The U.S. Education Department (ED) has released details on how it will implement changes to the federal student aid application form made in the recently passed reconciliation legislation.
ED’s Office of Federal Student Aid said on August 15 that changes to the FAFSA (Free Application for Federal Student Aid) following the One Big Beautiful Bill Act will be implemented in the 2026-27 award year and incorporated into the 2026-27 FAFSA.
While many pieces of legislation will have to go through ED’s negotiated rulemaking process — including changes to loan origination and repayment, Workforce Pell and accountability — many of the changes to student aid eligibility are relatively minimal and ED can implement them without additional regulations. These changes include:
- Exempting the value of a family farm, small business and family-owned commercial fishing venture from reported assets.
- Adding any foreign earned income exclusion amount to the adjusted gross income for determining Pell Grant eligibility.
- Restricting Pell Grant eligibility for students with a Student Aid Index equal to or greater than twice the maximum Pell Grant ($14,790 for the 2026-27 award year).
ED confirmed that it will fully implement changes to Pell Grant eligibility ahead of the FAFSA launch date of October 1, but they may not be fully implemented during the ongoing rounds of beta testing. This means that colleges may receive reprocessed Institutional Student Information Records for the small number of students participating in beta testing for whom the Pell changes may apply. The family farm/small business/family-owned fishery assets exemption was added to the FAFSA form that students and families are currently completing during beta testing.
FSA last week released the 2026-27 FAFSA Preview Presentation, which lets financial aid officers, counselors and other stakeholders walk through the FAFSA form for various students, including dependent and independent students, provisionally independent students and dependent students applying only for Direct Unsubsidized Loans.
The presentation also similarly walks through the corrections process for applicants, including a student adding a school to the form, submitting a correction to their homeless status, managing FAFSA contributors and adding missing contributor consent or approval. A routine part of the annual FAFSA rollout process, the Preview Presentation helps colleges and college access professionals prepare to answer student or contributor questions and troubleshoot any application issues ahead of the form going live on October 1.
