A bill to restore the exemption of family farms and small businesses from the definition of assets under title IV of the Higher Education Act of 1965.

2/12/2025, 11:56 AM

Family Farm and Small Business Exemption Act

This bill restores an exemption for certain family farms and small businesses on the Free Application for Federal Student Aid (FAFSA) form. The bill applies to the net worth of (1) a family farm on which the family resides, or (2) a small business with not more than 100 full-time or full-time equivalent employees that is owned and controlled by the family.

Prior to recent changes made to the FAFSA, the net worth of these family farms and small businesses were excluded as assets when calculating a student's financial need to determine federal student aid eligibility. Beginning with the 2024-2025 academic year, the net worth of these farms and businesses are treated as an asset and therefore included in the calculation. This bill restores the exemption to exclude such net worth from the calculation.

Bill 119 s 469, also known as the "Family Farm and Small Business Exemption Restoration Act," aims to reinstate the exemption of family farms and small businesses from being considered assets under title IV of the Higher Education Act of 1965. This exemption was originally put in place to protect these types of assets from being factored into the financial aid calculations for students applying for federal student loans.

The bill recognizes the unique financial situations of family farms and small businesses, which often have assets tied up in land, equipment, and other essential resources. By restoring this exemption, the bill seeks to ensure that students from these backgrounds are not unfairly penalized in the financial aid process due to the value of their family's farm or business.

Supporters of the bill argue that this exemption is crucial for ensuring that students from rural and small business-owning families have equal access to higher education opportunities. They believe that removing this exemption has placed an undue burden on these students and their families, making it more difficult for them to afford college. Opponents of the bill may argue that reinstating this exemption could potentially allow wealthy families to exploit the system by shielding their assets through family farms and small businesses. However, proponents maintain that the bill includes safeguards to prevent abuse of the exemption and ensure that it is only available to those who truly need it. Overall, the Family Farm and Small Business Exemption Restoration Act seeks to level the playing field for students from these backgrounds and ensure that they have the same opportunities for higher education as their peers. The bill is currently under consideration in Congress and has garnered bipartisan support for its efforts to support students from rural and small business-owning families.
Congress
119
Number
S - 469
Introduced on
2025-02-06
# Amendments
0
Sponsors
+5
Cosponsors
+5

Status of Legislation

Bill Introduced
Introduced to House
House to Vote
Introduced to Senate
Senate to Vote

Purpose and Summary

Family Farm and Small Business Exemption Act

This bill restores an exemption for certain family farms and small businesses on the Free Application for Federal Student Aid (FAFSA) form. The bill applies to the net worth of (1) a family farm on which the family resides, or (2) a small business with not more than 100 full-time or full-time equivalent employees that is owned and controlled by the family.

Prior to recent changes made to the FAFSA, the net worth of these family farms and small businesses were excluded as assets when calculating a student's financial need to determine federal student aid eligibility. Beginning with the 2024-2025 academic year, the net worth of these farms and businesses are treated as an asset and therefore included in the calculation. This bill restores the exemption to exclude such net worth from the calculation.

Bill 119 s 469, also known as the "Family Farm and Small Business Exemption Restoration Act," aims to reinstate the exemption of family farms and small businesses from being considered assets under title IV of the Higher Education Act of 1965. This exemption was originally put in place to protect these types of assets from being factored into the financial aid calculations for students applying for federal student loans.

The bill recognizes the unique financial situations of family farms and small businesses, which often have assets tied up in land, equipment, and other essential resources. By restoring this exemption, the bill seeks to ensure that students from these backgrounds are not unfairly penalized in the financial aid process due to the value of their family's farm or business.

Supporters of the bill argue that this exemption is crucial for ensuring that students from rural and small business-owning families have equal access to higher education opportunities. They believe that removing this exemption has placed an undue burden on these students and their families, making it more difficult for them to afford college. Opponents of the bill may argue that reinstating this exemption could potentially allow wealthy families to exploit the system by shielding their assets through family farms and small businesses. However, proponents maintain that the bill includes safeguards to prevent abuse of the exemption and ensure that it is only available to those who truly need it. Overall, the Family Farm and Small Business Exemption Restoration Act seeks to level the playing field for students from these backgrounds and ensure that they have the same opportunities for higher education as their peers. The bill is currently under consideration in Congress and has garnered bipartisan support for its efforts to support students from rural and small business-owning families.
Alternative Names
Official Title as IntroducedA bill to restore the exemption of family farms and small businesses from the definition of assets under title IV of the Higher Education Act of 1965.

Comments

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Chuck Grassley
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Pete Ricketts
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Joni Ernst
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Mike Rounds
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Thom Tillis
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Jerry Moran
Committee:  
Health, Education, Labor, and Pensions

Recent Activity

Latest Summary4/8/2025

Family Farm and Small Business Exemption Act

This bill restores an exemption for certain family farms and small businesses on the Free Application for Federal Student Aid (FAFSA) form. The bill applies to the net worth of (1...

Latest Action2/6/2025
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.