The bipartisan bill aims to protect farm assets in student aid calculations. The Family Farm and Small Business Exemption Act seeks to restore exemptions for farmland and equipment from FAFSA forms. With 79 co-sponsors, the bill addresses concerns about recent changes that disadvantage farm families. How might this impact your future?
Summary:
The Family Farm and Small Business Exemption Act, introduced on February 7, 2025, aims to change recent FAFSA rules that count farm and small business assets when deciding federal student aid. Co-sponsored by 79 lawmakers, this bipartisan bill wants to keep farmland, machinery, and small business assets off the FAFSA form. This is important for farm families that have faced income drops since 2022, helping them access student aid without selling essential items. Many groups, like the American Farm Bureau Federation, support this, but there are concerns about fairness in federal assistance. Regions like Wisconsin, which is strong in agriculture, could benefit as it lessens financial worry when seeking higher education.
Key Takeaways:
- Legislation was introduced to prevent farm and small business assets from affecting FAFSA calculations.
- The bill is supported by a bipartisan group of 79 co-sponsors, showing strong political backing.
- Highlights financial hardships farm families face, emphasizing the nearly 25% drop in net farm income since 2022.
- The act aims to provide financial relief and protect essential farm assets from being considered liquid resources.
- Intended to facilitate generational continuity in farming by improving educational access for farm-family students.
- Widely endorsed by agricultural organizations, reflecting broad industry support.
- Some educational experts caution about the risks of potential inequities in the federal aid system.
- Impacts on Wisconsin’s dairy industry are projected to be significant, given the state’s sizable dairy operations.
Farm and small business assets should be exempt from declaration on the Free Application for Federal Student Aid, FAFSA for short,” declared Senator Chuck Grassley (R-IA), highlighting the core issue addressed by the newly introduced Family Farm and Small Business Exemption Act.
On February 7, 2025, a bipartisan group of lawmakers introduced legislation in both chambers of Congress to safeguard farm families‘ interests in federal student aid determinations. The bill aims to restore long-standing exemptions that prevent farm and small business assets from being counted as part of a family’s net worth when calculating eligibility for federal student aid.
Key Provisions and Support
The legislation seeks to amend the FAFSA Simplification Act by exempting farmland, machinery, operational materials, and small businesses with fewer than 100 employees from being declared on the Free Application for Federal Student Aid (FAFSA) form. This move responds to changes implemented in July 2024 that altered how federal student aid is calculated, potentially disadvantaging farm families and small business owners.
In the House, the bill is led by Representatives Tracey Mann (R-KS) and Jimmy Panetta (D-CA), with support from House Agriculture Committee leaders. The Senate version is sponsored by Senators Joni Ernst (R-IA) and Michael Bennet (D-CO). The bill has garnered significant bipartisan support with 79 co-sponsors in the House, including Representative Mike Kelly (R-PA).
Impact on Farm Families
For farm families, this legislation addresses several critical concerns:
- Financial Relief: Rep. Mann highlighted that net farm income has decreased by nearly 25% since 2022, making it challenging for these families to manage rising costs. The exemption would provide much-needed relief for farm families seeking higher education opportunities.
- Asset Protection: The bill recognizes that farm assets, while valuable, are essential for business operations and should not be considered liquid resources for student aid calculations.
- Generational Continuity: By making higher education more accessible to farm families, the bill supports the continuity of farming knowledge and skills, ensuring the next generation can pursue education without jeopardizing the family farm’s future.
Industry Perspective
The legislation has received support from various agricultural and educational organizations, including the American Farm Bureau Federation, the National Milk Producers Federation, and the Association of Public & Land-Grant Universities.
Jim Mulhern, President and CEO of the National Milk Producers Federation, stated on February 10, 2025, “This legislation is crucial for the future of our dairy industry. It ensures that the next generation of dairy farmers can pursue higher education without jeopardizing their family’s livelihood.”
However, some education policy experts have raised concerns. Dr. Robert Kelchen, Professor of Higher Education at the University of Tennessee, noted on February 12, 2025, “While the intent is good, we must ensure that this exemption doesn’t create unintended inequities in the federal aid system.”
Regional Impact
In Wisconsin, America’s Dairyland, the bill could have significant implications. As of January 2025, the state had 6,317 dairy herds, according to the Wisconsin Department of Agriculture, Trade, and Consumer Protection. Many of these family-owned operations could benefit from the proposed legislation.
Next Steps for Farm Families
- Stay informed about the bill’s progress through industry publications and your representatives’ communications.
- Contact your local representatives to express your views on this legislation.
- Discuss potential impacts with your financial advisor to prepare for changes in student aid calculations.
Data Table: Net Farm Income Trends
| Year | Net Farm Income (Billion USD) | Percentage Change |
|---|---|---|
| 2022 | 183.0 | – |
| 2023 | 156.2 | -14.6% |
| 2024 | 137.8 | -11.8% |
Source: USDA Economic Research Service, February 2025 Farm Income Forecast
How would this bill affect your farm operation’s plans for the future? Share your thoughts in the comments section below.
Learn more:
- Lawmakers Hopeful Yet Cautious: Future of the 2024 Farm Bill Hangs in the Balance
- Major Updates in the 2024 House Farm Bill: What Farmers Need to Know
- Historic $2 Billion USDA Grant to Empower Black and Minority Farmers of Years of Discrimination
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