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How a FAFSA rule change could cut financial aid to family farmers

 A man studies alone at a desk in a classroom. A schedule is posted on the white board behind him.
Jeswin Thomas
Congress passed the FAFSA Simplification Act in 2020 to streamline the application process and increase eligibility for federal Pell Grants. But some experts worry rural students are left out of the equation.

When congress passed the FAFSA Simplification Act in 2020, its goal was to make the FAFSA – the Free Application for Federal Student Aid – shorter and easier to complete, while increasing eligibility for federal Pell Grants.

But for a small subset of people, it could do the opposite.

The act, which goes into effect next school year, eliminates an exemption for family farmers and small businesses.

Because those families will be required to report the value of their farm or business, they are likely to receive less financial aid.

One study from the Iowa College Student Aid Commission estimates affected families could be expected to contribute five times more than they did before the change.

A student whose family’s gross income is $60,000 and whose farm is worth $1 million, for example, is currently expected to contribute $7,626 each year. But the study shows, under the updated FAFSA formula, their expected contribution will increase to $41,056.

Frank Ballmann, the federal relations director for the National Association of State Student Grant and Aid Programs, said that isn’t fair for rural college students.

“Unlike a savings account or stocks or mutual funds, you can't sell 5% of your farm to pay for college,” he said. “It's not a liquid asset. And in the case of a small family farmer, it's unrealistic to expect them to try and sell their farm because guess what? If they sell the farm, they have no income.”

Rural students are already less likely than their urban and suburban peers to attend college.

Experts like Ballmann worry this act will be a further deterrent.

"We should be doing more to encourage rural students to be going to college, not making it more difficult.”
Frank Ballmann

“It's already challenging enough for rural students to find a place to go to college because a lot of them live in what we call education deserts,” he said. “There are no colleges or maybe only one college within a reasonable commuting range. So we should be doing more to encourage rural students to be going to college, not making it more difficult.”

For Ballmann, this issue is personal.

His dad grew up on a farm in Kentucky as one of 13 kids. His father and his aunt were the only two to attend college after serving in World War II.

That decision changed the trajectory of his dad’s life and the lives of his kids, Ballmann said.

“Now I went to college and now I made something of myself with my Bachelor's degree,” he said. “Preserving the tradition or at least preserving the pathway and the opportunity is, I think, an essential service to all rural students and families.”

Ballmann and the National Association of State Student Grant and Aid Programs are lobbying to keep the exemption for family farms and small businesses.

They have some support in Congress. Senators Joni Ernst, R-Iowa, and Jon Tester, D-Mont., introduced a bipartisan bill in April to keep the exemption. It has since been referred to the House Committee on Education and the Workforce.

But Ballmann worries it’ll be tough to pass the bill by the end of the year in the face of some Democratic opposition.

The FAFSA Simplification Act is set to go into effect with the 2024-25 school year.

Unless it’s amended before then, it has the potential to affect thousands of rural Ohio families. Of the 77,000 farms in the state, about 90 percent are owned by families or individuals.

“Right now, it's easier to count the number of people who are not impacted,” Ballmann said. “And you certainly don't want to exclude 90 to 95% of farmers’ children, just to make sure you don't give out a few Pell Grants to people who don't need it.”

Erin Gottsacker is a reporter for The Ohio Newsroom. She most recently reported for WXPR Public Radio in the Northwoods of Wisconsin.