SB 54 – FAFSA Awards
Authored by Sen. Jean Leising (R-Oldenburg); co-authored by Sen. Stacey Donato (R-Logansport), Sen. Dennis Kruse (R-Auburn) and Sen. Eddie Melton (D-Gary); co-sponsored by Rep. Bob Behning (R-Indianapolis) and Rep. Jeff Thompson (R-Lizton)

Provides that a school corporation may receive an improvement award for increasing the percentage of its high school seniors who complete the Free Application for Federal Student Aid (FAFSA) beginning with the 2022-2023 school year.

Chamber position: Support

The latest: Passed by House Ways and Means Committee 21-1; now moves on to consideration by the full House.

As introduced, SB 54 would have made completing the FAFSA the default expectation for Indiana high school seniors, albeit with multiple opt-out options that could be exercised by a student’s parent, principal or counselor. As amended by House lawmakers, the bill has taken a pay-for-performance approach that removes the requirement but rewards schools that increase their FAFSA filling rate by at least 5% starting with the 2022-23 academic year (the same year that the FAFSA will be dramatically simplified due to recent action by Congress). In the bill’s current form, the financial award would be $500 per student adjusted by a school’s complexity index, the formula that channels extra state dollars to schools based on their proportion of low-income and other at-risk students who may require additional resources.

Here is an example of how the incentive formula would work under this amendment: School Corporation X increased its FAFSA completion rate from 25% to 26.25%. This is a 5% year-over-year increase; therefore, School Corporation X would qualify for the FAFSA Completion Incentive Award. School Corporation X has a complexity index of 0.18. The adjusted per student award would equal (0.18 x 500)=$90. School Corporation X had 75 students complete the FAFSA, so the school’s total FAFSA Completion Incentive Award would equal (75 x $90) = $6,750.

Indiana Chamber action/commentary: The Chamber views increasing Indiana’s FAFSA completion rate as a key lever for boosting workforce development and breaking the cycle of generational poverty. While the Chamber maintains that this issue is about setting clear expectations for students/schools rather than spending taxpayer money, we appreciate that more state lawmakers are making the connection between increasing FAFSA completion and the state’s education and economic development imperatives. As noted during committee testimony this week, it’s no coincidence that Indiana’s national rankings for FAFSA completion (34th), education attainment (35th) and per capita income (38th) are nearly the same.

Completing the FAFSA qualifies students for a variety of merit- and need-based financial aid opportunities available from the state and other sources, including Indiana’s Next Level Jobs program that offers more than 150 tuition-free, short-term training options in the state’s highest-demand job sectors (advanced manufacturing, health care, IT, etc.) These industry-aligned training programs are available to all Hoosier high school graduates regardless of family income, but they must file the FAFSA to be eligible.

Resource: Jason Bearce at (317) 264-6880 or email: jbearce@indianachamber.com