This bill restores the FAFSA exemption for family farms and small businesses with under 100 employees. It excludes their net worth from student aid calculations, reversing recent changes that treated them as countable assets.
Latest Action
Referred to the House Committee on Education and Workforce.
AI Summary
Plain-English explanation of this bill
This bill restores the FAFSA exemption for family farms and small businesses with under 100 employees. It excludes their net worth from student aid calculations, reversing recent changes that treated them as countable assets.
Last updated: 1/5/2026
Official Summary
Congressional Research Service summary
<p><strong>Family Farm and Small Business Exemption Act</strong></p><p>This 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.</p><p>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.</p>
Key Points
Main provisions of the bill
Restores family farm FAFSA exemption
Excludes small business net worth from aid calculations
Applies to businesses under 100 employees
Reverses 2024-2025 FAFSA changes
Helps farm and business family students qualify for aid
How This Impacts Americans
Potential effects on citizens and communities
Students from farming families would qualify for more financial aid. Small business owners children would not be penalized by business assets. The exemption returns to pre-2024 treatment of family enterprises.
Policy Areas
Primary Policy Area
Education
Related Subjects
Government lending and loan guarantees
Rural conditions and development
Small business
Student aid and college costs
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
1131, 119th Congress (2025). "Family Farm and Small Business Exemption Act". Source: Voter's Right Platform. https://votersright.org/bills/118-hr-1131
