WASHINGTON—In an industry that already contends with slim margins, volatile commodity prices and high input costs, the thought of losing out on a child’s college financial aid is a bitter pill to swallow.
That could be the reality for many farm families as a result of the FAFSA Simplification Act, which goes into effect for the 2024-2025 school year. Included in an omnibus bill passed in late 2023, the act’s goal is to shorten the Free Application for Federal Student Aid form, making it easier for students to qualify for college financial aid.
But in doing so, a longtime exemption was removed—one that many farm families and small business owners relied on to help fund their children’s higher education.
“Previously, there was an exemption in place for families who owned farms or small businesses, so that there was no asset test when those kids were applying for financial aid,” explained Dustin Sherer, government affairs director for the American Farm Bureau Federation. “But that changed with the FAFSA Simplification Act, which got rid of the exemption.”
Now families with an adjusted gross income of over $60,000 will be subject to the asset test, making it more expensive for farm families and small business owners to send their children to college.
Under the old rules, Sherer said, if a family owns a farm valued around $1 million, they would have been expected to pay about $7,600 toward a child’s education.
“Under the new rules, that same family would be responsible for more than $41,000, which essentially would take you out of the Pell Grant and federal and state aid programs and force most people to take out student loans,” he explained.
Trying to reinstate the exemption, members of Congress introduced The Family Farm and Small Business Exemption Act in both the House and Senate.
“Virginia Farm Bureau supports this bipartisan legislation that would ensure that students coming from family farms or small businesses would not be unfairly penalized in the FAFSA process,” said Ben Rowe, VFBF director of national affairs. “For 30 years, the FAFSA procedure recognized that family farmers and small business owners pour their livelihoods into building up their businesses but often 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.”
Not qualifying for financial aid is another barrier that could impede college access for rural families—a population that already experiences low rates of higher education. According to the Lumina Foundation, while rural students graduate from high school at rates higher than the national average, they’re less likely to attend college than their suburban and urban peers.
Families concerned about the FAFSA changes can contact their legislators and encourage them to support The Family Farm and Small Business Exemption Act.
Farm Bureau Virginia