New FAFSA Rules for 2026: What Families Need to Know Before Applying

The Free Application for Federal Student Aid (FAFSA) will open on October 1 for the 2026-27 academic year, and this year’s form comes with major changes that could affect how much federal financial aid students receive.

The Department of Education has simplified the form, but new rules will also reshape Pell Grant eligibility and how a family’s Student Aid Index (SAI) is calculated.

The SAI is the figure used to determine how much a family can reasonably contribute to a student’s education.

A higher SAI usually means less aid. With the updated formula under the One Big, Beautiful Bill, families may see different outcomes depending on their financial circumstances.
 

Families Who May Benefit

• Farms and small businesses: Starting with the 2026-27 FAFSA, families who own farms, small businesses, or commercial fisheries can exclude those assets from their reported financial information. This change could lower their SAI, making them eligible for more federal student aid.

You may have access to support you didn’t know about. Find out more here!
 

Families Who May See Reduced Aid

• Students with full-ride scholarships: Those who previously used Pell Grant funds for living expenses or supplies will no longer qualify, as the grants will now be directed only to students with unmet financial need.

• Foreign income: Families with income earned abroad must now include it on the FAFSA. This change may reduce aid for households with international earnings.

• High-income families: Families with an SAI equal to or greater than twice the maximum Pell Grant ($14,790 for 2026-27) will no longer be eligible for Pell Grants.
   

What This Means for Students

These changes are designed to make aid distribution fairer, though the effects will vary.

Some rural and entrepreneurial families will benefit, while others, especially those with higher or foreign income, may face reduced aid.

Students and parents should carefully review the new FAFSA rules before submitting their application on October 1 to understand how their financial aid eligibility may shift.

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