In June of 2013, the Supreme Court of the United States (SCOTUS) ruled on the Defense of Marriage Act (DOMA) in the case of United States v. Windsor commonly referred to as the Windsor case. Specifically, the Court’s decision invalidated Section 3 of the DOMA. That section of the DOMA prohibited federal agencies from recognizing same-sex marriages for purposes of federal programs, including the Title IV Federal Student Aid (FSA) programs. Since that section of the law was rendered invalid, there have been significant implications regarding the application for FSA programs, as well as related processing effects.
The U.S. Department of Education (ED) recently released its official guidance on the impact of the SCOTUS decision in the Windsor case as it relates to FSA programs and processing. This latest direction from ED is detailed in Dear Colleague Letter (DCL) GEN-13-25 which was published on December 13, 2013. Some of the key points clarified in this DCL are who is considered married, how the definition impacts completion of the Free Application for Federal Student Aid (FAFSA) and the resulting Expected Family Contribution (EFC) calculations. Further, ED addresses how the decision will affect current 2013-2014 award year processing, as well as processing in 2014-2015.
Based upon ED’s review of the Windsor case, it has determined that a person is considered married if the individual was legally married in any jurisdiction that recognizes the marriage as valid, irrespective of where the couple may live. Further, it is specified that if the marriage is recognized in the jurisdiction where the marriage was celebrated, known as the “place of celebration”, then the marriage is recognized for FSA program purposes regardless of where the couple lives and whether the marriage was between individuals of the same or opposite sex. The result is that no matter whether the State in which the student will be attending school recognizes same-sex marriages or not, for FSA purposes, a valid marriage (as described above) will be considered in force and applicable. It is noted that this assessment is only relevant to marriages and does not apply to other relationships such as domestic partnerships, civil unions, etc.
Impact of the SCOTUS Decision
With the change in the definition of what a legal marriage is, there are implications on the way the historic FAFSA questions may be answered. Any couples in a legal marriage (as defined earlier) will now be obligated to respond to the questions on the FAFSA accordingly, regardless of the sex of the individuals in the marriage. As has been the case in the past regarding stepparents, a dependent student will include information on the FAFSA about the student’s parent’s spouse (e.g., the student’s stepparent) when otherwise appropriate, likewise without regard to the sex of the individuals in the marriage. The accurate answers to the questions on the FAFSA utilizing the new guidance from ED, based upon the SCOTUS decision, will accordingly impact the results of the EFC calculation. For example, in addition to marital status and household size, if a student’s parent may now answer as “married” in light of the Windsor decision, it will also impact other items on the FAFSA that will need to be corrected such as income and assets of the parent’s spouse.
Current 2013-2014 Award Year
Many students have already completed their FAFSA for the 2013-2014 award year. ED has stated that students whose FAFSA information may have been impacted by the SCOTUS decision in the Windsor case have the option to correct the previously submitted FAFSA information. (It is noted that it is an option and not a requirement.) However, should they elect to make corrections, it has to be a legitimate correction and not an update. That is, the student or parent must have been legally married as of the date of the original FAFSA submission in order to correct the marital status based upon the SCOTUS decision. If a student or parent has made corrections to their marital status on the FAFSA based upon this Court decision, schools must use the EFC that is the result of such corrections for determining the student’s eligibility even if it requires a revision of the student’s prior financial aid awards for 2013-2014. Of interest is the potential for seeing more amended tax returns being filed as a result of the change in the definition of marriage, and thus the subsequent need to collect amended tax returns and the accompanying paper tax returns for applications selected for verification.
Students who are newly completing a 2013-2014 FAFSA must be sure to answer all questions in light of the SCOTUS decision and ED’s recent guidance. This is true even though the instructions for the paper FAFSA or FAFSA on the Web may not accurately reflect this new guidance for 2013-2014. The FAFSA on the Web is scheduled to be updated to have new language related to this Court decision by April 2014. Until then, ED has stated that it is adding new pop-up boxes and links to more information to assist in explaining how individuals should respond to questions related to marital status and the definition of parents. Additional information related to completing the FAFSA is available at StudentAid.gov under “Filling out the FAFSA” (see “Reporting Parents’ Information” on that page). Also, ED has developed a fact sheet to assist in explaining the guidance related to same-sex parents and filling out the FAFSA. It is available through a link on the “Reporting Parents’ Information” page as well. Moreover, students and parents may find further assistance regarding questions on this topic by contacting ED’s Federal Student Aid Information Center at 1-800-4FEDAID (1-800-433-3243).
The Upcoming 2014-2015 Award Year
When students apply for FSA programs for 2014-2015, the applicant, and in the case of dependent students, the dependent students’ parents, must answer all FAFSA questions accurately as designated in the guidance ED has provided related to the SCOTUS decision on the Windsor case. The answers to questions about marital status must be “married” if the student or parent, as applicable, is considered to be legally married where and when they were married, regardless of their current place of residence or where the student will be attending school (assuming no actions have been taken toward dissolution of the marriage). Once ED has updated the language used on FAFSA on the Web, the questions will ask for information in more gender neutral terms. Such terms will include “Parent 1, Stepparent 1” and “Parent 2, Stepparent 2” to replace the traditionally used terms of “Father/ Stepfather” and “Mother/Stepmother”. Other responses to questions on the FAFSA must be provided in response to the legal marital status, e.g., the income and assets of both spouses must be reported regardless of the sex of the spouses. ED does specify that in accordance with the direction provided last spring in GEN-13-12, when both legal (biological or adoptive) parents of the student are “unmarried and living together”, regardless of the sex of the parents, then each legal (biological or adoptive) parent’s information would be provided on the FAFSA even though not married.
Other Title IV Federal Student Aid Implications
While we have addressed some of the more immediate concerns for students applying for Title IV aid, it is important to be cognizant of the fact that other areas are impacted as well as a result of the SCOTUS decision in the Windsor case. We will touch on these very briefly here. First, with the change in the definition of marriage there will as a result be a change in who will be considered a parent for purposes of applying for a Direct PLUS Loan. Additionally, with the change in the definition of who is considered married, there will also be an impact on the data used to determine repayment amounts under the income-driven loan repayment plans such as the Income-Based Repayment (IBR) or Pay as You Earn (PAYE) plans. For now, we will have to await further direction from ED as it is continuing to review the implications of the Windsor case decision. ED has indicated it will likely have additional announcements related to necessary changes resulting from the SCOTUS action.
THE INFORMATION PROVIDED TO YOU IS FAME’S OPINION BASED ON OUR INTERPRETATION OF THE ISSUES AND EVENTS PROVIDED AND OUR INTERPRETATION OF THE TITLE IV REGULATIONS AS THEY MAY APPLY. FAME SHALL NOT BE LIABLE FOR ANY ERRORS CONTAINED HEREIN OR FOR ANY DAMAGES WHATSOEVER ARISING OUT OF OR RELATED TO THE USE OF THIS INFORMATION.