Student Financial Aid Simplification Act

To simplify the process for determining the need and eligibility of students for financial assistance under the Higher Education Act of 1965, and for other purposes. 1. Short title This Act may be cited as Student Financial Aid Simplification Act 2. FAFSA Simplification Section 483 of the Higher Education Act of 1965 ( 20 U.S.C. 1090 (1) in subsection (a)— (A) in paragraph (1), by striking The Secretary Subject to subsection (i), the Secretary (B) in paragraph (6), by striking The need Subject to subsection (i), the need (2) by adding at the end the following new subsection: (i) FAFSA Simplification (1) In general Effective with respect to academic year 2014–2015 and each succeeding academic year and notwithstanding subsection (a)(6) and 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 part 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 (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) (A) citizenship or permanent residency status; (B) dependency status; (C) registration for selective service; (D) State of legal residence; (E) family members, including the total number and the number in postsecondary education; (F) secondary school completion status; (G) drug conviction status; (H) completion of a first bachelor’s degree; (I) email address; and (J) 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. . 3. Amendments to the 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 the need and eligibility of a 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) (C) Federal student loans and grants For purposes of this paragraph, the term Federal student financial aid .

Summary: Student Financial Aid Simplification Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 (HEA) to determine students' need and eligibility for title IV assistance, unless they qualify for the simplified needs test or expect no family contribution, by using tax return information regarding those students or their parents that this Act authorizes the Secretary of Education to obtain from the Internal Revenue Service (IRS). Requires those students to submit to the Secretary certain supplementary information not available from the IRS. Requires the Secretary to provide institutions of higher education and states with that tax return information, without charge, for the purposes of processing loan applications and determining need and eligibility for institutional and state financial aid. Amends the Internal Revenue Code to authorize the Secretary of the Treasury to disclose tax return information to the Department of Education regarding taxpayers or their dependents whose need and eligibility for assistance under title IV of the HEA is based in whole or part on their income or their parents' income.