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Own a farm? College tuition just became more expensive

Farm families with an adjusted gross income of more than $60,000 will be subject to an asset test.

January 18, 2024

2 Min Read
Piggy bank with money, calculator and black graduation cap
FINANCIAL AID CHANGE: The loss of a previous “asset test exemption” in college financial aid calculations for families who owned farms or small businesses will prove costly, says Dustin Sherer, director of government affairs for the American Farm Bureau Federation. artisteer/Getty Images

by Dennis Rudat

An attempt to simplify the Free Application for Federal Student Aid process could actually end up making college less affordable for rural Americans, including farm families who may find it more difficult to qualify for financial aid.

Dustin Sherer, director of government affairs for the American Farm Bureau Federation, says an important change to FAFSA came in an omnibus bill passed at the end of 2023.

“It included a smaller bill called the FAFSA Simplification Act,” he says. “The goal of the bill was to shorten the actual FAFSA form.

“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,” he adds. “But that changed with the FAFSA Simplification Act which got rid of the exemption.”

Now farm families with an adjusted gross income over $60,000 will be subject to an asset test, meaning it will cost farm families a lot more money to send their children to college, Sherer says.

Under the old rules, as an example, a farm family with an operation valued at about 1 million dollars would have been expected to pay about $7,600 toward a college 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,” Sherer says.

Additional changes in the methodology used to determine financial aid will compound the problem — namely, a new needs-analysis formula that removes the number of family members in college from the calculation, according to the U.S. Department of Education.

Legislation titled The Family Farm and Small Business Exemption Act has been introduced in both chambers of Congress to correct the error and reinstate the exemption.

“So, if you feel strongly about this issue, I urge you to reach out to your elected officials and ask them to co-sponsor those bills,” Sherer says.

Rudat writes for Michigan Farm Bureau.

Source: MFB

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