Student Financial Aid Simplification Act

Summary: Student Financial Aid Simplification Act  This bill amends title IV (Student Assistance) of the Higher Education Act of 1965 to determine a student's financial need and federal financial aid eligibility by using tax return information, unless such student qualifies for the simplified needs test or a zero expected family contribution.  It amends the Internal Revenue Code to authorize the Internal Revenue Service (IRS) to disclose certain tax return information to the Department of Education (ED). Students must submit to ED certain supplemental information not available from the IRS.  The bill requires ED to provide such tax return information to states and institutions of higher education, without charge, for use processing loan applications and determining institutional and state financial aid awards.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Financial Aid Simplification 
Act''.

SEC. 2. FAFSA SIMPLIFICATION.

    Section 483 of the Higher Education Act of 1965 (20 U.S.C. 1090) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``The Secretary'' 
                and inserting ``Subject to subsection (i), the 
                Secretary''; and
                    (B) in paragraph (6), by striking ``The need'' and 
                inserting ``Subject to subsection (i), the need''; and
            (2) by adding at the end the following new subsection:
    ``(i) FAFSA Simplification.--
            ``(1) In general.--Beginning academic year 2017-2018 and 
        notwithstanding subsection (a)(6) or any other provision of 
        this section, with respect to a student who is a taxpayer or a 
        dependent of a taxpayer and who does not meet the requirements 
        of subsection (b) or (c) of section 479, the need and 
        eligibility of such student for financial assistance under 
        parts A through E (other than subpart 4 of part A) may be 
        determined only by--
                    ``(A) authorizing the Secretary to obtain from the 
                Internal Revenue Service income data, and other 
                taxpayer data needed to compute an expected family 
                contribution for the student, from two years prior to 
                the student's planned enrollment date; and
                    ``(B) submitting to the Secretary the supplemental 
                information described in paragraph (3).
            ``(2) Authorization under the irc and distribution of 
        data.--Returns and return information (as defined in section 
        6103 of the Internal Revenue Code of 1986) may be obtained 
        under paragraph (1)(A) only to the extent authorized by section 
        6103(l)(23) of such Code, except that institutions of higher 
        education and States shall receive, without charge, such 
        information from the Secretary for the purposes of processing 
        loan applications and determining need and eligibility for 
        institutional and State financial aid awards.
            ``(3) Supplemental information.--Each student described in 
        paragraph (1) who is applying for financial assistance under 
        parts A through E (other than under subpart 4 of part A) shall 
        submit to the Secretary at such time and in such manner as 
        required by the Secretary, any information that is needed to 
        determine the student's need and eligibility for such financial 
        assistance or to administer the programs under this title, but 
        that is not available from the Internal Revenue Service to the 
        extent authorized by section 6103(l)(23) of the Internal 
        Revenue Code of 1986, including information with respect to the 
        student's--
                    ``(A) citizenship or permanent residency status;
                    ``(B) dependency status;
                    ``(C) registration for selective service;
                    ``(D) State and length of legal residence;
                    ``(E) family members, including the total number 
                and the number in postsecondary education;
                    ``(F) secondary school completion status;
                    ``(G) completion of a first bachelor's degree;
                    ``(H) email address; and
                    ``(I) institution or institutions of higher 
                education in which the student is enrolled or to which 
                the student is applying for admission.
            ``(4) Regulations.--
                    ``(A) In general.--The Secretary shall prescribe 
                such regulations as may be necessary to carry out this 
                subsection.
                    ``(B) Inapplicability of rulemaking requirements.--
                Sections 482(c) and 492 shall not apply to the 
                regulations required by this paragraph.''.

SEC. 3. AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.

    Section 6103(l) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph:
            ``(23) Disclosure of return information to determine need 
        and eligibility of student for federal student financial aid.--
                    ``(A) In general.--The Secretary may, upon written 
                request from the Secretary of Education, disclose to 
                officers and employees of the Department of Education 
                return information with respect to a taxpayer or a 
                dependent of a taxpayer who may be eligible for Federal 
                student financial aid and whose need and eligibility 
                for such aid is based in whole or in part on the 
                taxpayer's income or the income of the parents of the 
                dependent. Such return information shall be limited 
                to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer;
                            ``(ii) the filing status of such taxpayer;
                            ``(iii) the adjusted gross income of such 
                        taxpayer; and
                            ``(iv) any other data of such taxpayer 
                        necessary to determine the expected family 
                        contribution (within the meaning of part F of 
                        title IV of the Higher Education Act of 1965 
                        (20 U.S.C. 1087kk et seq.)) of such taxpayer or 
                        the dependent of such taxpayer, as applicable.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Department of Education only for the purposes 
                of, and to the extent necessary in, processing the 
                student loan application, and establishing need and 
                eligibility for Federal student financial aid, of a 
                taxpayer or a dependent of a taxpayer.
                    ``(C) Federal student loans and grants.--For 
                purposes of this paragraph, the term `Federal student 
                financial aid' means financial assistance under parts A 
                through E (other than under subpart 4 of part A) of 
                title IV of the Higher Education Act of 1965 (20 U.S.C. 
                1070 et seq.).''.