The U.S. Department of Education (ED) has designated the U.S. Treasury (Treasury) under section 483(a)(3)(E) of the Higher Education Act of 1965, as amended (HEA), as an entity that may use Free Application for Federal Student Aid (FAFSA®) data. Under Section 483(a)(3)(E) of the HEA, data collected through the FAFSA may only be used for the application, award, and administration of HEA, Title IV program aid, State aid, or aid awarded by eligible institutions or entities designated by ED.
U.S. Treasury (Treasury) Designation
The American Rescue Plan (Pub. L. 117-2, § 9011) temporarily increased and expanded the Child Tax Credit to reduce child poverty. However, families that are not ordinarily required to file taxes must sign up using an IRS non-filer tool in order to receive the benefit.
In addition, starting in March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided Economic Impact Payments of up to $1,200 per eligible adult and $500 per qualifying child under age 17. The payments were reduced for individuals with adjusted gross income (AGI) greater than $75,000 ($150,000 for married couples filing a joint return). The COVID-related Tax Relief Act of 2020 authorized additional payments of up to $600 per eligible adult and up to $600 for each qualifying child under age 17. The AGI thresholds at which the payments began to be reduced were the same as the CARES Act. The American Rescue Plan provided Economic Impact Payments of up to $1,400 for eligible individuals or $2,800 for married couples filing jointly, plus $1,400 for each qualifying dependent, including adult dependents.
In order to receive these Economic Impact Payments, an individual who earned income too low to file taxes or who may have been a dependent student but is now considered independent will have to file taxes in order to receive the benefit.
This designation permits institutions of higher education (IHEs) to use FAFSA data to aid in the administration of the Child Tax Credit and Economic Impact Payments. However, institutions should limit FAFSA data use to only the necessary data and method required to inform their student population and, if needed, verify eligibility for the Child Tax Credit or Economic Impact Payment. ED encourages IHEs to coordinate with campus stakeholders to inform their student population of these benefits during the COVID-19 emergency. Institutions may utilize a FAFSA applicant’s email address and other relevant information to target and notify affected students who may be eligible for these benefits.
Notwithstanding the Secretary of Education’s authority to designate entities under 483(a)(3)(e), such designations are not otherwise intended to alter, amend, or rescind any current statutory or regulatory authority now in effect. The content of this announcement is to inform the community of flexibilities afforded to institutions of higher education under the applicable aforementioned designations and will sunset at the conclusion of each respective benefit program as indicated by law and/or at the end of the federally declared COVID-19 emergency.
Institutions are reminded of their statutory and regulatory responsibilities to protect FAFSA data, including Personally Identifiable Information (PII). Institutions should exercise caution, to the fullest extent possible, when using FAFSA data to inform their student population and/or aid in verifying eligibility efforts for such programs. Unless otherwise noted above, institutions are required to adhere Section 483(a)(3)(e) of the HEA, as amended regarding the permissibility of FAFSA data use to the application, award, and administration of Title IV programs.