The FUTURE Act (P.L. 116-91): Amendments to the Higher Education Act and Internal Revenue Code

The FUTURE Act (P.L. 116-91): Amendments to the Higher Education Act and Internal Revenue Code

The FUTURE Act (P.L. 116-91): Amendments to June 9, 2020
the Higher Education Act and Internal Revenue Benjamin Collins
Code
Analyst in Labor Policy

In December 2019, Congress enacted and the President signed the Fostering Undergraduate
Milan N. Ball
Talent by Unlocking Resources for Education Act (FUTURE Act; P.L. 116-91). The law
Legislative Attorney
primarily addresses three higher education issues:

Permanent authorization of grant funds for Historically Black Colleges and Universities
Joselynn H. Fountain
(HBCUs) and Minority-Serving Institutions (MSIs). The law amends the Higher Education
Analyst in Education Policy
Act (HEA) to permanently authorize mandatory funding for grant programs to support HBCUs

and MSIs. Authorization for this funding had expired after FY2019. Under the FUTURE Act,
Cassandria Dortch
$255 million in annual mandatory funding is authorized for “fiscal year 2020 and each fiscal year
Specialist in Education
thereafter.”
Policy

Authorization of disclosure of Internal Revenue Service (IRS) data for the administration
of specified federal student aid programs and other authorized purposes . The FUTURE Act

amends the HEA and the Internal Revenue Code (IRC) to specify a process through which the
IRS may be granted authorization to disclose limited information to specified authorized persons for the administration of
certain federal student aid programs and other authorized purposes. Upon the Secretary of Education requesting and
certifying that an individual and any applicable family members have approved the disclosure of their tax return information,
the Secretary of the Treasury may provide their return information to any authorized person. The term authorized person is
defined as any person who is a Department of Education (ED) officer, employee, or contractor and is specifically authorized
and designated by the Secretary of Education to receive return information for the applicable permitted purpose under the
law. Prior to this amendment, the IRS could not readily share return information directly with ED or associated parties. The
law further amends the HEA to fully implement the disclosure process. The changes made by the FUTURE Act focus on
three aspects of applying for and certifying eligibility for federal student aid benefits:
 Applications and recertification for income-contingent or income-based repayment plans. Student loan
borrowers participating in income-contingent or income-based repayment plans for Direct Loans may
authorize the IRS to disclose relevant return information to ED and other authorized persons for the
purposes of applying for or recertifying eligibility to repay according to such plans. When a borrower
authorizes disclosure, the authorization remains in effect in subsequent years unless the borrower
withdraws authorization.
 Post-discharge earnings monitoring under total and permanent disability (TPD) discharge. Student loan
borrowers who have had loans discharged on the basis of TPD may authorize the IRS to disclose relevant
return information to ED and other authorized persons for the purposes of post-discharge earnings
monitoring. When a borrower authorizes disclosure, the authorization remains in effect for the duration of
the three-year post-discharge monitoring period or until the borrower withdraws authorization.
 Completion of the Free Application for Federal Student Aid (FAFSA) and determination of eligibility for
and the amount of federal student financial aid. Students completing the FAFSA are required to authorize
the IRS to disclose relevant return information to ED and other authorized persons for the purposes of
establishing the student’s expected family contribution (EFC) and corresponding eligibility for federal
student aid. In cases where determination of the student’s EFC considers the financial resources of the
student’s parents or spouse, the applicable family members must also grant authorization to have their
return information disclosed.
Increase in Pell Grant funding. The law increases mandatory appropriations for Pell Grants by $25 million in FY2020 and
each succeeding fiscal year.
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Contents
Overview and Policy Context............................................................................................ 1
HEA Programs for HBCUs and MSIs................................................................................. 1
Prior Status and FUTURE Act Provisions...................................................................... 1
Program Overview..................................................................................................... 1
Sharing of Tax Return Information for the Administration of Federal Student Aid
Programs .................................................................................................................... 3
Policy Overview Prior to the FUTURE Act ................................................................... 3
Changes Made by the FUTURE Act ............................................................................. 4
Income-Contingent or Income-Based Repayment Plans.............................................. 5
Total and Permanent Disability Discharge ................................................................ 5
FAFSA Completion .............................................................................................. 6
Additional Uses and Limitations ............................................................................. 7
Changes to Pel Grant Funding .......................................................................................... 8
Prior Versions of the FUTURE Act .................................................................................... 9
House Version of H.R. 2486 ........................................................................................ 9
Senate Version of H.R. 2486........................................................................................ 9

Tables
Table 1. Discretionary and Mandatory Appropriations for Select HBCU and MSI
programs..................................................................................................................... 2

Contacts
Author Information ....................................................................................................... 10

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Overview and Policy Context
In December 2019, Congress enacted and the President signed the Fostering Undergraduate
Talent by Unlocking Resources for Education Act (FUTURE Act; P.L. 116-91). The law primarily
addresses three higher education issues:
 It amends the Higher Education Act (HEA) to permanently authorize grant
funding for programs to support Historical y Black Colleges and Universities
(HBCUs) and Minority-Serving Institutions (MSIs). The law authorizes $255
mil ion in annual mandatory funding. Authorization for this funding had expired
after FY2019.
 It amends the HEA and the Internal Revenue Code (IRC) to specify a process
through which individuals and applicable family members may provide
authorization for the Internal Revenue Service (IRS) to disclose certain federal
income tax return information to the Department of Education (ED) and other
authorized persons for the administration of financial aid programs. The law
further amends the HEA to fully operationalize this process. Prior to this
amendment, the IRS could not readily share return information directly with ED
or associated parties.1
 It increases mandatory appropriations for Pel Grants by $25 mil ion in FY2020
and each succeeding fiscal year.
HEA Programs for HBCUs and MSIs
Prior Status and FUTURE Act Provisions
Title III-F of the HEA authorizes $255 mil ion in mandatory appropriations for programs for
HBCUs and MSIs.2 The programs received this funding from FY2008 until the authority expired
at the end FY2019. Section 2 of the FUTURE Act amends Title III-F of the HEA to permanently
authorize mandatory appropriations for “fiscal year 2020 and each fiscal year thereafter.”
Program Overview
HBCUs and MSIs are institutions of higher education that tend to serve high concentrations of
minority students and students with financial need. Many HBCUs and MSIs have faced
chal enges in obtaining financial support, affecting their ability to serve their students. Federal
policy recognizes the role of such institutions and provides financial resources to them
through several grant programs authorized under the HEA.3 These programs are supported by a
combination of mandatory and discretionary appropriations.

1 T he Coronavirus Aid, Relief, and Economic Security Act, (CARES Act; P.L. 116-136), enacted March 27, 2020,
made further amendments to certain provisions that had been amended by the FUT URE Act. Coronavirus Aid, Relief,
and Economic Security Act , P.L. 116-136, § 3516 (2020).
2 T hese grants are nonexempt mandatory spending and are subject to sequestration under the Budget Control Act of
2011 (P.L. 112-25). In FY2019, grants were subject to a 6.2% reduction and the total post -sequestration funding level
was approximately $239 million. For example, see Department of Education, Fiscal Year 2 019 Congressional Action
T ables, pages 10-11, https://www2.ed.gov/about/overview/budget/budget19/19action.pdf.
3 For more information, see CRS Report R43237, Programs for Minority-Serving Institutions Under the Higher
Education Act.
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Table 1 presents the discretionary and mandatory appropriations for those HBCU and MSI
programs that received mandatory funding in FY2019 and FY2020. The FY2019 appropriations
were made prior to the enactment of the FUTURE Act and the FY2020 appropriations were made
after its enactment.
General y, the purpose of these programs is to assist institutions in strengthening their academic,
administrative, and fiscal capabilities. Some examples of authorized uses of grant funds, which
can vary across programs, are to support construction, maintenance, and improvement of
instructional facilities; and the development and improvement of academic programs.
Table 1. Discretionary and Mandatory Appropriations
for Select HBCU and MSI programs
(Dol ars in thousands)

FY2019 Appropriations
FY2020 Appropriations
Program
Discretionary
Mandatory Discretionary
Mandatory
Strengthening Tribal y Control ed
$31,584
$28,140
$36,633
$28,230
Col eges and Universities
Strengthening Alaska Native and
$15,930
$14,000
$18,320
$14,115
Native Hawai an Institutions
Strengthening Native American-
$3,864
$4,690
$4,444
$4,705
Serving, Nontribal Institutions
Strengthening Asian American and
$3,864
$4,690
$4,444
$4,705
Native American Pacific Islander-
Serving Institutions
Strengthening Historical y Black
$282,420
$79,730
$324,792
$79,885
Col eges and Universities
Strengthening Predominantly Black
$11,475
$14,070
$13,197
$14,115
Institutions (PBIs)
Hispanic Serving Institutions (HSIs)
N/A
$93,800
N/A
$94,100
Science, Technology, Engineering,
and Math (STEM) and Articulationa
Source: U.S. Department of Education, FY2019 Budget Tables, https://www2.ed.gov/about/overview/budget/
budget19/19action.pdf; and FY2020 Budget Tables, https://www2.ed.gov/about/overview/budget/budget20/
20action.pdf
Note: Mandatory funding levels are after sequestration under the Budget Control Act.
a. The Developing HSIs program, a separate program for HSIs, received $124,415,000 in discretionary
appropriations in FY2019 and $143,081,000 in discretionary appropriations in FY2020. Mandatory
appropriations are not provided for the Developing HSIs program.
Historical y, HBCU and MSI programs were funded only through discretionary appropriations.
However, in 2007 the College Cost Reduction and Access Act (P.L. 110-84) provided mandatory
appropriations for newly authorized and pre-existing MSI programs beginning in FY2008.
Mandatory appropriations for the programs, totaling $255 mil ion annual y, were extended
through FY2019 under the SAFRA Act as part of the Health Care and Education Reconciliation
Act (P.L. 111-152).4 For many MSI programs, mandatory funds are authorized for the same

4 In the House-passed version of H.R. 3221 in the 111th Congress, SAFRA was an acronym for the Student Aid and
Fiscal Responsibility Act of 2009. In the final version, T itle II of P.L. 111-152, the legislation was simply titled
“SAFRA Act.”
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purpose as discretionary funds. However, HSI STEM and Articulation and Strengthening PBIs
are not; these are mandatory programs authorized for unique purposes.
Sharing of Tax Return Information for the
Administration of Federal Student Aid Programs
The FUTURE Act amends the IRC to specify a process by which the IRS, with the consent of the
taxpayer, is authorized to disclose specified return information to ED and other authorized
persons for the purposes of administering certain federal student aid programs and other
authorized purposes. The FUTURE Act further amends the HEA to establish procedures at ED to
operationalize these disclosures.
Policy Overview Prior to the FUTURE Act
Title IV of the HEA establishes a group of federal student aid programs. Eligibility for many of
these programs is informed in whole or in part by federal income tax return information of the
student and applicable family members.
IRC Section 6103 governs when and how the Department of the Treasury (Treasury) may
disclose returns and return information to other federal agencies for purposes other than tax
administration. IRC Section 6103(a) prohibits federal, state, and local government employees and
certain other persons having access to returns and return information from disclosure unless a
specific exception for such disclosure applies. Immediately prior to the enactment of the
FUTURE Act, no exception explicitly permitted disclosure for the purpose of administration of
federal student aid programs.5
In some cases, applicants completing the Free Application for Federal Student Aid (FAFSA) or
borrowers completing an application or recertification for income-contingent or income-based
repayment plans could utilize the IRS Data Retrieval Tool (DRT) to streamline data entry. The
DRT al ows a student and applicable family members to access their tax return information and
transfer such information to the FAFSA or income-contingent or income-based repayment
application. By using the DRT, tax data “flow through the consumer before being transferred[.]”6
ED has described the DRT as “a solution the IRS and the Department developed to fit the legal
constraints around sharing tax information without explicit consent.”7

5 Under the previous version of IRC Section 6103(l)(13), which expired on December 31, 2007, T reasury could
disclose return information to ED for the administration of income contingent repayment of student loans. T he prior
version of IRC Section 6103(l)(13) permitted T reasury to disclose return information to ED regarding a taxpayer who
received an applicable student loan and whose loan payments were contingent on the taxpayer’s income. Treasury was
authorized to disclose a taxpayer’s identity, filing st atus, and adjusted gross income. T his information could only be
used for the purpose of establishing the appropriate income contingent repayment amount. Since the prior version of
IRC Section 6103(l)(13) expired, ED has obtained taxpayer consents under IRC Section 6103(c) to allow it and its
contractors to receive return information from T reasury. See I.R.M.11.3.29.7 (Sept. 1, 2009).
6 See testimony of James W. Runcie before the House Committee on Oversight and Government Reform, May 3, 2017,
https://www.govinfo.gov/content/pkg/CHRG-115hhrg28504/pdf/CHRG-115hhrg28504.pdf. Since the information
flowed through the consumer, it may have been considered as the taxpayer providing information rather than agency -
to-agency data sharing.
7 Id.
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Changes Made by the FUTURE Act
The FUTURE Act amends IRC Section 6103(l)(13) to authorize Treasury to disclose return
information to ED and ED contractors under specific circumstances to carry out the HEA.8 The
FUTURE Act amends the HEA to establish procedures for ED to obtain authorization from
students and applicable family members, utilize disclosed information in specified federal student
aid programs and for related purposes, and otherwise conform to changes in the FUTURE Act.9
According to the FUTURE Act amendments, if the ED Secretary certifies that an individual and
applicable family members (e.g., parent(s), spouse) have approved the disclosure of their return
information, the ED Secretary can request, and the Treasury Secretary can provide, return
information to any authorized person. The FUTURE Act defines authorized person as any person
who is an ED officer, employee, or contractor and is specifical y authorized and designated by the
ED Secretary to receive return information for the applicable permitted purpose under the
FUTURE Act.10 The FUTURE Act’s amendments to the IRC permit disclosure for the following
three purposes: (1) administration of income-contingent and income-based repayment plans for
Direct Loans; (2) monitoring earnings and reinstating loans discharged based on total and
permanent disability (TPD); and (3) FAFSA completion and determination of eligibility for and
the amount of federal student financial aid to be awarded.11
General y, the FUTURE Act’s amendments to the IRC are drafted to limit disclosure to only the
return information that is necessary for the implementation of the specified policy. The FUTURE
Act does not permit the IRS to disclose an individual’s complete tax return.
In cases where an individual who has authorized disclosure has filed a joint return, the FUTURE
Act amendments specify that authorization of disclosure “with respect to an individual shal be
treated ... as applying with respect to the taxpayer.”12 This language indicates taxpayer
authorization solely relates to an individual taxpayer and not his or her spouse.13
The FUTURE Act amends a number of provisions of the HEA to operationalize the disclosures
authorized by the amendments to the IRC. These amendments to the HEA establish procedures by
which individuals can grant (or, in some cases, decline to grant) approval to have their return
information disclosed to ED and other authorized persons. They establish procedures by which
ED and authorized persons may utilize a prior year’s approval to recertify an application by
disclosing return information in a subsequent year as wel as procedures through which a
borrower can revoke approval.

8 T he amendments to IRC Section 6103 became effective on the date of the FUT URE Act’s enactment. Fostering
Undergraduate T alent by Unlocking Resources for Education Act, P.L. 116-91, § 3, 113 Stat. 1189, 1192 (2019). The
CARES Act made technical amendments to IRC Section 6103 for the purposes of carrying out the HEA. Coronavirus
Aid, Relief, and Economic Security Act § 3516(a). T he CARES Act amendments to IRC Section 6103 apply as if
included in the enactment of the FUT URE Act. Id. § 3516(b).
9 Fostering Undergraduate T alent by Unlocking Resources for Education Act § 4-6.
10 26 U.S.C. § 6103(l)(13)(E).
11 Id. § 6103(l)(13)(A), (B), (C).
12 Id. § 6103(l)(13)(F).
13 Id. T he IRC defines taxpayer as “any person subject to any internal revenue tax” and states “‘person’ shall be
construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.” Id. §
7701(a)(1), (14) (emphasis added); see 26 U.S.C. §§ 66, 6013, 6015.
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Income-Contingent or Income-Based Repayment Plans
The FUTURE Act authorizes the Treasury Secretary to disclose return information for individuals
who have granted approval of such disclosure for the purpose of, and to the extent necessary in,
determining eligibility for or repayment obligations under HEA Title IV income-contingent or
income-based repayment plans.14 The ED Secretary can request return information for any
taxable year the ED Secretary deems relevant for such purposes.15 Authorized disclosures include
(1) taxpayer identity information, (2) filing status, (3) adjusted gross income, (4) the total number
of claimed exemptions, (5) the number of dependents taken into account for determining the
Child Tax Credit under IRC Section 24, and (6) the fact that no return was filed (if applicable).16
The FUTURE Act amends the HEA to establish procedures by which a borrower in an income-
contingent or income-based repayment plan, and, if applicable, the borrower’s spouse, may
provide approval to have specified return information disclosed to ED and other authorized
persons.17 The FUTURE Act also establishes an alternative option by which the borrower, and, if
applicable, the borrower’s spouse, may provide such information directly to ED.18 In cases where
the borrower grants approval to the IRS to disclose return information, such approval shal be
ongoing until the borrower or the borrower’s spouse withdraws it.19 The FUTURE Act directs ED
to establish procedures for using this ongoing approval to automatical y recertify a borrower’s
income and family size.20
The loan repayment provisions of the FUTURE Act only apply to Direct Loans.21 They do not
apply to Family Federal Education Loan (FFEL) Program loans, which were the precursor to the
current Direct Loan program and which may also be repaid according to income-based repayment
plans.22 FFEL loans have not been issued since 2010, but, as of the fourth quarter of FY2019
there were approximately 12 mil ion FFEL active borrowers with aggregate outstanding balances
of about $262 bil ion.23
Total and Permanent Disability Discharge
The FUTURE Act authorizes the Treasury Secretary to disclose return information for the
purpose of, and to the extent necessary in, monitoring a borrower’s earnings and, if necessary,
reinstating HEA Title IV loans that were discharged based on TPD.24 Loans may be reinstated if

14 Id. § 6103(l)(13)(A).
15 Id.
16 Id.
17 20 U.S.C. § 1098h(a)(2)(A)(ii)(I).
18 Id. § 1098h(a)(2)(A)(ii)(II).
19 Id. § 1098h(a)(2)(A)(ii)(I). Since the amended HEA provisions require authorization from each spouse, a borrower
who had an ongoing individual authorization and got married may need to submit a new application with authorizations
from each spouse.
20 Id. § 1087e(e).
21 26 U.S.C. 6103(l)(13)(A) specifies that it applies to loans under Part D of T itle IV of the HEA.
22 Id. T he FUT URE Act also does not apply to Perkins Loans, which are not eligible for income -contingent or income-
based repayment plants.
23 See Department of Education, Federal Student Aid Portfolio Summary, https://studentaid.ed.gov/sa/sites/default/files/
fsawg/datacenter/library/PortfolioSummary.xls.
24 26 U.S.C. § 6103(l)(13)(B); see 20 U.S.C. § 1087 (defining total or permanent disability); 34 C.F.R. § 685.213. In
some cases, earnings monitoring may not be necessary. See CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program : Term s and Conditions for Borrowers.
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the borrower’s earnings exceed 100% of the poverty guideline for a family of two.25 Loans may
not be reinstated on the basis of non-earnings forms of income or on the basis of the earnings or
income of the spouse of a borrower whose loans were discharged under the TPD provisions.26
The ED Secretary can request return information for any taxable year the ED Secretary deems
relevant for such purposes.27 Authorized disclosures include (1) taxpayer identity information; (2)
filing status; (3) the fact that no return was filed (if applicable); and (4) the amount of net
earnings from self-employment, wages, and taxable income from a farming business.28
The FUTURE Act amends the HEA to establish a process by which an individual who has had a
loan discharged under the TPD provisions may grant approval to have information necessary for
earnings monitoring under the TPD provisions disclosed from the IRS to authorized persons. The
FUTURE Act specifies that the approval serves as ongoing approval of disclosures until the
individual opts out of such disclosures, or the first day after the three-year period in which a
discharged loan may be reinstated.29
FAFSA Completion
The FUTURE Act authorizes the Treasury Secretary to disclose return information for the
purposes of, and to the extent necessary in, completing the FAFSA and calculating a student’s
expected family contribution (EFC) to determine eligibility for and the amount of federal student
financial aid under specific programs authorized by Title IV of the HEA (FAFSA completion
provision).30 The FUTURE Act restricts the ED Secretary to requesting return information from
the taxable year used for purposes of determining federal student financial aid eligibility.31
Al of the disclosures that are permissible under the income-contingent and income-based
repayment plans and TPD provisions are permissible under the FAFSA completion provision.32
However, the EFC formula used to determine federal student financial aid eligibility considers
substantial y more financial indicators than the formulas used to determine income-contingent
and income-based loan repayment and to monitor post-discharge earnings under TPD. Therefore,
the following additional disclosures are also authorized: (1) the amount of total income tax; (2)
the amount of any American Opportunity and Lifetime Learning Credits under IRC Section 25A;
(3) the amount of individual retirement account distributions not included in adjusted gross
income; (4) the amount of contributions and payments to self-employed SEP, Keogh, and other
qualified plans that were deducted from income; (5) the amount of tax-exempt interest received;
(6) amounts from retirement pensions and annuities not included in adjusted gross income; (7) the
fact that Schedule A (itemized deductions), Schedule B (interest and ordinary dividends),
Schedule D (capital gains and losses), Schedule E (supplemental income and loss), Schedule F
(profit or loss from farming), or Schedule H (household employment taxes) were filed (if

25 34 C.F.R. § 685.213(b)(7)(i)(A) (specifying the poverty guideline is “published annually by the United
States Department of Health and Human Services pursuant to 42 U.S.C. 9902(2)”).
26 See 20 U.S.C. § 1087(a)(1); 34 C.F.R. § 685.213(b)(7).
27 26 U.S.C. § 6103(l)(13)(B).
28 26 U.S.C. § 6103(l)(13)(B); see id. §§ 263A(e)(4) (taxable income from a farming business), 1402(a) (net earnings
from self-employment), 3121(a) (wages); see also Coronavirus Aid, Relief, and Economic Security Act § 3516(a)(5)
(striking out IRC Section 236A(e)(4) and inserting IRC Section 263A(e)(4)).
29 See 20 U.S.C. §§ 1087(a)(3), 1098h(a)(3).
30 See 26 U.S.C. § 6103(l)(13)(C).
31 Id.
32 Id.
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applicable); and (8) the amount reported on Schedule C (profit or loss from business) as net profit
or loss (if applicable).33
The FUTURE Act further amends the IRC to provide authorized persons with the power to re-
disclose return information received for the purposes of determining federal student financial aid
eligibility to (1) certain HEA Title IV-eligible institutions of higher education (IHEs), (2) state
higher education agencies, and (3) scholarship organizations designated by the ED Secretary prior
to enactment of the FUTURE Act.34 ED is required to obtain the written consent of the taxpayer
whose return information is being disclosed prior to re-disclosure to these third parties.35 Re-
disclosed information under this provision may only be used for the application for, awarding of,
and administration of financial aid provided by the federal government or the designated third
party.36
The authorization for re-disclosure in the FUTURE Act mirrors established provisions in the HEA
that specify that state agencies, IHEs, and other ED-designated entities may receive FAFSA
information for the purposes of determining eligibility and awarding financial aid.37
The FUTURE Act amends the HEA to require that students and “any parent or spouse whose
financial information is required” provide approval for specified return information to be
disclosed to persons authorized by ED for the purposes of applying for federal student financial
aid.38 The “any parent or spouse” language in the HEA suggests that for married couples, each
spouse needs to provide authorization. Unlike the policy for borrowers in income-contingent and
income-based loan repayment plans, granting approval is a condition of eligibility for federal
student financial aid.39
Additional Uses and Limitations
The FUTURE Act permits authorized persons to use return information disclosed for income-
contingent and income-based loan repayment programs, TPD post-discharge monitoring of
earnings, and FAFSA completion to be used for three additional purposes:
1. reducing the net cost of improper payments under income-contingent and
income-based repayment plans, relating to certain federal student financial aid
award programs under HEA Title IV, and relating to TPD discharges;
2. oversight activities at the ED Office of the Inspector General, as authorized by
the Inspector General Act of 1978; and
3. conducting analyses and forecasts for estimating cost related to income-
contingent and income-based repayment plans, certain federal student financial
aid award programs under HEA Title IV, and TPD discharges.40

33 Id.
34 Id. § 6103(l)(13)(D)(iii).
35 Id. § 6103(l)(13)(D).
36 Id. § 6103(l)(13)(D)(iii).
37 See 20 U.S.C. § 1090(a)(3)(E).
38 Id. § 1098h(a)(1).
39 Id. § 1098h(a)(1), (2).
40 26 U.S.C. § 6103(l)(13)(D)(i).
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The FUTURE Act further clarifies that this does not permit authorized persons to use return
information for criminal investigations or prosecutions.41
The FUTURE Act amends other subsections in IRC Section 6103 to provide that the amendments
to IRC Section 6103(l) are subject to existing general provisions that prohibit disclosure and
specify recordkeeping and safeguard requirements to protect the confidentiality of disclosed
information.42 In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act; P.L. 116-136) made technical amendments to these provisions to address the responsibilities
of third parties.43
Changes to Pell Grant Funding
The Pel Grant program provides need-based financial grants primarily to low-income
undergraduate students to help them cover the cost of higher education.44 Pel Grants are the
largest single source of federal grant aid for undergraduate students; they are projected to provide
approximately $30.4 bil ion in aid to roughly 7.1 mil ion undergraduate students in the 2021-2022
award year.45 The Pel Grant program is often referred to as a quasi-entitlement because, for the
most part, students who meet the eligibility criteria receive payments, but the majority of funding
is discretionary appropriations controlled through the annual appropriations process.
Each Pel Grant award that a student receives is comprised of a mandatory add-on award amount
and a discretionary award amount. The mandatory add-on award costs are funded by a permanent,
indefinite mandatory appropriation. The discretionary award costs are funded by (1) annual

41 Id. § 6103(l)(13)(D)(ii).
42 Fostering Undergraduate T alent by Unlocking Resources for Education Act § 3(b) -(c).
43 IRC Section 6103(a) prohibits federal, state, and local government employees and certain other persons from
disclosing returns and return information. Under IRC Section 6103(a)(3), other persons are prohibited from disclosing
returns and return information if they had or have access to information pursuant to a designated provision. T he Act
amended IRC Section 6103(a) to make IRC Section 6103(l)(13) a designated provision. Fostering Undergraduate
T alent by Unlocking Resources for Education Act § 3(b). T he CARES Act removed IRC Section (l)(13) as a
designated provision and made IRC Section 6103(l)(13)(A), (B), (C), and (D)(i) designated provisions instead.
Coronavirus Aid, Relief, and Economic Security Act § 3516(a)(1). As a result, other persons having access to returns
and return information under (D)(iii), the provision relating to re-disclosure to third parties, are not prohibited from
disclosing returns and return information under IRC Section 6103(a). IRC Section 6103(p) imposes recordkeeping and
safeguard requirements on the T reasury Secretary to protect the confidentiality of returns and return information. T he
CARES Act amends IRC Section 6103(p)(3) to require the T reasury Secretary to include IRC Section
6103(l)(13)(D)(iii) disclosure requests and disclosures in the T reasury Secretary’s standardized system of permanent
records on use and disclosure of returns and return information. Coronavirus Aid, Relief, and Economic Security Act §
3516(a)(2). Previously, the Act amended IRC Section 6103(p)(3) to require the T reasury Secretary to include all IRC
Section 6103(l)(13) disclosure requests and disclosures in the standardized system. Fostering Undergraduate T alent by
Unlocking Resources for Education Act § 3(c). Additionally, the CARES Act amends IRC Section 6103(p)(4) to
require any other person described in IRC Section 6103(l)(13)(A), (B), (C), and (D)(i) to satisfy the T reasury
Secretary’s data safeguards as a condition for receiving returns or return information. Coronavirus Aid, Relief, and
Economic Security Act § 3516(a)(4). Previously, the Act amended IRC Section 6103(p)(4) to require any other person
described in IRC Section 6103(l)(13) to satisfy the Treasury Secretary’s data safeguards as a condition for receiving
returns or return information, including any person described in IRC Section 6103(l)(13)(D)(iii). Fostering
Undergraduate T alent by Unlocking Resources for Education Act § 3(b)-(c).
44 For more information on Pell Grants, see CRS Report R45418, Federal Pell Grant Program of the Higher Education
Act: Prim er.
45 U.S. Department of Education, Department of Education Budget T ables, FY 2021 President’s Budget Request (last
updated February 10, 2020), available at https://www2.ed.gov/about/overview/budget/tables.html?src=ct.
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The FUTURE Act: Amendments to the Higher Education Act and Internal Revenue Code

discretionary appropriations; (2) permanent, definite mandatory appropriations; and (3) any
accumulated Pel Grant discretionary funding surplus.
The FUTURE Act increases the Pel Grant permanent, definite mandatory appropriations by $25
mil ion in FY2020 and each succeeding fiscal year. The FY2020 appropriation increases from
$1,430,000,000 to $1,455,000,000, and the permanent appropriation for FY2021 and each
subsequent fiscal year increases from $1,145,000,000 to $1,170,000,000.46 The FUTURE Act
does not affect Pel Grant eligibility or award levels for students; it increases overal funding
resources in future fiscal years.
Prior Versions of the FUTURE Act
Prior to the version of the FUTURE Act that was enacted (H.R. 5363), the House and the Senate
independently passed different bil s that would have extended HBCU and MSI funding and made
other changes. Each bil shared a title with the FUTURE Act and used H.R. 2486 as the
legislative vehicle.
House Version of H.R. 248647
On September 17, 2019, under suspension of the rules, the House passed H.R. 2486, which would
have authorized $255 mil ion in mandatory appropriations for HBCUs and MSIs for each of
FY2020 and FY2021. The House bil would have offset these costs by eliminating the authority
to pay account maintenance fees to guaranty agencies under the curtailed FFEL program. The
House bil would have rescinded a portion of mandatory appropriations for the Pel Grant
program in FY2020 and increased Pel Grant funding in FY2025.
Senate Version of H.R. 2486
On December 5, 2019, via voice vote, the Senate passed an amended version of H.R. 2486, which
would have authorized $255 mil ion annual y in permanent mandatory funding for HBCUs and
MSIs. The Senate bil would have made changes to the IRC that would have al owed the IRS to
disclose information to ED and other specified parties for the purposes of administering specified
federal student aid programs. The IRC provisions of the Senate bil were somewhat different from
the IRC provisions in the enacted version of the FUTURE Act. The Senate bil would also have
increased funding for Pel Grants in FY2020 and permanently thereafter.

46 See 20 U.S.C. § 1070a(b)(7)(A)(iv).
47 For more information on the House bill, see CRS Insight IN11172, H.R. 2486, the Fostering Undergraduate Talent
by Unlocking Resources for Education Act (the “FUTURE Act”).
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Author Information

Benjamin Collins
Joselynn H. Fountain
Analyst in Labor Policy
Analyst in Education Policy

Milan N. Ball
Cassandria Dortch
Legislative Attorney
Specialist in Education Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
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