College prices can be alarming, but most students pay less than the published price once grants and scholarships are counted. Getting the most aid starts with understanding how it’s calculated and applying on time. Several federal rules changed in 2026, so even families who’ve been through the process before should take a fresh look.

Step 1: File the FAFSA

The Free Application for Federal Student Aid is the gateway to federal grants, loans and work-study, and most states and colleges use it for their own aid too. The 2027–28 FAFSA, for students starting or continuing college in fall 2027, opened on September 23, 2026, ahead of the October 1 deadline.

  • It uses 2025 tax information, pulled directly from the IRS with your consent.
  • It calculates your Student Aid Index (SAI), a number colleges use to determine your eligibility for need-based aid.
  • It’s getting easier for returning students. The Department of Education says renewal applicants will see some answers carried over from the previous year starting later this fall, and parents can invite a contributor with a code.
  • File early. Some state and college aid is first come, first served, and state deadlines vary.

What changed in the aid formula

  • Farm and small business assets: the net worth of a farm the family lives on, a family-owned business with 100 or fewer full-time (or full-time-equivalent) employees, and a family commercial fishing business no longer counts. For some families, that means a lower SAI and more aid.
  • Pell Grant limits: students whose SAI is at least twice the maximum Pell Grant are not eligible for Pell, with narrow exceptions such as for children of certain service members and public safety officers who died in the line of duty. For 2026–27, that threshold is $14,790.
  • Full scholarships: students whose non-federal grants and scholarships already equal or exceed the full cost of attendance are not eligible for Pell.
  • Foreign income: any foreign earned income excluded from U.S. taxes is now added back when determining Pell eligibility.

Grants: free money first

  • Federal Pell Grants: up to $7,395 for 2026–27 for students with financial need, based on the SAI.
  • Workforce Pell: since July 1, 2026, Pell Grants can also help pay for approved short-term job training programs of 150 to 599 clock hours that last at least 8 but fewer than 15 weeks. Programs need approval from their state and the Department of Education, and governors identify the high-demand fields that qualify, so options are still being added.
  • State grants: many states offer generous grants with their own deadlines and residency rules.
  • College grants and scholarships: the largest source of aid at many private colleges, based on need, merit or both.

The CSS Profile

Some private colleges and scholarship programs also require the CSS Profile, run by the College Board, to award their own aid. It asks for more detail than the FAFSA, such as home equity at some colleges, and some colleges require information from both parents if they’re separated or divorced. Fee waivers are available for eligible families.

Loans: how much, and from whom

LoanWho borrowsLimits
Direct Subsidized and UnsubsidizedThe studentFor dependent students: $5,500 in year one, $6,500 in year two, $7,500 in later years, up to $31,000 in total. Unchanged.
Parent PLUSA parent of a dependent studentFor new borrowers since July 1, 2026: up to $20,000 a year and $65,000 in total per student
Private loansStudent, often with a cosignerSet by the lender, based on credit

If a student was enrolled in a program by June 30, 2026 and had already received a federal Direct Loan for it before July 1, 2026 (either the student’s own loan or a Parent PLUS loan), the family can generally continue borrowing under the old rules for up to three academic years or the rest of the program, whichever is shorter. New Parent PLUS loans also have fewer repayment options than before, with no access to income-driven repayment. A combined lifetime limit of $257,500 now applies to a student’s own federal loans across undergraduate and graduate study, not counting Parent PLUS.

Mind the gap. Before the change, Parent PLUS could cover up to the full cost of attendance. Now, at a college costing $80,000 a year with little aid, federal loans may leave a gap of tens of thousands of dollars a year. Our cost planner shows what it could look like for you.

Comparing offers

Aid offers aren’t standardized, so line them up carefully:

  1. Separate free money from loans. Grants and scholarships don’t need to be repaid; loans and work-study are different.
  2. Calculate net cost: total cost of attendance minus grants and scholarships.
  3. Check renewal conditions, such as minimum GPA requirements for merit scholarships.
  4. Look four years ahead. Tuition usually rises, and some aid is only for the first year.

Appealing an offer

If your family’s situation has changed since the tax year the FAFSA uses, such as a job loss, medical expenses or divorce, ask the financial aid office for a professional judgment review. Provide documentation and be specific. Some colleges will also reconsider merit aid when you share a stronger offer from a comparable college, though policies vary.

Other ways to lower the cost

  • In-state public universities and colleges known for meeting full need
  • Community college, then transfer. See our transfer guide
  • Credit you’ve already earned through AP, IB or dual enrollment
  • Direct admissions and state scholarship programs. See direct admissions explained
  • Outside scholarships, especially local ones with fewer applicants

Our cost planner estimates your borrowing and any remaining gap, and our guide to fee waivers covers the cost of applying.

Corrections, October 15, 2026. We previously said only families who already had Parent PLUS loans could keep borrowing under the old rules; the interim exception also applies when the student had received their own Direct Loan for the program before July 1, 2026, and lasts up to three academic years or the rest of the program. We previously described Workforce Pell programs as lasting 8 to 15 weeks; the law requires at least 8 but fewer than 15 weeks and 150 to 599 clock hours.

Sources

  1. U.S. Department of Education Announces Earliest FAFSA Launch in Program History for the Second Consecutive Year, U.S. Department of Education.
  2. 2027–28 FAFSA Beta Testing Plan (Updated Sept. 23, 2026), Federal Student Aid, U.S. Department of Education.
  3. (APP-25-23) 2026–27 FAFSA Form and Pell Grant Eligibility Updates, Federal Student Aid, U.S. Department of Education.
  4. 2026–27 Federal Pell Grant Maximum and Minimum Award Amounts, Federal Student Aid, U.S. Department of Education.
  5. Accountability in Higher Education and Access Through Demand-Driven Workforce Pell: Pell Grant Exclusion Relating to Other Grant Aid; and Workforce Pell Grants, Federal Register, U.S. Department of Education.
  6. Frequently Asked Questions – Loan Limits, Federal Student Aid, U.S. Department of Education.
  7. (LOANS-26-05) One Big Beautiful Bill Act NSLDS Eligibility Processing Updates (Updated May 7, 2026), Federal Student Aid, U.S. Department of Education.
  8. One Big Beautiful Bill Act Updates, Federal Student Aid, U.S. Department of Education.
  9. Repayment Assistance Plan (RAP), Edfinancial Services, a Federal Student Aid loan servicer.
  10. Fee Waivers, CSS Profile, College Board.