current law, discretionary appropriations were authorized through FY2017, while Under current law, discretionary appropriations were authorized through FY2017, while
mandatory appropriations are permanently provided.mandatory appropriations are permanently provided.9192 The FSA amendments authorize The FSA amendments authorize
discretionary appropriations for each of FY2023 through FY2033. The FSA amendments discretionary appropriations for each of FY2023 through FY2033. The FSA amendments
maintain the permanent mandatory appropriations at the same levels. maintain the permanent mandatory appropriations at the same levels.
Changes to Policies or Procedures for Specific
Populations
A number of FSA provisions change or codify certain procedures or policies for specified A number of FSA provisions change or codify certain procedures or policies for specified
populations of students. In most cases, the policies are designed to ease access to aid by populations of students. In most cases, the policies are designed to ease access to aid by
streamlining or standardizing policies for a specified population. streamlining or standardizing policies for a specified population.
Procedures for Homeless Students and Foster Youth
Under current law, students who meet specified criteria related to homelessness or foster youth Under current law, students who meet specified criteria related to homelessness or foster youth
can qualify as independent students regardless of age and other factors.can qualify as independent students regardless of age and other factors.9293
The FSA amendments establish policies and codifies procedures through which FAAs are to The FSA amendments establish policies and codifies procedures through which FAAs are to
verify that a student meets the criteria for these statuses. verify that a student meets the criteria for these statuses.
Homeless Students and Students At Risk of Homelessness
Until the FSA amendments take effect, a student may qualify as independent if he or she is Until the FSA amendments take effect, a student may qualify as independent if he or she is
verified during the school year as unaccompanied and homeless or “unaccompanied, self-verified during the school year as unaccompanied and homeless or “unaccompanied, self-
supporting youths at risk of being homeless.”supporting youths at risk of being homeless.”9394 The statute establishes authorities that can verify The statute establishes authorities that can verify
this status, such as administrators of federal programs that serve homeless youth. this status, such as administrators of federal programs that serve homeless youth.
The FSA amendments retain the general principle of independent student status for homeless The FSA amendments retain the general principle of independent student status for homeless
students and students at risk of homelessness but provides more detail and flexibility on how this students and students at risk of homelessness but provides more detail and flexibility on how this
status can be established. The FSA amendments explicitly align the definitions of status can be established. The FSA amendments explicitly align the definitions of homeless youth
and and unaccompanied with the McKinney-Vento Homeless Assistance Act. with the McKinney-Vento Homeless Assistance Act.9495 The FSA amendments The FSA amendments
establish that if a student is unable to provide documentation of participation in a specified establish that if a student is unable to provide documentation of participation in a specified

under either of these provisions. under either of these provisions.
8990 In general, Perkins Loans are not eligible to be discharged under a borrower defense to repayment claim. For In general, Perkins Loans are not eligible to be discharged under a borrower defense to repayment claim. For
additional information, see CRS Report R44737, additional information, see CRS Report R44737, The Closure of Institutions of Higher Education: Student Options,
Borrower Relief, and Other Implications, by Alexandra Hegji. , by Alexandra Hegji.
9091 For more information on loan discharge, see the “Loan Discharge for Borrower Hardship” section in CRS Report For more information on loan discharge, see the “Loan Discharge for Borrower Hardship” section in CRS Report
R45931, R45931, Federal Student Loans Made Through the William D. Ford Federal Direct Loan Program: Terms and
Conditions for Borrowers. .
9192 Pell Grants have received annual discretionary appropriations every year despite being unauthorized appropriations. Pell Grants have received annual discretionary appropriations every year despite being unauthorized appropriations.
9293 HEA §480(d)(1)(B) and (H). HEA §480(d)(1)(B) and (H).
9394 U.S. Department of Education, U.S. Department of Education, Federal Student Aid Handbook, p. AVG-97. , p. AVG-97.
9495 42 U.S.C. §11434a. 42 U.S.C. §11434a.
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program, the student may also establish this status through a written statement or a documented program, the student may also establish this status through a written statement or a documented
interview with an FAA. The FSA amendments also permit prior determinations to be used for interview with an FAA. The FSA amendments also permit prior determinations to be used for
subsequent award years at the same institution or in the same award year at a different institution. subsequent award years at the same institution or in the same award year at a different institution.
Procedures for Foster Care Youth
Until the FSA amendments take effect, a student may qualify as independent if he or she was in Until the FSA amendments take effect, a student may qualify as independent if he or she was in
foster care at any time when aged 13 years or older. foster care at any time when aged 13 years or older.
The FSA amendments retain this criterion and establishes documentation that shall be considered The FSA amendments retain this criterion and establishes documentation that shall be considered
sufficient for establishing this status. Similar to the policy for homeless students, the FSA sufficient for establishing this status. Similar to the policy for homeless students, the FSA
amendments establish that prior determinations from the same school may be used for subsequent amendments establish that prior determinations from the same school may be used for subsequent
award years and prior determinations from different schools may be used in the same award year. award years and prior determinations from different schools may be used in the same award year.
Procedures for Veterans of the Armed Forces
Until the FSA amendments take effect, students who meet specified criteria for a Until the FSA amendments take effect, students who meet specified criteria for a veteran can can
qualify as independent students regardless of age and other factors.qualify as independent students regardless of age and other factors.9596 The definition for The definition for veteran is is
specific to the HEA; though, under current practice, ED uses data from the Department of specific to the HEA; though, under current practice, ED uses data from the Department of
Veterans Affairs (VA) to confirm that an individual is a veteran for HEA Title IV purposes. Veterans Affairs (VA) to confirm that an individual is a veteran for HEA Title IV purposes.
Differences in the definitions make the match less effective. Differences in the definitions make the match less effective.
The FSA amendments redefine The FSA amendments redefine veteran to coincide with definitions used by the VA. to coincide with definitions used by the VA.9697
Procedures for Children of Deceased Servicemembers and Public
Safety Officers
Until the FSA amendments take effect, an otherwise Pell Grant-eligible student whose parent or Until the FSA amendments take effect, an otherwise Pell Grant-eligible student whose parent or
guardian dies under specified circumstances receives a zero EFC provided the student was under guardian dies under specified circumstances receives a zero EFC provided the student was under
24 years old or was enrolled at an IHE at the time of the parent’s or guardian’s death.24 years old or was enrolled at an IHE at the time of the parent’s or guardian’s death.9798 The The
specified circumstances occur when the parent or guardian was specified circumstances occur when the parent or guardian was
 a member of the U.S. Armed Forces and died as a result of performing military  a member of the U.S. Armed Forces and died as a result of performing military
service in Iraq or Afghanistan after September 11, 2001; service in Iraq or Afghanistan after September 11, 2001;9899 or or
 actively serving as a public safety officer and died in the line of duty.  actively serving as a public safety officer and died in the line of duty.99100
The zero EFC is used to award all HEA Title IV aid. A Pell Grant so awarded to the child of a The zero EFC is used to award all HEA Title IV aid. A Pell Grant so awarded to the child of a
public safety officer is referred to as a public safety officer is referred to as a Fallen Heroes Scholarship. .

9596 HEA §480(c)(1). HEA §480(c)(1).
9697 Specifically, HEA Section 480(c), as amended by the FSA, specifies that “the term ‘veteran’ has the meaning given Specifically, HEA Section 480(c), as amended by the FSA, specifies that “the term ‘veteran’ has the meaning given
the term in section 101(2) of title 38, United States Code, and includes individuals who served in the United States the term in section 101(2) of title 38, United States Code, and includes individuals who served in the United States
Armed Forces as described in sections 101(21), 101(22), and 101(23) of title 38, United States Code.” Armed Forces as described in sections 101(21), 101(22), and 101(23) of title 38, United States Code.”
9798 HEA §473(b), as in effect prior to implementation of the FSA amendments. HEA §473(b), as in effect prior to implementation of the FSA amendments.
9899 For students who are not eligible for Pell Grants due to their EFC and had a parent or guardian die as a result of For students who are not eligible for Pell Grants due to their EFC and had a parent or guardian die as a result of
military service in Iraq or Afghanistan after September 11, 2001, non-need-based grants called Iraq and Afghanistan military service in Iraq or Afghanistan after September 11, 2001, non-need-based grants called Iraq and Afghanistan
Service Grants (IASG) are available. The amount of the IASG is the same as the Pell Grant the student would be Service Grants (IASG) are available. The amount of the IASG is the same as the Pell Grant the student would be
eligible for if he or she had a zero EFC. IASG payments are adjusted like Pell Grants for students who are enrolled less eligible for if he or she had a zero EFC. IASG payments are adjusted like Pell Grants for students who are enrolled less
than full-time, but unlike Pell Grants, these non-need-based grants do not count as estimated financial assistance. In than full-time, but unlike Pell Grants, these non-need-based grants do not count as estimated financial assistance. In
addition, IASG is subject to sequestration. addition, IASG is subject to sequestration.
99100 A A public safety officer is as defined in 42 U.S.C. §3796b or is an eligible fire police officer. HEA §473(b)(5). is as defined in 42 U.S.C. §3796b or is an eligible fire police officer. HEA §473(b)(5).
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The FSA amendments include a similar provision but expands student eligibility and limits the The FSA amendments include a similar provision but expands student eligibility and limits the
benefit to the Pell Grant program only.benefit to the Pell Grant program only.~~100~~101 An otherwise Pell Grant-eligible student whose parent An otherwise Pell Grant-eligible student whose parent
or guardian died under specified circumstances may qualify for the total maximum Pell Grant or guardian died under specified circumstances may qualify for the total maximum Pell Grant
provided the student is under age 33. The specified circumstances occur when the parent or provided the student is under age 33. The specified circumstances occur when the parent or
guardian was guardian was
 a member of the U.S. Armed Forces and died in the line of duty while serving on  a member of the U.S. Armed Forces and died in the line of duty while serving on
active duty on or after September 11, 2001; or active duty on or after September 11, 2001; or
 actively serving as a public safety officer and died in the line of duty.  actively serving as a public safety officer and died in the line of duty.
The parent’s or guardian’s death does not qualify the student for additional amounts of non-Pell The parent’s or guardian’s death does not qualify the student for additional amounts of non-Pell
Grant HEA Title IV aid. In other words, the parent’s or guardian’s death has no effect on SAI. Grant HEA Title IV aid. In other words, the parent’s or guardian’s death has no effect on SAI.
Effect of Drug Convictions and Draft Registration on Student
Eligibility
Until the applicable provisions of the FSA amendments take effect, certain drug convictions and Until the applicable provisions of the FSA amendments take effect, certain drug convictions and
failure for males to register for the draft make individuals ineligible for federal student aid under failure for males to register for the draft make individuals ineligible for federal student aid under
HEA Title IV. HEA Title IV.
 Students may be disqualified from HEA Title IV aid for a period of time or indefinitely  Students may be disqualified from HEA Title IV aid for a period of time or indefinitely
for a federal or state conviction for possession or sale of a controlled substance while for a federal or state conviction for possession or sale of a controlled substance while
receiving HEA Title IV student aid. Periods of ineligibility for federal student aid funds receiving HEA Title IV student aid. Periods of ineligibility for federal student aid funds
are based on whether the conviction was for the sale or possession of drugs and whether are based on whether the conviction was for the sale or possession of drugs and whether
the student has previous offenses.the student has previous offenses.~~101~~102
 The Military Selective Service Act specifies that any individuals who fail to register with  The Military Selective Service Act specifies that any individuals who fail to register with
the Selective Service shall be ineligible for federal student aid under HEA Title IV. the Selective Service shall be ineligible for federal student aid under HEA Title IV.~~102~~103
Men who are required to register and do not do so are ineligible unless they did not Men who are required to register and do not do so are ineligible unless they did not
knowingly and willfully fail to register. knowingly and willfully fail to register.
The FSA amendments eliminate the above disqualifications. Unlike most other provisions in the The FSA amendments eliminate the above disqualifications. Unlike most other provisions in the
law, ED is authorized (but not required) to implement these provisions earlier than the effective law, ED is authorized (but not required) to implement these provisions earlier than the effective
date (July 1, 2023) associated with most other provisions.date (July 1, 2023) associated with most other provisions.~~103~~104 If the Secretary does so, notice must If the Secretary does so, notice must
be published in the be published in the Federal Register at least 60 days before implementation that delineates on at least 60 days before implementation that delineates on
what date, under what conditions, and for which award years the Secretary will implement the what date, under what conditions, and for which award years the Secretary will implement the
amendments. amendments.
On June 17, 2021, ED published notice of an early implementation in the On June 17, 2021, ED published notice of an early implementation in the Federal Register..~~104~~105 For For
the 2021-2022 and 2022-2023 award years,the 2021-2022 and 2022-2023 award years,~~105~~106 the questions about Selective Service Registration the questions about Selective Service Registration

~~100~~101 HEA §401(c), as amended by the FSA. HEA §401(c), as amended by the FSA.
~~101~~102 HEA §484(r), as in effect prior to implementation of the FSA amendments. HEA §484(r), as in effect prior to implementation of the FSA amendments.
~~102~~103 50 U.S.C. §3811(f)-(g). 50 U.S.C. §3811(f)-(g).
~~103~~104 FSA §702(n)(2). FSA §702(n)(2).
~~104~~105 U.S. Department of Education, Office of Postsecondary Education, U.S. Department of Education, Office of Postsecondary Education, "“Early Implementation of the FAFSA Early Implementation of the FAFSA
Simplification ActSimplification Act'’s Removal of Requirements for Title IV Eligibility Related to Selective Service Registration and s Removal of Requirements for Title IV Eligibility Related to Selective Service Registration and
Drug-Related Convictions,Drug-Related Convictions,"” 86 86 Federal Register 32252-32253, June 17, 2021, at 32252-32253, June 17, 2021, at
https://www.govinfo.gov/content/pkg/FR-2021-06-17/pdf/2021-12762.pdf. https://www.govinfo.gov/content/pkg/FR-2021-06-17/pdf/2021-12762.pdf.
~~105~~106 IHEs could have implemented these changes as early as June 17, 2021, but were required to implement them no IHEs could have implemented these changes as early as June 17, 2021, but were required to implement them no
later than 60 days thereafter. later than 60 days thereafter.
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and specified drug offenses will remain on the FAFSA but affirmative answers to these questions and specified drug offenses will remain on the FAFSA but affirmative answers to these questions
will no longer affect students’ HEA Title IV eligibility. Beginning in the 2023-2024 award year, will no longer affect students’ HEA Title IV eligibility. Beginning in the 2023-2024 award year,
the questions on Selective Service Registration and applicable drug convictions will be removed the questions on Selective Service Registration and applicable drug convictions will be removed
from the FAFSA. from the FAFSA.
Sharing of Student Information
Under current law, the HEA specifies that student-level information from the FAFSA is shared Under current law, the HEA specifies that student-level information from the FAFSA is shared
with states, IHEs specified by the student, and specified scholarship organizations.with states, IHEs specified by the student, and specified scholarship organizations.~~106~~107 Other Other
legislation specifies that students may grant explicit written consent for their IHEs to share legislation specifies that students may grant explicit written consent for their IHEs to share
information with scholarship granting organizations or “an organization … designated by the information with scholarship granting organizations or “an organization … designated by the
applicant to assist the applicant in applying for and receiving financial assistance for any applicant to assist the applicant in applying for and receiving financial assistance for any
component of the applicant’s cost of attendance.”component of the applicant’s cost of attendance.”~~107~~108
Beyond the required authorizations to allow for data sharing under the FUTURE Act, the FSA Beyond the required authorizations to allow for data sharing under the FUTURE Act, the FSA
amendments further specify that applicants may provide additional authorization to have certain amendments further specify that applicants may provide additional authorization to have certain
information shared with “applicable agencies that handle applications for means-tested Federal information shared with “applicable agencies that handle applications for means-tested Federal
benefit programs.” The information shared with these agencies may include the student’s SAI and benefit programs.” The information shared with these agencies may include the student’s SAI and
scheduled Pell Grant but shall not include federal tax information shared from the IRS.scheduled Pell Grant but shall not include federal tax information shared from the IRS.~~108~~109
Other Changes to Institution-Level Administration
and Aid Packaging
FAAs at eligible institutions are involved in several aspects of administering HEA Title IV aid FAAs at eligible institutions are involved in several aspects of administering HEA Title IV aid
programs. Key roles include reviewing and verifying information submitted by students on the programs. Key roles include reviewing and verifying information submitted by students on the
FAFSA, calculating student aid awards, disbursing awards, adjusting awards to ensure students FAFSA, calculating student aid awards, disbursing awards, adjusting awards to ensure students
do not receive more assistance than they are eligible for, record keeping, and reporting various do not receive more assistance than they are eligible for, record keeping, and reporting various
information to ED. According to federal student aid need analysis procedures, a student’s EFC, information to ED. According to federal student aid need analysis procedures, a student’s EFC,
amount of EFA, and estimated COA are critical components of determining student aid awards. amount of EFA, and estimated COA are critical components of determining student aid awards.
Verification
Under current practice, institutions must verify information provided on the FAFSA for a portion Under current practice, institutions must verify information provided on the FAFSA for a portion
of federal aid recipients. Policies and procedures associated with verification are largely of federal aid recipients. Policies and procedures associated with verification are largely
established in regulations and agency guidance.established in regulations and agency guidance.~~109~~110 Verification mainly consists of students Verification mainly consists of students
providing documentation to confirm that information provided on the FAFSA is accurate.providing documentation to confirm that information provided on the FAFSA is accurate.~~110~~111

~~106~~107 HEA §483(a)(3)(E), as in effect prior to implementation of the FSA amendments. HEA §483(a)(3)(E), as in effect prior to implementation of the FSA amendments.
~~107~~108 Section 312 of the Department of Defense and Labor, Health, and Human Services and Education Appropriation Section 312 of the Department of Defense and Labor, Health, and Human Services and Education Appropriation
Act, 2019 and Continuing Appropriation Act, 2019 (P.L. 115-245). The provisions in this law further specify that “this Act, 2019 and Continuing Appropriation Act, 2019 (P.L. 115-245). The provisions in this law further specify that “this
section shall be in effect until Title IV of the HEA is reauthorized.” section shall be in effect until Title IV of the HEA is reauthorized.”
~~108~~ 109 HEA §483(a)(2)(D)(ii), as amended by the FSA. HEA §483(a)(2)(D)(ii), as amended by the FSA.
~~109~~110 See 34 C.F.R. §§668.51-668.61 for regulations. The regulations specify that they are established under the authority See 34 C.F.R. §§668.51-668.61 for regulations. The regulations specify that they are established under the authority
of HEA Section 487 (20 U.S.C. §1094). of HEA Section 487 (20 U.S.C. §1094).
~~110~~111 The specific details of verification procedures can vary from one year to the next. For information on the 2021-2022 The specific details of verification procedures can vary from one year to the next. For information on the 2021-2022
award year, see Chapter 4 of ED’s “Application and Verification Guide” from AY2021-2022 at award year, see Chapter 4 of ED’s “Application and Verification Guide” from AY2021-2022 at
https://fsapartners.ed.gov/sites/default/files/attachments/2021-02/2122FSAHbkAVGMaster.pdf. https://fsapartners.ed.gov/sites/default/files/attachments/2021-02/2122FSAHbkAVGMaster.pdf.
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The FSA amendments establish several new statutory provisions related to verification. It directs The FSA amendments establish several new statutory provisions related to verification. It directs
that ED, “to the maximum extent practicable, streamline and simplify the process of verification that ED, “to the maximum extent practicable, streamline and simplify the process of verification
for applicants” and requires ED to publish data annually on verification activities.for applicants” and requires ED to publish data annually on verification activities.~~111~~112
Estimated Financial Assistance
Under current law, student need is defined as COA minus the sum of the EFC and EFA.Under current law, student need is defined as COA minus the sum of the EFC and EFA.~~112~~113 The The
statute defines EFA as “all scholarships, grants, loans, or other assistance known to the institution statute defines EFA as “all scholarships, grants, loans, or other assistance known to the institution
at the time the determination of the student’s need is made,” with specified exceptions.at the time the determination of the student’s need is made,” with specified exceptions.~~113~~114 EFA EFA
does not affect eligibility for Pell Grants but can reduce eligibility for other forms of need-based does not affect eligibility for Pell Grants but can reduce eligibility for other forms of need-based
federal aid. federal aid.
The FSA amendments make a few changes to the forms of assistance that are considered EFA. The FSA amendments make a few changes to the forms of assistance that are considered EFA.
The FSA amendments The FSA amendments ~~do not maintain~~remove the exclusion of special combat pay from EFA. The law the exclusion of special combat pay from EFA. The law
specifically excludes payments made and services provided under Title IV-E of the Social specifically excludes payments made and services provided under Title IV-E of the Social
Security Act to a child or youth in foster care, or formerly in foster care. This includes, for Security Act to a child or youth in foster care, or formerly in foster care. This includes, for
example, the value of a Title IV-E foster care maintenance payment, Educational and Training example, the value of a Title IV-E foster care maintenance payment, Educational and Training
Vouchers (ETVs), or any other services or assistance provided to the youth under Title IV-E, Vouchers (ETVs), or any other services or assistance provided to the youth under Title IV-E,
including the Chafee Foster Care Independence Program for Successful Transition to including the Chafee Foster Care Independence Program for Successful Transition to
Adulthood.Adulthood.~~114~~115 The FSA amendments also exclude from EFA emergency financial assistance The FSA amendments also exclude from EFA emergency financial assistance
provided to the student for unexpected expenses that are a component of the student’s COA but provided to the student for unexpected expenses that are a component of the student’s COA but
not considered when the need determination is made. not considered when the need determination is made.
Cost of Attendance
Under current law, the statute establishes the elements for institutions to use in estimating the Under current law, the statute establishes the elements for institutions to use in estimating the
COA that is used in packaging student aid.COA that is used in packaging student aid.~~115~~116 For students attending at least half-time, COA For students attending at least half-time, COA
includes tuition, fees, books, supplies, transportation, miscellaneous costs, and several options for includes tuition, fees, books, supplies, transportation, miscellaneous costs, and several options for
room and board. COA can also include specified costs relevant to students in certain situations, room and board. COA can also include specified costs relevant to students in certain situations,
including dependent care expenses, study abroad expenses, and expenses associated with a including dependent care expenses, study abroad expenses, and expenses associated with a
disability. For less than half-time students, the universe of applicable costs is somewhat narrower. disability. For less than half-time students, the universe of applicable costs is somewhat narrower.
Separate provisions of the HEA prohibit ED from regulating beyond what is in the statute.Separate provisions of the HEA prohibit ED from regulating beyond what is in the statute.~~116~~117
The FSA amendments provide additional detail on how IHEs will calculate components of COA The FSA amendments provide additional detail on how IHEs will calculate components of COA
for students in various circumstances. These additional details include providing a separate for students in various circumstances. These additional details include providing a separate
allowance “for purchasing food … that provides the equivalent of three meals per day” for each allowance “for purchasing food … that provides the equivalent of three meals per day” for each

~~111~~112 HEA §483(b)(6), as amended by the FSA. HEA §483(b)(6), as amended by the FSA.
~~112~~113 HEA §471, as in effect prior to implementation of the FSA amendments. HEA §471, as in effect prior to implementation of the FSA amendments.
~~113~~114 HEA §480(j). HEA §480(j).
~~114~~115 Children in foster care may be eligible for Title IV-E foster care maintenance payments, and if age 14 or older they Children in foster care may be eligible for Title IV-E foster care maintenance payments, and if age 14 or older they
are also eligible for Chafee services, including Educational and Training Vouchers (ETVs). The exclusion of the value are also eligible for Chafee services, including Educational and Training Vouchers (ETVs). The exclusion of the value
of Title IV-E payments or services applies only to youth formerly in foster care if they are eligible for Chafee services, of Title IV-E payments or services applies only to youth formerly in foster care if they are eligible for Chafee services,
including ETVs. Chafee-eligible youth include those who left foster care for adoption or legal guardianship at age 16 or including ETVs. Chafee-eligible youth include those who left foster care for adoption or legal guardianship at age 16 or
older, or youth who left foster care for any other reason at age 14 or older. For Chafee-eligible former foster youth, any older, or youth who left foster care for any other reason at age 14 or older. For Chafee-eligible former foster youth, any
Title IV-E adoption assistance or guardianship assistance payment would also be excluded from determination of need. Title IV-E adoption assistance or guardianship assistance payment would also be excluded from determination of need.
For additional information, see CRS Report RL34499, For additional information, see CRS Report RL34499, Youth Transitioning from Foster Care: Background and Federal
Programs. .
~~115~~116 HEA §472, as in effect prior to implementation of the FSA amendments. HEA §472, as in effect prior to implementation of the FSA amendments.
~~116~~117 HEA §478(a), as in effect prior to implementation of the FSA amendments. HEA §478(a), as in effect prior to implementation of the FSA amendments.
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student who does and does not elect “institutionally owned or operated food services.” student who does and does not elect “institutionally owned or operated food services.”~~117~~118 The The
FSA amendments also remove the prohibition for regulating on components of COA other than FSA amendments also remove the prohibition for regulating on components of COA other than
tuition and fees. It retains the prohibition for regulating on the tuition and fees component of tuition and fees. It retains the prohibition for regulating on the tuition and fees component of
COA.COA.~~118~~119
Other Provisions
The FSA amendments include three provisions that are not related to the direct application for The FSA amendments include three provisions that are not related to the direct application for
and provision of HEA Title IV aid. These provisions are intended to expand outreach among and provision of HEA Title IV aid. These provisions are intended to expand outreach among
prospective students regarding the availability of HEA Title IV aid and provide relief to certain prospective students regarding the availability of HEA Title IV aid and provide relief to certain
institutional and student federal loan borrowers. institutional and student federal loan borrowers.
Early Awareness and Outreach Efforts
Under current law, the HEA directs ED, in cooperation with states, IHEs, secondary schools, and Under current law, the HEA directs ED, in cooperation with states, IHEs, secondary schools, and
other partners, to implement outreach programs to communicate the availability of federal student other partners, to implement outreach programs to communicate the availability of federal student
aid. Outreach efforts can include targeted efforts to recipients of other means-tested benefits and aid. Outreach efforts can include targeted efforts to recipients of other means-tested benefits and
secondary students as well as broader public awareness campaigns. secondary students as well as broader public awareness campaigns.
The FSA amendments expand existing provisions related to early awareness and outreach efforts. The FSA amendments expand existing provisions related to early awareness and outreach efforts.
It directs ED to produce a “consumer-tested method of estimating student eligibility” for Pell It directs ED to produce a “consumer-tested method of estimating student eligibility” for Pell
Grants. It specifies that the estimation method shall be prominently available on ED’s website Grants. It specifies that the estimation method shall be prominently available on ED’s website
and shared with specified partners, including HEA Title IV-participating IHEs and all middle and and shared with specified partners, including HEA Title IV-participating IHEs and all middle and
secondary schools eligible for funds under Title I-A of the Elementary and Secondary Education secondary schools eligible for funds under Title I-A of the Elementary and Secondary Education
Act.Act.~~119~~120 The FSA amendments further direct ED to establish early awareness outreach plans to The FSA amendments further direct ED to establish early awareness outreach plans to
provide information about federal student aid and other informational resources to specified provide information about federal student aid and other informational resources to specified
populations. populations.
Repeal of the Subsidized Usage Limit Applies Requirement
Eligible undergraduate students may borrow Direct Subsidized Loans. These loans have an Eligible undergraduate students may borrow Direct Subsidized Loans. These loans have an
interest subsidy that applies during qualifying periods (e.g., while a borrower is enrolled in an interest subsidy that applies during qualifying periods (e.g., while a borrower is enrolled in an
eligible program on at least a half-time basis).eligible program on at least a half-time basis).~~120~~121 Until the FSA amendments take effect, a student Until the FSA amendments take effect, a student
who is a who is a first-time borrower~~121~~122 may only borrow Direct Subsidized Loans for a period that may may only borrow Direct Subsidized Loans for a period that may
not exceed 150% of the published length of the academic program in which he or she is currently not exceed 150% of the published length of the academic program in which he or she is currently
enrolled.enrolled.~~122~~123 This is referred to as the Subsidized Usage Limit Applies (SULA) requirement. This is referred to as the Subsidized Usage Limit Applies (SULA) requirement.~~123 If a~~

~~117~~124 If a Direct Subsidized Loan borrower subject to this provision remains enrolled in the same program 118 HEA §472(a)(1)(5)(A)-(B), as amended by the FSA. HEA §472(a)(1)(5)(A)-(B), as amended by the FSA.
~~118~~119 HEA §478(a)(2), as amended by the FSA. HEA §478(a)(2), as amended by the FSA.
~~119~~120 Title I-A of the Elementary and Secondary Education Act provides funds to elementary and secondary schools with Title I-A of the Elementary and Secondary Education Act provides funds to elementary and secondary schools with
relatively high concentrations of students from low-income families. For information, see CRS Report R44461, relatively high concentrations of students from low-income families. For information, see CRS Report R44461,
Allocation of Funds Under Title I-A of the Elementary and Secondary Education Act. .
~~120~~121 For additional information on Direct Subsidized Loans, see CRS Report R45931, For additional information on Direct Subsidized Loans, see CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers~~, by Alexandra~~
~~Hegji.~~
~~121~~. 122 A first-time borrower is “an individual who has no outstanding balance of principal or interest on a Direct Loan A first-time borrower is “an individual who has no outstanding balance of principal or interest on a Direct Loan
Program or [Federal Family Education Loan] Program loan on July 1, 2013, or on the date the borrower obtains a Program or [Federal Family Education Loan] Program loan on July 1, 2013, or on the date the borrower obtains a
Direct Loan Program loan after July 1, 2013.” 34 C.F.R. §685.200(f)(1)(i). Direct Loan Program loan after July 1, 2013.” 34 C.F.R. §685.200(f)(1)(i).
~~122~~123 HEA §455(q), as in effect prior to implementation of the FSA amendments. HEA §455(q), as in effect prior to implementation of the FSA amendments.
~~123~~124 This is sometimes also referred to as the Direct Subsidized Loan maximum eligibility period. This is sometimes also referred to as the Direct Subsidized Loan maximum eligibility period.
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~~Direct Subsidized Loan borrower subject to this provision remains enrolled in the same program~~
for which the loan was obtained (or another undergraduate academic program of equal or shorter for which the loan was obtained (or another undergraduate academic program of equal or shorter
length) beyond the applicable maximum eligibility period, the borrower will become responsible length) beyond the applicable maximum eligibility period, the borrower will become responsible
for paying the interest that accrues on all his or her previously borrowed Direct Subsidized Loans for paying the interest that accrues on all his or her previously borrowed Direct Subsidized Loans
after the date that the maximum eligibility period is exceeded. after the date that the maximum eligibility period is exceeded.
The FSA amendments repeal the SULA requirement. The law requires ED to implement the The FSA amendments repeal the SULA requirement. The law requires ED to implement the
repeal by July 1, 2023, but permits ED to implement it earlier.repeal by July 1, 2023, but permits ED to implement it earlier.~~124~~125 Recently published ED Recently published ED
regulations effectuate this repeal. Specifically, effective August 13, 2021, the SULA requirements regulations effectuate this repeal. Specifically, effective August 13, 2021, the SULA requirements
do not apply to any borrower who receives a Direct Subsidized loan first disbursed on or after do not apply to any borrower who receives a Direct Subsidized loan first disbursed on or after
July 1, 2021. In addition, for borrowers who have a Direct Subsidized Loan that is outstanding as July 1, 2021. In addition, for borrowers who have a Direct Subsidized Loan that is outstanding as
of July 1, 2021, and on which the borrower has been responsible for paying interest because they of July 1, 2021, and on which the borrower has been responsible for paying interest because they
exceeded the maximum eligibility period, ED will “adjust their account to remove the interest exceeded the maximum eligibility period, ED will “adjust their account to remove the interest
that accrued and reapply the borrower’s payments accordingly.”that accrued and reapply the borrower’s payments accordingly.”~~125~~126
HBCU Capital Financing Loan Repayment
The Historically Black Colleges and Universities Capital Financing Program (HBCU Cap Fin) is The Historically Black Colleges and Universities Capital Financing Program (HBCU Cap Fin) is
a loan guarantee program that provides federal assistance to HBCUs to obtain low-cost capital a loan guarantee program that provides federal assistance to HBCUs to obtain low-cost capital
financing for campus maintenance, renovation, and construction projects.financing for campus maintenance, renovation, and construction projects.~~126~~127
The FSA amendments direct ED to repay, within 90 days of enactment and on behalf of The FSA amendments direct ED to repay, within 90 days of enactment and on behalf of
participating HBCUs, the outstanding balances on HBCU Cap Fin loan amounts that had been participating HBCUs, the outstanding balances on HBCU Cap Fin loan amounts that had been
disbursed as of December 27, 2020. disbursed as of December 27, 2020.
In April 2021, ED announced the discharge of approximately $1.6 billion of debt for 45 In April 2021, ED announced the discharge of approximately $1.6 billion of debt for 45
HBCUs.HBCUs.~~127~~128

Author Information

Benjamin Collins Benjamin Collins
Cassandria Dortch Cassandria Dortch
Analyst in Labor Policy Analyst in Labor Policy
Specialist in Education Policy Specialist in Education Policy

~~124~~125 FSA §705(b). FSA §705(b).
~~125~~126 U.S. Department of Education, “Repeal of the William D. Ford Federal Direct Loan Program Subsidized Usage U.S. Department of Education, “Repeal of the William D. Ford Federal Direct Loan Program Subsidized Usage
Limit Restriction,” 86Limit Restriction,” 86 Federal Register 31432-31438, June 14, 2021. 31432-31438, June 14, 2021.
~~126~~127 For additional information, see CRS Report R43237, For additional information, see CRS Report R43237, Programs for Minority-Serving Institutions Under the Higher
Education Act~~, by Alexandra Hegji.~~
~~127~~. 128 U.S. Department of Education, “Department of Education Discharges Over $1.6 billion in HBCU Capital Finance U.S. Department of Education, “Department of Education Discharges Over $1.6 billion in HBCU Capital Finance
Debt,” April 2, 2021, at https://www.ed.gov/news/press-releases/department-education-discharges-over-16-billion-Debt,” April 2, 2021, at https://www.ed.gov/news/press-releases/department-education-discharges-over-16-billion-
hbcu-capital-finance-debt. hbcu-capital-finance-debt.
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