Iowa Senators Chuck Grassley and Joni Ernst are co-sponsoring a bill to make sure small business owners and farmers don’t have to list land and equipment as assets on their child’s Free Application for Federal Student Aid or FAFSA.
“They happen to be land and asset rich, but cash poor,” Grassley said. “Their wealth is tied up in assets that can’t be easily sold to pay for college.”
Calculations on the FAFSA are meant to determine how much a parent is able to contribute toward their child’s education, but Grassley said row crop farmers, in particular, have a negative cash flow right now.
“This legislation protects farm families’ access to higher education,” Grassley said during a conference all with Iowa reporters.
Congress passed a law that directed the U.S. Department of Education to make the FAFSA easier and quicker to fill out. Biden Administration rules for the current school year required parents who owned farmland as an investment to list it as an asset, but parents who own land they’re farming on had to list their land as an asset, too. Ernst has said it meant farm kids got less federal aid for college.
“Their folks have farm ground, they have equipment, so they’re asset rich, but they are cash poor,” Ernst said last year, “and these ag families should not be forced to sell their farm so that their children can go to college.”
The policy was reversed last year, for the financial aid application forms for the 2025-26 school year. Grassley said the bill makes the policy permanent, so a “regulation writer” in the federal government can’t change it back and “screwing the family farmers and small business people again.”
Seven Republican Senators and Colorado Senator Michael Bennet — a Democrat — have joined Iowa’s two Republican senators as co-sponsors of the Family Farm and Small Business Exemption Act.