Policy

Senate Passes Bill to Streamline FAFSA Data Collection

The U.S. Senate passed a bill on Thursday to improve the way that the IRS and Department of Education communicate information for FAFSA applications.

• By Sara Friedman
• 12/21/18

Currently, 54 percent of Free Application for Student Aid (FAFSA) applications are filed with information received from the Internal Revenue Service by parents or students using the IRS Data Retrieval Tool. On Thursday, the U.S. Senate passed the Faster Access to Federal Student Aid Act on unanimous consent to turn a seven-click process into a one-click process that transfers information from IRS tax filing data to the Department of Education.

"This legislation will make completing the complicated FAFSA much easier for students and families — allowing them to answer up to 22 questions on the form with one simple click, while securing the applicant's data. It is my hope that the U.S. House of Representatives swiftly passes this legislation," said Senator Lamar Alexander (R-Tenn.) who is the bill's primary sponsor and chairman of the Senate Health, Education, Labor and Pensions Committee.

The bill would amend the Internal Revenue Code and Higher Education Act to allow for cross-agency data sharing to improve and streamline the federal student aid system. The legislation also allows for data sharing between the IRS and Department of Education for applicants requesting or renewing eligibility for income-based loan repayment plans.

Almost a third of borrowers who are currently repaying their student loans are in an income-based repayment program. These programs require borrowers to certify their income on an annual basis, but each year 19 percent of borrowers in this program fail to recertify their income on time, which results in payment spikes and interest capitalization for approximately 1.3 million borrowers.

This piece of bipartisan legislation is also sponsored by Senators Patty Murray (D-Wash.), Sheldon Whitehouse (D-R.I.) and Cory Gardener (R-Colo.). The legislation is also supported by the National Association of Student Financial Aid Administrators. 

"The FAFSA Act not only makes the application process easier for students, but does so while preserving the integrity of the student aid programs," NASFAA President Justin Draeger said. "The financial aid community urges swift action on this bill in the new year so that work can begin to reduce the application and data verification burden that continues to overwhelm students and institutions."

The full text of the FAFSA Act legislation can be found here.