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Please Endorse NSPA's Letter to the U.S. Dept. of Ed.

Tuesday, November 28, 2017  
Posted by: Nick Safko

As a follow up to the “Government Bans FAFSA Data Sharing” session at the 2017 NSPA Annual Conference, we would like to ask for your support and endorsement of the NSPA's letter to the U.S. Department of Education. If you support this issue, please use this link to sign on to the letter for your organization/institution. The deadline to sign on to this letter is December 1st.


NSPA's Letter to the U.S. Dept. of Ed.

December 4, 2017

A. Wayne Johnson
Chief Operating Officer
Federal Student Aid
U.S. Department of Education
830 First Street, NE
Washington, DC 20002

Dear Dr. Johnson:

On behalf of the National Scholarship Providers Association (NSPA), and the undersigned members, I am writing to address our memberships’ concern regarding recent guidance issued by the Privacy Technical Assistance Center (PTAC) at the U.S. Department of Education. This guidance impacts the ability of private scholarship providers to access critically important financial aid data from institutions of higher education for the purposes of awarding, disbursing and administering college scholarships.

The NSPA is a non-profit membership association that brings together private foundations, public charities, colleges and universities, corporate giving programs, and government agencies from across the United States that provide scholarships for higher education. NSPA’s mission is to advance the collective impact of scholarship providers and the scholarships they award. NSPA supports more than 400 member
organizations by offering professional development opportunities, sharing best practices, advancing research about scholarships and engaging in policy advocacy. NSPA members collectively award over 2 billion dollars in scholarships annually.

The U.S. Department of Education’s Privacy and Technical Assistance Center (PTAC) issued guidance earlier this year that prohibits the release of data from the Free Application for Federal Student Aid (FAFSA) to private scholarship providers, even with a student's written authorization. PTAC’s guidance concerning the sharing of FAFSA data with private scholarship providers appears on page 9 of the report,
Guidance on the Use of Financial Aid Information for Program Evaluation and Research, which was published in January 2017:


Can a financial aid office share FAFSA/ISIR data with an outside non-state scholarship organization? No, the HEA only permits disclosure of student aid data for the purposes of application, award, or administration of aid awarded under federal student aid programs, state aid programs, or aid awarded by eligible institutions. Since the scholarship organization is not operating one of these programs, the institution may not disclose students’ FAFSA/ISIR data, including award eligibility information, to the organization. Since the institution is not obtaining student financial aid data directly from a Department system of records, the Privacy Act does not apply to the institution in this scenario.


PTAC recently confirmed this guidance to the National Association of Student Financial Aid Administrators (NASFAA) in September 2017. PTAC has also indicated that the ban on the release of FAFSA data includes derived values, such as the expected family contribution (EFC), demonstrated financial need and award amounts, and applies even if the student has signed a Family Education and Privacy Act (FERPA) waiver.

As a result of this guidance, many colleges and universities have now stopped sharing financial aid award letters and EFC data with private scholarship providers, ending a long-standing partnership that has been in place for decades. The guidance issued by PTAC has begun to negatively impact the ability of entire scholarship providers industry to effectively and efficiently allocate scholarship awards to students based on demonstrated financial need. This is problematic for scholarship providers for several reasons:

  • Scholarship programs that are “last dollar” awards require the student’s financial aid data to determine the student’s remaining financial need after all other financial aid has been awarded.
  • Scholarship programs that aim to eliminate or replace a student’s work and/or loan burden need to see the financial aid data to determine the scholarship amount that is awarded to the student.
  • Scholarship providers that provide counseling to their students need to see the financial aid data to help the students understand their award information, which is not standardized among colleges and often confusing.
  • Scholarship providers need to review the financial aid data to help students optimize the use of their scholarships and minimize scholarship displacement.

Since the statute at 20 U.S.C. 1090(a)(3)(E) allows the U.S. Department of Education to designate other entities as eligible to receive FAFSA data, the National Scholarship Providers Association (NSPA) is petitioning the U.S. Department of Education to designate scholarship providers as eligible to receive FAFSA data – subject to reasonable restrictions, such as limiting to the receipt of FAFSA data to tax exempt, charitable organizations, such as 501(c)(3) and 501(c)(6) organizations, that agree to safeguard the FAFSA data to the same standards required of eligible colleges and universities.


On behalf of the NSPA and our members, we ask for your consideration of these issues, and given their importance, request a meeting so that we might provide further information on the impact of the Department’s guidance. Feel free to contact Julie Kim, NSPA Board of Directors and Chair of the NSAP Research and Advocacy Committee, at (202) 810-0303 if you have any questions on this matter.

Thank you for your attention to this issue.


Larry Sparkman
President, NSPA Board of Directors


      Jackie Bright
      Executive Director


Please use this link to sign on to the letter for your organization/institution.

Thank you to the following organizations for their generous support!

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