The rollout of the 2024-2025 FAFSA application brought unexpected challenges that many families and schools struggled to navigate. Due to administrative delays and the complexity of implementing the FAFSA Simplification Act, the form’s release was pushed from its traditional October 1 launch to December 31, 2023. As a result, many students faced tight deadlines for financial aid submissions, creating stress during an already complicated process.
Additionally, the transition to a simplified form, while intended to streamline the experience, presented new hurdles for applicants. The delayed launch affected processing times and left families and educational institutions scrambling to meet revised timelines. With the 2024-2025 FAFSA experience in mind, the 2025-2026 FAFSA aims to refine the process further while addressing any lingering issues.
This guide conveys much of what students and parents need to know to prepare for this year’s changes.(1) Critically, it also talks about the timing of their submissions and the numbers involved in the calculation so they don’t leave money on the table. Below are some key considerations for the 2025-26 FAFSA form and some tips for completing it.
Highlights of the 2025-2026 FAFSA
1. Two-Step Rollout
The 2025-2026 FAFSA will have a two-step rollout, starting with a soft launch on October 1, 2024, followed by a full public release on December 1, 2024.
The soft launch will give select students and institutions early access to the form, allowing the Department of Education to identify and address potential issues before the broader release. This phased approach aims to prevent the delays and technical challenges that affected the prior launch when processing was delayed even after the form became available. By gradually increasing the number of users during the soft launch, the aim is to ensure a smoother experience for all families once the FAFSA is fully available in December.
2. Re-Use of 2024-2025 FAFSA Format
According to the Department of Education,(2) to ensure a smooth user experience during the upcoming FAFSA cycle, the 2025-26 FAFSA form will remain consistent with the 2024-25 form. As a result, similar to previous years when the Department had no significant changes in functionality, the 2025-26 form will not be made available for public comment. Instead, resources will be expended to improve the user experience for students, families, and educational partners.
3. Creation of Prototype Form
First time filling out the FAFSA? The Department of Education recently launched a web-based design tool to navigate a preliminary version of the 2025-2026 application.(3) The FAFSA prototype demonstrates the following scenarios:
- Initiating a new application as a student or parent
- Completing an in-progress application as a student, parent, or spouse
- Common corrections scenarios, including missing critical data elements or signatures and voluntary corrections
For parents anxious about the process, this tool is a great way to see the types of questions you will be asked and the information you will have to have at the ready when completing the form. To access the 2025–26 FAFSA prototype:
- Visit fsapartners.ed.gov/fafsa-prototype/2526
- Enter the access code: prototype2526
4. Adjusted Financial Contribution Calculations
The Student Aid Index (SAI), introduced in 2024-2025 to replace the Expected Family Contribution (EFC), will see adjustments to its calculation formula. In 2025-2026, more income exclusions will be applied to better reflect a family’s ability to pay for college. This means that more families, particularly those with moderate to low incomes, may qualify for increased financial aid. The new changes will also clarify how assets like family farms or small businesses are assessed, ensuring the burden on these families is not as harsh.
5. Expanded Pell Grant Eligibility
The 2025-2026 FAFSA will continue to offer expanded eligibility for Pell Grants, a change that started in 2024-2025. The income threshold for maximum Pell Grants remains elevated, making federal aid more accessible to families with incomes that previously did not qualify. For instance, a single parent with two children will be eligible for at least some Pell Grant funds with an adjusted gross income of up to $90,188.(4)
6. Grandparent Contributions
One positive change from the 2024-2025 FAFSA is the exclusion of grandparent contributions from financial aid calculations. In prior years, any financial help from grandparents or other extended family members could reduce the student’s eligibility for aid by being counted as untaxed income. With this new policy, families can now accept financial support from extended relatives without negatively impacting their financial aid status.
7. Elimination of Multi-Child Enrollment Benefits
As in 2024-2025, the 2025-2026 FAFSA will not consider the number of children a family has enrolled in college at the same time. Previously, families with multiple students in higher education could expect a reduction in their expected contribution. This change continues to place a greater financial burden on families with multiple college-aged children.
8. Records of Net Worth of Investments, Businesses, and Farms
One final major change is that the adjusted value of a family small business or farm will be used when calculating the expected financial contribution from parents. Prior to last year, farms and businesses with fewer than 100 employees were excluded. While the net value of the farm or business will be lowered due to an adjustment formula and there are carveouts for home value, the inclusion of these assets may make receiving need-based scholarships harder for many children of small business owners or farmers.
General FAFSA Information
As families prepare for the 2025-2026 FAFSA, it’s essential to start early, gather necessary documents, and stay informed about the ongoing changes. Families should complete the FAFSA as soon as possible after its release to maximize their chances of receiving aid.
The FAFSA will still use tax information from two years prior (for 2025-2026, this means 2023 tax returns). Applicants should be prepared to use the IRS Data Retrieval Tool / FA-DDX Solution to streamline the process. Moreover, any changes to family financial circumstances, such as job losses or significant income fluctuations, should be communicated to the financial aid offices of prospective schools through the Professional Judgment (PJ) process.
Despite the changes and recent challenges, the FAFSA remains a crucial tool for accessing federal financial aid, including grants, scholarships, and work-study opportunities. Here are some additional tips.
Have All the Right Documents Ready
To complete the FAFSA Form, you will need your:
- Social Security Number
- Alien Registration Number (if you are not a U.S. citizen)
- Most recent federal income tax returns, W-2s, and other records of money earned. (Note: You can transfer your federal tax return information into your FAFSA using the IRS Data Retrieval Tool / FA-DDX Solution
- Bank statements and records of investments (if applicable)
- Records of untaxed income (if applicable)
- FSA ID to sign electronically. To create one, go to studentaid.gov.
- If you are a dependent student, you will also need most of the above information for your parent(s).
Tips for Filling Out the FAFSA Form
Not Sure If You’re Eligible? Fill It Out Anyway
A common financial aid myth is that students with parents who have high-paying jobs will not be eligible for the FAFSA—wrong! Everyone should fill out a form, regardless of their financial situation. The FAFSA is not just an application for federal grants; it is also necessary for low-interest student loans, work-study programs, and scholarships and grants from schools, states, and private organizations.
You should complete the form so you don’t miss out on potentially thousands of dollars in financial aid to help pay for your child’s college. Don’t fall for these myths (5) about financial aid.
Also, you may not need financial aid now, but anything could happen. If you need assistance in the future, the process will be easier if you’ve already filled out the form.
Fill Out the Form ASAP
The new FAFSA form will be available to the general public around December 1, 2024, on studentaid.gov. Again, you’ll want to submit your application as soon as possible after that date, as it is expected that the Education Department and colleges will face additional processing delays. Particularly for first-time college students, you’ll want to know your available aid as early in the process as possible to make the right choices for you and your family.
Consent to the FUTURE Act Direct Data Exchange (FA-DDX) Solution
Previously, users could enter their tax information manually or use the IRS Data Retrieval Tool. Beginning with 2024-25, all persons on the FAFSA must consent for the Department of Education to receive tax information or confirmation of non-filing status directly from the IRS via the new FA-DDX solution. In a minimal number of cases, students and families will have to enter their tax data manually, but for most, that data will be automatically transferred into the application. This change makes it easier to complete the FAFSA and reduces the number of questions to be answered.
Renew Your FAFSA Every Year of College
Another financial aid myth is that after a student’s first year, they no longer need to worry about filling out the FAFSA—wrong, again!
The amount of federal aid your child qualifies for in one year has no bearing on future years. Also, changes in your family’s financial situation could impact the amount of financial aid your child qualifies for in later school years.
Final Thoughts
Affording college can be challenging for any family regardless of their situation, but it’s not impossible. By utilizing the tips above and additional resources such as other forms of financial aid and college savings plans outlined in our guide,(6) affording college can be more manageable than you think.
In addition to these tips, you can learn more about College Savings via our many helpful articles, including How To Find College Scholarships (7) and How To Balance College Savings And Retirement.(8) Be sure to also check out our Family and Finances blog series,(9) which provides general financial insights for families.
Have additional questions regarding FAFSA or College Savings Plans? Contact our team of Financial Advisors today! Sign up for our free blog via the panel at right to get monthly wealth management updates like this one sent directly to your inbox!
Sources:
1. Details Related to the 2025-2026 Form Launch (Federal Student Aid .gov, 2024)
2. Details Related to the 2025-2026 Form Launch (Federal Student Aid .gov, 2024)
3. 2025-2026 FAFSA Prototype Now Available (Federal Student Aid .gov, 2024)
4. FAFSA Changes Mean More Pell Grants for Students With Kids, Here’s Why (Forbes, 2024)
5. 12 Myths About the FAFSA Form and Applying for Financial Aid (Vernon College, 2024)
6. College Savings Planning Basics (Magellan Financial, 2023)
7. How To Find College Scholarships (Magellan Financial, 2023)
8. How To Balance Retirement And College Savings (Magellan Financial, 2019)
9. Family and Finances Blog Series (Magellan Financial, 2023)
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