How does the FAFSA and financial aid work?

The FAFSA is the free federal form that decides your grants, work-study and federal student loans, and most states and colleges use it too. Fill it out as soon as it opens, then compare aid offers by net price, not sticker price.

Dates for the current form

The 2027-28 FAFSA covers that school year. You can submit it starting October 1, 2026, and the federal deadline is June 30, 2028. State and college deadlines can be as early as the opening date.

It uses older tax information

The 2027-28 form asks about 2025 taxes. The student and every contributor, usually the parents of a dependent student, must consent to having federal tax data pulled in from the IRS.

The result is your Student Aid Index

The Student Aid Index (SAI) is a number schools use to build your aid offer. A lower or negative SAI means more need. It is not the amount your family will be asked to pay.

Grants are free, loans are not

Federal Pell Grants go up to $7,395 for the school year that starts July 1, 2026, and don't need to be repaid. Work-study is a part-time job. Loans have to be paid back with interest.

Who should file and when

Anyone planning to attend college, career school or trade school in the US should file, including adults going back to school. There is no income limit to apply. Federal Direct Unsubsidized Loans don't depend on financial need, and many states and colleges use the form for their own aid.

File a new FAFSA for every school year. The 2027-28 form opened October 1, 2026. The federal deadline is June 30, 2028, but that is the last possible day. States and colleges often set much earlier deadlines, and some give out money until it runs out, so filing in the fall matters.

What the form asks for

You'll need Social Security numbers, 2025 tax information, and current balances of cash, savings and investments. Most tax figures transfer straight from the IRS once each person gives consent. A dependent student also needs a parent to fill in the parent section with their own account.

Some things are left off. You don't report the home you live in, retirement accounts like a 401(k) or IRA, or life insurance. A 529 plan owned by a parent counts as a parent asset, and parents don't report 529 accounts they hold for other children.

Reading your FAFSA Submission Summary

After the form is processed, you get a FAFSA Submission Summary. It shows your Student Aid Index and an estimate of any Pell Grant. Check every answer on it for mistakes and fix them quickly, since errors can delay or change your aid.

The summary is an estimate. Each school you're admitted to sends its own aid offer with exact amounts, and the school makes the final decision about what it gives you.

Comparing aid offers by net price

An aid offer, sometimes called an award letter, lists grants, scholarships, work-study and loans together. Only the first two lower what you pay. Your net price is the total cost of attendance minus grants and scholarships.

Federal Student Aid's own example shows why. One school costs $38,412 and offers $22,498 in aid, for a net price of $15,914. Another costs $27,521 but offers $11,245, for a net price of $16,276. The cheaper sticker price ends up costing more.

How much you can borrow

Dependent undergraduates can borrow federal Direct Loans of up to $5,500 in the first year, $6,500 in the second and $7,500 in the third year and beyond, with a total cap of $31,000. Only part can be subsidized: $3,500, $4,500 and $5,500.

Subsidized loans don't charge interest while you're in school or during the six-month grace period after. Unsubsidized loans charge interest from the day the money is paid out. Take subsidized loans first, and borrow only what you need, since you can turn down or reduce any loan in an offer.