FAFSA 2026-27 Update: What Students Need to Know About the New Form

FAFSA 2026 Update: Starting October 1, students and families applying for federal aid will see some big changes in the FAFSA for the 2026-27 school year. The Department of Education made the process simpler, but the changes go deeper than just easier forms.

The new “One Big, Beautiful Bill” has updated how Pell Grant eligibility works and how families’ Student Aid Index, or SAI, is calculated. The SAI is the number used to figure out how much a family can pay for college. A higher SAI means less federal aid, while a lower SAI can unlock more help. The changes will affect families differently depending on income, assets, and financial situations.

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How the Changes Affect Families?

One big change helps families with farms, and small businesses, or commercial fisheries. Before this the FAFSA counted these things as assets, which made SAI higher and lowered the aid they could get. Now starting with the 2026-27 FAFSA, these assets don’t count. This means lots of rural and business owning families will get more federal aid than before.

But not all changes are helpful like students who get full-ride scholarships can no longer receive Pell Grants. Before this, Pell money could sometimes cover living costs or supplies even if tuition was already paid. The new rule redirects these funds to students with real financial need, making the aid system fairer.

Another important change affects families with foreign income. Previously only the US based earnings counted, but now any foreign income must be included in the adjusted gross income. This may reduce eligibility for families working or earning money abroad.

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The Pell Grant rules got stricter too so ig a family’s SAI is the same or more than double the max Pell Grant, $14,790 for 2026-27, they won’t get any Pell money. Lawmakers made this rule to stop families from moving money into stuff or savings to make their SAI look smaller and get more Pell help.