House Education and Workforce Committee Advances Representative Mann's FAFSA Exemptions for Family Farms, Businesses
H.R. 1250, the Family Farm and Small Business Exemption Act, led by Representatives Tracey Mann of Kansas and Jimmy Panetta of California, passed in the House Education and Workforce Committee as a part of H.R. 6951, the College Cost Reduction Act.
Originally introduced in February 2023, the Family Farm and Small Business Act would restore certain exemptions under the Free Application for Federal Student Aid (FAFSA).
"Family farms and small businesses exemplify the American dream," said Representative Mann. "When young people from these families are applying for higher education financial aid, the assets tied up in the family farm or small business should not count against them. FAFSA exemptions for farm and small business families were standard for more than 30 years, and it is time to restore them before a new analysis goes into effect this summer. My legislation ensures that the next generation is treated fairly and sends a strong signal that I support agricultural and small business families. I look forward to its passage on the House Floor."
"Students coming from family farms and small family businesses should not be unfairly penalized when it comes to applying for federal student aid," said Representative Panetta. "The advancement of our bipartisan Family Farm and Small Business Exemption Act through committee is an important step forward in fixing the Free Application for Federal Student Aid to reflect the realities and limited financial resources that family farmers and small business owners often face. In restoring this 30-year-old standard, we will ensure the federal government is expanding, rather than limiting, academic opportunities for these entrepreneurial families."
On July 1, 2024, the FAFSA Simplification Act is set to alter the federal needs analysis formula and change the Expected Family Contribution (EFC) to the Student Aid Index (SAI). These changes would require families to report the net worth of a family farm or small business on the FAFSA, and therefore include these assets in the calculation of the SAI. Under this new proposed formula, families across the nation would have reported assets that do not accurately reflect their available financial resources. This could result in the loss of financial aid eligibility for students from families that own small businesses or family farms.
The EFC need analysis formula has been in place since 1992 and excludes the net worth of family farms and small businesses as assets. The Family Farm and Small Business Exemption Act would restore the exclusion of the net worth of family farms and small businesses from assets in the calculation of the new SAI.
Click here to view the full text of H.R. 1250, the Family Farm and Small Business Exemption Act.
Click here to view the full text text of H.R. 6951, the College Cost Reduction Act, which will lower college costs for American students and families through substantive reforms in affordability, transparency and accountability in postsecondary education.
(Information courtesy Representative Mann's Office.)