After two rocky years, the FAFSA is back on schedule. The FAFSA Deadline Act, signed in December 2024, now codifies October 1 as the fixed launch date. The Department of Education has since confirmed that the 2026–27 FAFSA form is indeed on track to launch on October 1, 2025.
Better yet, beta testing is already live in two phases. Phase 1 invited select districts and organizations in August; Phase 2 is open now to anyone who requests access via StudentAid.gov. Those forms won’t need to be resubmitted later.
Why this matters for Magellan families: You can relax a bit as this year’s cycle should have far fewer delayed launches and uncertainty. And if you’d rather get an early start, sign up for beta testing now. With that said, here are the changes you will find on this year’s form:
1. Tech Upgrades That Save Time
Expect a smoother FAFSA experience this year. Early reports highlight two big improvements:
- Instant identity verification and IRS data retrieval (SSN entry now triggers immediate IRS access where available)¹
- Simplified contributor invites: instead of wrestling with Social Security numbers and FSA IDs, your student can invite contributors via email with a secure access code.
Put simply: on the 2026-2027 FAFSA, you should experience less fumbling with forms, fewer roadblocks, and faster completion times.
2. Asset Treatment Changes for Farms & Businesses
Under the recent One Big Beautiful Bill Act (implemented ahead of beta testing), the FAFSA once again exempts family farms, small businesses (≤100 employees), and fishing operations from being counted as assets.² That’s a major win for families in agriculture, rural enterprises, and family-owned operations.
3. Pell-Related Adjustments with Broader Impact
While the maximum Pell Grant amount for 2026–27 has not yet been released by the Department of Education, there are a few important updates that affect how eligibility is determined.
First, students with a Student Aid Index (SAI) equal to or greater than two times the maximum Pell amount will not be eligible for Pell funding. Based on the current maximum Pell of $7,395, that would mean an SAI threshold of about $14,790.³ In addition, foreign earned income must now be added back into adjusted gross income (AGI) for Pell calculations.
Even if Pell funding isn’t a factor for your household, it’s worth knowing how these rules shape federal aid formulas overall—because FAFSA is still required for federal loans, work-study, and many institutional aid programs.
4. FAFSA and Parent Plus Loans
Even if your family doesn’t qualify for need-based aid, filing the FAFSA is still required to access Parent PLUS loans. These federal loans help cover education costs not met by other aid and remain a common option for higher-income households to bridge the gap between 529 account savings and the continued ballooning of higher ed costs.
Starting July 1, 2026, new rules will cap Parent PLUS borrowing at $20,000 per year per student and $65,000 lifetime per student.⁴ In addition, new Parent PLUS loans will no longer qualify for income-driven repayment plans, meaning repayment will follow a standard fixed schedule. Parents with existing loans issued before this date may continue under the old rules for several years, but planning ahead is essential.
5. What You Can Do Right Now: Quick Action Plan
Here’s what Magellan families can prioritize right away:
- Create or update FSA IDs now, since instant SSN tracking means less back-and-forth later.
- Apply for beta access if you want the earliest possible submission (forms submitted in beta count!).
- Gather financial documents: prior-prior tax year returns, asset info, etc., to complete the form quickly once open.
- Note farm/business exemptions since assets won’t count this year.
- If you expect your SAI to be high, model your numbers now to see if you can make changes this tax year to position yourself for future FAFSAs.
You’ll want to submit your application as soon as possible after release, as some colleges may allocate funds on a first-come, first-served basis. 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.
**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.
Why This Matters to You
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,⁵ affording college can be more manageable than you think.
Additionally, you can learn more about College Savings via our many helpful articles, including How To Find College Scholarships⁶ and How To Balance College Savings And Retirement.⁷
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) 2026-2027 FAFSA Updates (Illinois Student Aid Commission.com)
(2) One Big Beautiful Bill Act Updates (Student Aid.gov)
(3) Agency Information Collection Activities (Federal Register)
(4) Federal Student Loans Shrink Under the ‘Big Beautiful Bill’ (Investopedia)
(5) College Savings Planning Basics (Magellan Financial, 2025)
(6) How To Find College Scholarships (Magellan Financial, 2023)
(7) How To Balance Retirement And College Savings (Magellan Financial, 2025)
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