by Justin Pye
The United States Department of Education informed states that payments made to older teens and young adults in foster care would not count against students applying for federal financial aid.
In a “Dear Colleague” letter, the department clarified how extended foster care payments should be handled:
Extended foster care payments paid under the authority of Title IV – Part E of the Social Security Act are excluded from income for purposes of the calculation of a student’s Expected Family Contribution (EFC) and thus not reported on the FAFSA.
Since the passage of the Fostering Connections to Success and Increasing Adoptions Act in 2008, some states have taken the federal government up on its offer to share the cost of providing foster care services to wards between the ages of 18 and 21.
The funding for that expansion comes through a match of federal and state funds under Title IV-E of the Social Security Act. In some states, including California, some of the older foster youths receive IV-E payments directly to assist with housing and other costs.
The answer is officially, “No.” Foster care payments are considered excludable income for all eligible youth, whether the youth is living on a college campus, on his own, or in an independent living program.
The July guidance focuses on the standard foster care payments and makes no mention of the Chaffee Education Training Vouchers (ETV) program, which matches federal and state funds for grants to assist current and former foster youth with college costs. But one section indirectly suggests that the Department of Education views ETV grants in the same lens:
Any extended foster care payments that are provided directly to the student under the same authority (Part E of Title IV of the Social Security Act) that a State uses to make regular foster care payments to foster parents are considered to be “excludable income”…
The ETV grants – which can total up to $5,000 per student, per year – are funded through Part E of Title IV.
Until this point, some financial aid offices were unsure how extended foster care payments paid directly to a youth were factored into a student’s Title IV-E student aid eligibility.
“We think this will help students,” said Diana Fuentes-Michel, executive director of the California Student Aid Commission.
Debbie Raucher, program manager at the John Burton Foundation, was a part of the team that initiated the clarification request with the federal agency after a California law called Assembly Bill 12 took effect.
AB 12 extended foster care up to age 21 in California. Before it took effect last year, all foster payments were made to care providers. Now, some of the older teens and young adults in foster care receive those payments directly.
“AB 12 created this new situation and everybody started asking the question: If youth are getting these checks directly to them, does that mean they have to report this income on the FAFSA?” said Raucher.
The letter further clarifies that state and federal foster care payments are eligible for exclusion.
“It doesn’t matter, there’s really no distinction between whether somebody’s payment is coming from the federal government or the state government,” Raucher said. “The money is still considered to be a foster care program that’s authorized under Title IV-E.”
Though the federal FAFSA deadline has passed, any corrections or updates can be submitted until September 20. And Fuentes-Michel said the California Student Aid Commission would be asking schools to take a second look at the financial aid packages of former foster youth.
Raucher suggests “getting the word out to everybody and anybody who intersects with foster youth who are going to college” to help ensure students are aware of how their aid is being processed.
“There’s probably foster youth out there who are just now thinking about starting college in the fall,” Raucher said. “If somebody were to come to me right now and say that they’re interested in starting college, I certainly will rush them over to the community college and I would tell them to do a FAFSA today.”
Justin Pye is a graduate student at UC Berkeley’s Graduate School of Journalism and Journalism for Social Change summer fellow.