FAFSA and Financial Aid: What Every Family Should Know

For many families, the thought of paying for college brings a mix of excitement and dread. You want your child to have every opportunity possible, but between housing costs, childcare, and the everyday expense of raising a family, it can feel impossible to imagine how you’ll cover tuition bills that often rival a year’s salary. That’s where financial aid comes in. And the most important gateway to that aid is a single form: the FAFSA.

The FAFSA—the Free Application for Federal Student Aid—opens the door to far more than just federal grants and loans. It’s the application colleges use to award their own need-based and even some merit-based scholarships. It’s also the key to many state-based aid programs and local scholarships that require FAFSA completion before determining eligibility. In other words, filling it out is not optional if you want the full picture of what’s available to you. Too many families assume the FAFSA is only for low-income households, but that assumption leaves money on the table. Even higher-earning families often qualify for institutional scholarships, work-study opportunities, or low-interest federal loans that can make a big difference in affordability.

What’s New in the FAFSA Process

In recent years, the FAFSA has been dramatically simplified. The form has shrunk to just 36 questions from 108, thanks to the FAFSA Simplification Act. Families will also notice that the old “Expected Family Contribution” has been replaced by the Student Aid Index, or SAI. While the acronym is new, the concept is familiar: it’s the number colleges will use to determine how much aid your student is eligible for. The changes mean expanded Pell Grant eligibility for many families and a much smoother process for reporting tax information, since the form now draws directly from IRS data.

Two updates are especially important. First, if parents are divorced or separated, the parent who provided the most financial support in the past year is now the one responsible for filling out the FAFSA. That can shift who counts as the “FAFSA parent” in ways that surprise families. Second, 529 accounts owned by grandparents or siblings no longer reduce aid eligibility. That’s a major win for families where extended relatives pitch in to help with education savings.

Don’t Overlook State and Local Aid

Many states operate their own tuition assistance programs, scholarships, and grant opportunities, and most of them rely on information submitted through the FAFSA. Some states also offer tax benefits for families who contribute to 529 college savings plans. These programs vary widely depending on where you live, but nearly all require that the FAFSA be submitted on time—and in some cases, as early as possible. Be sure to check your state’s higher education website to understand any additional forms, deadlines, or steps required to access this aid.

Timing Matters

The FAFSA for the 2026–27 school year opened in September 2025. While the form doesn’t close immediately, the reality is that many colleges award aid on a rolling basis. The earlier you apply, the better your chances of accessing not just federal dollars but also institutional funds that may run out. Think of it like registering for an in-demand class: being at the front of the line matters.

Preparing early can save you a lot of stress. Gather your family’s tax returns, W-2s, Social Security numbers, and details on income and assets before you sit down to complete the form. If your household includes a mix of incomes or complex situations—say, freelance earnings or recently divorced parents—it’s worth setting aside an hour with everything in front of you. Families typically spend 30 to 60 minutes filling out the FAFSA, but those who prepare in advance avoid the scramble that leads to errors.

Beyond the Form

Submitting the FAFSA is only the first step. Once your Student Aid Index is calculated, colleges will use it to put together financial aid packages. And while the FAFSA provides the framework, each school has its own policies. Some may meet 100 percent of need, while others won’t. This is where tools like Net Price Calculators become invaluable: they give you a more realistic sense of what you’ll actually pay at a given school, factoring in average grants and scholarships.

It’s also worth remembering that financial aid packages may vary significantly even among schools with similar sticker prices. Two colleges may both list tuition at $60,000, but one might offer $35,000 in grants while the other offers $5,000. Filing the FAFSA ensures you can compare those offers with eyes wide open and make informed decisions about what each college will really cost your family.

Taking the First Step

College planning can feel like standing at the base of a skyscraper—you know the climb will be long and expensive, and it’s tempting to avoid looking up. But the FAFSA is your revolving door. It doesn’t solve everything, but it gets you into the building. By completing it, you unlock access to federal grants like the Pell, state tuition programs, local scholarships, and countless institutional aid packages.

Whether your child is still in elementary school or already drafting college essays, the FAFSA should be on your radar. It’s the single most important step you can take to give yourself options and clarity. And while you don’t have to have every detail of your financial plan figured out, you do need to start. That first step opens more doors than you might imagine—no matter where you live.