1. (a) In accordance with Texas Education Code (TEC), §28.0256, beginning with students enrolled in Grade 12 during the 2021-2022 school year, a student shall complete and submit a free application for federal student aid (FAFSA) or a Texas application for state financial aid (TASFA) as a requirement for receiving a high school diploma except as otherwise provided by subsection (b) of this section.

2. (b) A student may graduate under the Foundation High School Program without completing a financial aid application under one of the following conditions:

   1. (1) the student's parent or other person standing in parental relation submits a signed form indicating that the parent or other person declines or authorizes the student to decline to complete and submit the financial aid application;
   2. (2) the student signs and submits the form described by paragraph (1) of this subsection on the student's own behalf if the student is 18 years of age or older or is emancipated under the Texas Family Code, Chapter 31; or
   3. (3) a school counselor signs and submits the form described by paragraph (1) of this subsection indicating that the school counselor authorizes the student to decline to complete and submit the financial aid application for good cause, as determined by the school counselor.

3. (c) The board of trustees for each school district and open-enrollment charter school shall adopt the standard opt-out form provided by the Texas Education Agency (TEA) for the purpose of the exceptions under subsection (b) of this section.

   1. (1) The opt-out form shall be available in English, Spanish, and any other language spoken by a majority of the students enrolled in a bilingual education or special language program under TEC, Chapter 29, Subchapter B, in the district or charter school. Districts and charter schools are responsible for translations not provided by TEA.
   2. (2) The opt-out form must include the student's signature of intent in order for the student to decline to complete a financial aid application prior to the student's anticipated graduation date.

4. (d) Each school district and open-enrollment charter school shall provide students with the following notifications regarding the financial aid application requirement.

   1. (1) Standard information regarding the financial aid requirement and the exceptions under subsection (b) of this section shall be provided at the time a student first registers for one or more classes required for high school graduation.

   2. (2) Detailed information regarding instructions for the completion and submission of a financial aid application shall be provided to a student at the beginning of Grade 12 or at the time a student in Grade 12 transfers into a high school from a non-public school or a public school outside of Texas. The instructions shall include:

      1. (A) an explanation of the FAFSA and TASFA and the difference between the two;
      2. (B) instructions for how to access the FAFSA and TASFA, including key dates and deadlines for completion and submission;
      3. (C) resources available to support completion and submission of the FAFSA and TASFA;
      4. (D) documents and information required to complete the FAFSA or TASFA; and
      5. (E) contact information for school staff or local community resources available to support completion of the forms.

   3. (3) Options available to a student under subsection (b) of this section if a student or parent wishes to decline to complete and submit a financial aid application shall be provided to a student at the beginning of Grade 12 or at the time a student in Grade 12 transfers into a high school from a non-public school or a public school outside of Texas. The options shall include:

      1. (A) the opt-out form and explanation of required signatures; and
      2. (B) notification that if the parent or student chooses to opt out for the purposes of the student's graduation, the student will still be eligible to complete the FAFSA or TASFA that year or in subsequent years.

5. (e) Each school district and open-enrollment charter school shall require one of the following methods of proof that a student has completed and submitted the FAFSA or TASFA as required by this section.

   1. (1) ApplyTexas Counselor Suite financial aid application data;
   2. (2) notification from the United States Department of Education or the Texas Higher Education Coordinating Board that demonstrates a student has completed and submitted a financial aid application; or
   3. (3) a local policy developed by a school district or an open-enrollment charter school for the method by which a student must provide proof that the student has completed a financial aid application.
6. (f) A school counselor may only notify a school district or open-enrollment charter school whether a student has complied with this section for purposes of determining whether the student meets high school graduation requirements and may not indicate the manner in which the student complied, except as necessary for the district or charter school to comply with Texas Student Data System Public Education Information Management System (TSDS PEIMS) reporting requirements under subsection (e) of this section.
7. (g) A school counselor may not indicate that a student has not complied with the financial aid application graduation requirement if the school district or open-enrollment charter school fails to provide the opt-out form described by subsection (c) of this section to the student or the student's parent or guardian.

8. (h) Each school district and open-enrollment charter school shall report through the TSDS PEIMS the following information not later than December 1 of each school year for students awarded diplomas in the previous school year:

   1. (1) the number of students who completed and submitted a financial aid application; and
   2. (2) the number of students who submitted an exception.
9. (i) Each school district and open-enrollment charter school shall maintain student financial aid application information securely and ensure compliance with federal law regarding the confidentiality of student educational information, including the Family Educational Rights and Privacy Act of 1974 (20 U.S.C. Section 1232g), and any state law relating to the privacy of student information.

Source Note:The provisions of this §74.1023 adopted to be effective October 26, 2021, 46 TexReg 7208; amended to be effective June 11, 2026, 51 TexReg 3803.