# Plain Language Summary: Family Farm and Small Business Exemption Act

This bill changes how the federal government calculates financial aid for college students whose families own farms or small businesses. Right now, when families apply for federal student aid, the government counts the value of family farms and small business assets to determine how much aid a student can receive. This bill would exclude those assets from that calculation, meaning families with farms or small businesses would qualify for more financial aid than they currently do.

The specific change affects how the government measures a family's ability to pay for college. Currently, if your parents own a family farm where they live or operate a small business with up to 100 employees, the value of that farm or business gets counted as an asset when determining your eligibility for federal student loans and grants. Under this bill, those assets would be completely excluded from the calculation. So a family that owns a 500-acre farm or a small manufacturing business with 75 employees would have those assets ignored when the government figures out how much aid their children qualify for.

This would primarily benefit students from farming families and families who own small businesses, potentially making them eligible for more federal grants and lower-interest federal loans. The change would take effect for the 2025-2026 school year or whenever the bill is enacted, applying to all future financial aid applications. The bill has bipartisan support, with sponsors from both rural and urban areas, suggesting it's viewed as a way to help family-owned agricultural and business operations that might otherwise struggle to afford their children's college education.

Family Farm and Small Business Exemption Act

Mann, Tracey

Family Farm and Small Business Exemption ActThis 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.