Washington, D.C. – Today, U.S. Representatives Tracey Mann (R-KS) and Jimmy Panetta (D-CA) led 27 of their colleagues in introducing the Family Farm and Small Business Exemption Act, which would restore exemptions for family farms and small businesses under the Free Application for Federal Student Aid (FAFSA).
“Family farms and small businesses exemplify the American dream,” said Rep. Mann. “When young people from these families are applying for higher education financial aid, the assets tied up in the family farm or the small business should not count against them. The Family Farm and Small Business Exemption Act would ensure that students of owners of family farms or small businesses would not be unfairly penalized in the FAFSA process. For more than 30 years, these exemptions have been the standard, and it’s time to restore them before a new analysis formula goes into effect. This is one measurable way for Congress to support the families who help America thrive.”
“Students coming from family farms and small family businesses are currently unfairly penalized when it comes to applying for federal student aid, ultimately limiting their academic opportunities,” said Rep. Panetta. “I’m proud to introduce the Family Farm and Small Business Exemption Act to recognize the reality of so many family farmers and small business owners who’ve poured their livelihoods into building up their businesses but live with limited financial resources. Restoring this 30-year-old standard is about fairness and supporting families who continue the entrepreneurial spirit of our country.”
“I applaud and support the legislation introduced by Rep. Tracey Mann that would continue the longstanding practice of excluding farm and small business assets in the calculation used as part of the Free Application for Federal Student Aid,” said Joe Newland, Kansas Farm Bureau President. “Growing food is a capital-intensive, low-margin business, and farmers and ranchers should never be asked to borrow from their livelihood to pay for their child’s education.”
Beginning 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.