To begin the process of simplifying the Federal student financial aid process, making it easier and more understandable for students and families to participate in Federal student financial aid programs.

July 25, 2003

Mr. MCKEON (for himself, Mr. EMANUEL, Mr. BOEHNER, Mr. KILDEE, Mr. PETRI, Ms. WOOLSEY, Mr. KELLER, Mr. TIERNEY, Mr. GREENWOOD, Mrs. DAVIS of California, Mr. GRIJALVA, Mr. BISHOP of New York, Mr. KUCINICH, Mr. OSBORNE, Mr. HOLT, Mr. DAVIS of Illinois, Mr. ISAKSON, Mr. BALLENGER, Mr. SOUDER, Mr. CUNNINGHAM, Mr. UPTON, Mr. BLUNT, and Mr. EHLERS) introduced the following bill; which was referred to the Committee on Education and the Workforce

To begin the process of simplifying the Federal student financial aid process, making it easier and more understandable for students and families to participate in Federal student financial aid programs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SEC. 1. SHORT TITLE; REFERENCE.

(a) SHORT TITLE- This Act may be cited as the `Financial Aid Simplification Act'.

(b) REFERENCE- Whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

SEC. 2. SIMPLIFICATION OF THE FREE APPLICATION FOR FEDERAL STUDENT AID (FASFA).

Section 491 (20 U.S.C. 1098) is amended--

(1) by redesignating subsection (k) as subsection (l); and

(2) by inserting after subsection (j) the following new subsection:

`(k) SPECIAL STUDY OF SIMPLIFICATION OF NEED ANALYSIS AND APPLICATION FOR TITLE IV AID-

`(1) STUDY REQUIRED- The Advisory Committee shall conduct a thorough study of the feasibility of simplifying the need analysis methodology for all Federal student financial assistance programs and the process of applying for such assistance.

`(2) REQUIRED SUBJECTS OF STUDY- In performing the study, the Advisory Committee shall, at a minimum, examine the following:

`(A) whether the methodology used to calculate the expected family contribution can be simplified without significant adverse effects on program intent, costs, integrity, delivery, and distribution of awards;

`(B) whether the number of data elements, and, accordingly, the number and complexity of questions asked of students and families, used to calculate the expected family contribution can be reduced without such adverse effects;

`(C) whether the procedures for determining such data elements, including determining and updating offsets and allowances, is the most efficient, effective, and fair means to determine a family's available income and assets;

`(D) whether the nature and timing of application required in section 483 (a)(1), eligibility and award determination, financial aid processing, and funds delivery can be streamlined further for students and families, institutions, and States;

`(E) whether it is feasible to allow students to complete limited sections of the financial aid application that only apply to their specific circumstances and the State in which they reside;

`(F) whether a widely disseminated printed form, or the use of an Internet or other electronic means, can be developed to notify individuals of an estimation of their approximate eligibility for grant, work-study and loan assistance upon completion and verification of the simplified application form; and

`(G) whether information provided on other Federal forms (such as the form applying for supplemental security income under title XVI of the Social Security Act, the form for applying for food stamps under the Food Stamp Act of 1977, and the schedule for applying for the earned income tax credit under section 32 of the Internal Revenue Code of 1986) that are designed to determine eligibility for various Federal need-based assistance programs could be used to qualify potential students for the simplified needs test.

`(3) ADDITIONAL CONSIDERATIONS- In conducting the feasibility study, the Advisory Committee's primary objective under this subsection shall be simplifying the financial aid application forms and process and obtaining a substantial reduction in the number of required data items. In carrying out that objective, the Advisory Committee shall pay special attention to the needs of low-income and moderate-income students and families.

`(4) CONSULTATION-

`(A) IN GENERAL- The Advisory Committee shall consult with a broad range of interested parties in higher education, including parents and students, high school guidance counselors, financial aid and other campus administrators, and administrators of intervention and outreach programs.

`(B) FORMS DESIGN EXPERT- With the goal of making significant changes to the form to make the questions more easily understandable, the Advisory Committee shall consult a forms design expert to ensure that the revised application form is easily readable and understood by parents, students and other members of the public.

`(C) CONGRESSIONAL CONSULTATION- The Advisory Committee shall consult on a regular basis with the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor and Pensions of the Senate in carrying out the feasibility study required by this subsection.

`(D) DEPARTMENTAL CONSULTATION- The Secretary of Education shall provide such assistance to the Advisory Committee as is requested and practicable in conducting the study required by this subsection.

`(5) REPORT- The Advisory Committee shall, not later than 2 years after the date of enactment of the Financial Aid Simplification Act, prepare and submit a report on the study required by this section to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor and Pensions of the Senate.

`(6) IMPLEMENTATION- Within 1 year of submission of such report, the Secretary of Education shall consult with the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor and Pensions of the Senate and shall subsequently initiate a redesign of the form required by the Secretary under section 483. Such redesign shall include the testing of alternative simplified versions of the free Federal form. The Secretary shall report on the progress of these efforts to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor and Pensions of the Senate not later than one year after receipt of the Advisory Committee report required by this section.'.

SEC. 3. SIMPLIFIED NEEDS TEST IMPROVEMENTS.

Section 479 (20 U.S.C. 1087ss) is amended--

(1) by striking clause (i) of subsection (b)(1)(A) and inserting the following:

`(i) the student's parents file a form described in paragraph (3) or certify that they are not required to file an income tax return, or the student's parents or the student received benefits under a means-tested Federal benefit program;';

(2) by striking clause (i) of subsection (b)(1)(B) and inserting the following:

`(i) the student (and the student's spouse, if any) files a form described in paragraph (3) or certifies that the student (and the student's spouse, if any) is not required to file an income tax return, or the student (or the student's spouse, if any) received benefits under a means-tested Federal benefit program;';

(3) by striking subparagraph (A) of subsection (c)(1) and inserting the following:

`(A) the student's parents file a form described in subsection (b)(3) or certify that they are not required to file an income tax return, or the student's parents or the student received benefits under a means-tested Federal benefit program;';

(4) by striking subparagraph (A) of subsection (c)(2) and inserting the following:

`(A) the student (and the student's spouse, if any) files a form described in subsection (b)(3) or certifies that the student (and the student's spouse, if any) is not required to file an income tax return, or the student (or the student's spouse, if any) received benefits under a means-tested Federal benefit program;'; and

(5) by adding at the end the following new subsection:

`(d) DEFINITION OF MEANS-TESTED FEDERAL BENEFIT PROGRAM- For purposes of this section, the term `means-tested Federal benefit program' means a mandatory spending program of the Federal Government in which eligibility for the programs' benefits, or the amount of such benefits, or both, are determined on the basis of income or resources of the individual or family seeking the benefit, and includes the supplemental security income program under title XVI of the Social Security, the food stamp program under the Food Stamp Act of 1977, and the free and reduced price school lunch program under the Richard B. Russell National School Lunch Act.'.

SEC. 4. EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY FOR PELL GRANTS.

Sec 483(a) (20 U.S.C. 1090(a)) is amended by adding at the end the following new paragraph:

`(8) EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY FOR PELL GRANTS- The Secretary shall make special efforts, in conjunction with State efforts, to notify students and their parents who qualify for a free lunch under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.), the Food Stamps program, or such programs as the Secretary shall determine, of their potential eligibility for a maximum Pell Grant, and shall disseminate such informational materials as the Secretary deems necessary.'.

SEC. 5. IMPLEMENTATION.

Sections 482(c) and 492 of the Higher Education Act of 1965 (20 U.S.C. 1089(c), 1098a) shall not apply to the regulations implementing the amendments made by section 2 of this Act.

END