Bipartisan legislation aims to reshape federal student aid guidelines, addressing the challenges faced by students from farming and small business backgrounds. Senators Joni Ernst (R-IA) and Michael Bennet (D-CO), along with Representative Tracey Mann (R-KS), have introduced the Family Farm and Small Business Exemption Act. This act seeks to amend the Free Application for Federal Student Aid (FAFSA) to better reflect the financial realities of these families.
Currently, the FAFSA's calculation of family contributions often misinterprets the nature of farm and small business assets. Unlike more liquid assets, these holdings are not readily convertible to cash for educational expenses. The proposed legislation aims to rectify this by exempting farms and small businesses from the Higher Education Act of 1965 calculations, mirroring the original exemptions for farmland, equipment, and businesses with under 100 employees.
Senator Ernst emphasized that no family should be forced to liquidate their farm or business to fund a college education. She highlighted the importance of financial aid for rural students and her commitment to ensuring fair access to education for Iowa families. This initiative follows a February 2024 letter to Education Secretary Miguel Cardona from Senator Ernst, Senator Charles Grassley (R-IA), and other lawmakers expressing concerns about the FAFSA's impact on agricultural families, particularly regarding Question 22, which asks for the net worth of family business operations. The letter argued that this question fails to accurately capture the fluctuating nature of farm income.
Representative Mann, whose district includes a significant number of farming families, stressed the financial pressures they face, citing a nearly 25% decrease in net farm income since 2022. He argued that assets tied to family farms or small businesses should not be a barrier to financial aid. The goal, he explained, is to simplify the process for these families and ensure equal opportunities for students pursuing higher education, regardless of their parents' profession.
