The FUTURE Act or the Fostering Undergraduate Talent by Unlocking Resources for Education Act is a bipartisan bill proposed and approved by the House of Representatives and the Senate, and subsequently ratified as law by president Donald Trump in December 19, 2019.
The new law, permanently provides the Education Department, $255 million in annual mandatory funding for Minority-Serving Institutions (MSIs), which previously was made available annually for only up to two years.
Starting 2020, the permanent MSI funding denotes that related institutions will receive a continuing stream of financial aid to award to undergraduates taking up Science, Technology, Engineering and Mathematics (STEM) education.
The Future Act Also Simplifies the FAFSA
Corollary to the approval of the permanent MSI financial aid funding, the FUTURE Act also allows direct data sharing between the Education Department (ED) and the Internal Revenue Service.
The data-sharing system intends to streamline and simplify the processing of financial aid application or FAFSA. It replaced the previous system in which student-applicants or their parents have to retrieve their tax information from the IRS, and then include such information in the FAFSA.
The FAFSA simplification, through the data-sharing system suggests that verification of tax return information will be undertaken by authorized ED officials, as they will have access to tax information data shared by the IRS. The authorized ED official will then use the accessed data in determining the eligibility of the applicant for the amount applied for as Federal student financial aid.
Since the existing Internal Revenue Code (IRC) does not permit the IRS to share taxpayer information with the ED, the FUTURE Act, also includes an amendment to section 6103(l) of the IRC.
The amendment will have the IRS and the ED use a Data Retrieval Tool (DRT) as a means of sharing and accessing certain IRS tax information.
Use of the Data Retrieval Tool
The allowable information available and accessible via the DRT will include the applicant’s or parent-applicant’s taxpayer filing status, indicating whether the taxpayer concerned had filed a tax return; and whether the applicant filed a lettered tax schedule.
The data-sharing approach and the DRT also aim to improve the accuracy of information related to the payment of federal student aid programs. Under normal circumstances, it presumably removes the risks of fraud related to income-driven repayment plans applicable to self-certified income; as well as reduces the occurrences of improper student debt payments.
In light of the improved accuracy that the IRS-ED data sharing system will bring to the Federal financial aid programs, Senate leaders are confident that the federal government can pay for permanent MSI funding; using as funding resource, the I2.8 billion savings estimated by the Congressional Budget Office.