Schools, state agencies, and contractors all have a role in safeguarding student and parent data received as a part of the federal student aid process.
In a comprehensive Dear Colleague Letter (DCL) published on September 30, 2025, the Department of Education addresses guidance on the permitted access, disclosure, and use of Federal Tax Information (FTI), FAFSA data, and non-FAFSA data. The Department said the DCL “is intended only to provide clarity to the public regarding existing requirements under law or agency policies.”
The DCL provides a definition of each:
- FAFSA data – All information entered on the application or transferred from the previous year’s application. It also includes most data that the FAFSA Processing System (FPS) derives from the application, such as Federal Pell Grant eligibility and the Student Aid Index (SAI), and is what appears on the ISIR that is not FTI.
- FTI – All the data received from the IRS via the Direct Data Exchange process as well as data that the FPS directly derives that could be used to reverse calculate FTI, such as the student or parent payroll tax allowance. The DCL also points out that not all tax data are FTI; manually entered tax data, such as those from a foreign tax return or from an IRS return that was not eligible for the data exchange, are considered FAFSA data. or edit data transferred via the FA-DDX.
- Non-FAFSA, institutional, or school data – These are the terms for information that is originated by schools or other entities and include total aid awarded, grant and loan receipt and amounts, and unmet financial need. In this context, the IRC governs the use and access of FTI, while the HEA and the Privacy Act cover FAFSA data use as well as FTI.
The DCL also addressed the following topics:
- FTI and FAFSA Data Use Without Additional Student Consent
- Application, Award, and Administration of Aid
- Research
- FAFSA Completion Efforts
- Means-tested Benefits Outreach
- Designated Scholarship Organizations
- FTI and FAFSA Data Use that Requires Student Consent
- Sharing Data for Assistance from Government Agencies and Other Entities
- School-only Provisions With Student Consent
- FERPA and the Use of Non-FAFSA or Institutional Data
- Correcting the FAFSA
- Certain NSLDS Data Use Provisions Unchanged
- Student Consent
Individuals with additional information or specific questions can visit FSA’s Partner Connect Help Center and select the Topic “Policy Guidance” on the Contact Customer Support form.
For more information on FERPA and other privacy issues, visit studentprivacy.ed.gov. FERPA questions can be submitted at studentprivacy.ed.gov/contact.
