Paying for college can involve more than tuition. Students and families may also have to account for housing, food, books, transportation, supplies and other education-related expenses.
Financial aid can help cover some of these costs. Depending on your circumstances, financial aid may come in the form of grants, scholarships, work-study or student loans.
For the 2026–27 school year, the federal financial aid process begins with the Free Application for Federal Student Aid, better known as the FAFSA. The FAFSA is used by the federal government, states and colleges to help determine what types of financial aid a student may be eligible to receive.
The 2026–27 FAFSA is currently available, and the maximum Federal Pell Grant award for the award year is $7,395.
Understanding how each type of aid works can help students compare their options before deciding how much to borrow.
What Is the FAFSA?
The FAFSA is the federal application used to apply for financial aid for college, career school and graduate school.
Completing the FAFSA can make a student eligible for consideration for several types of assistance, including:
- Federal grants
- Federal Work-Study
- Federal student loans
- Some state financial aid
- Some college and university financial aid
- Certain scholarships
The FAFSA is free to complete. Students generally need to submit a new FAFSA each year they want to be considered for federal student aid.
The information provided on the FAFSA is used to calculate a student’s Student Aid Index, or SAI. The SAI is an index used by schools when determining a student’s financial aid eligibility. It is not a bill, a dollar amount that a family is expected to pay, or the amount of financial aid a student will receive.
Is there an income limit for the FAFSA?
There is no single income cutoff that determines whether a student can complete the FAFSA.
Federal Student Aid encourages students to complete the FAFSA regardless of income if they want to be considered for financial aid. Different types of aid have different eligibility requirements, and the FAFSA can also be used by states and schools when awarding their own aid.
That means a student should not assume they will receive no financial aid simply because their household income is above a particular amount.
How Much Is the Maximum Pell Grant in 2026–27?
The maximum Federal Pell Grant award for the 2026–27 award year is $7,395.
Pell Grants are generally intended for undergraduate students who demonstrate financial need and have not already earned a bachelor’s, graduate or professional degree, although there are some exceptions under federal rules.
Unlike a student loan, a Pell Grant generally does not have to be repaid. However, there are circumstances in which a student may have to repay some or all of a grant, such as withdrawing from school or having their enrollment status change in a way that affects eligibility.
The maximum award does not mean every eligible student receives $7,395. The amount a student receives depends on factors including the information reported on the FAFSA, enrollment status, the school’s cost of attendance and other eligibility requirements.
Can Pell Grants be used for community college?
Yes. Federal Student Aid says Pell Grant funds can be used at eligible two-year community colleges as well as eligible career schools, trade schools, online schools and four-year colleges and universities.
For some students, attending a lower-cost school while using grants and scholarships can reduce the amount they need to borrow.
How Is Pell Grant Eligibility Determined?
Pell Grant eligibility is based on more than simply looking at a student’s income.
Federal Student Aid says factors used in determining eligibility can include family size, tax filing status and federal poverty guidelines, along with information provided on the FAFSA.
The FAFSA Submission Summary can include an estimate of a student’s Pell Grant eligibility. However, the estimate is not the same as a final financial aid offer.
The school determines the student’s actual financial aid package after reviewing the FAFSA information and other applicable factors.
What Is a FAFSA Submission Summary?
After the FAFSA is processed, students receive a FAFSA Submission Summary.
The summary includes information such as:
- The student’s Student Aid Index
- Estimated federal student aid eligibility
- FAFSA responses
- The schools listed on the FAFSA
- Additional steps the student may need to complete
It is important to review the summary for errors or missing information.
The FAFSA Submission Summary is not a financial aid offer. A financial aid offer comes from a college or career school after the student has been admitted and the school has determined what aid it can offer.
Grants vs. Student Loans
One of the most important distinctions in financial aid is the difference between a grant and a loan.
Grants
Grants generally do not have to be repaid as long as the student continues to meet the applicable requirements.
The federal government offers several types of grants, including:
- Federal Pell Grants
- Federal Supplemental Educational Opportunity Grants, or FSEOG
- Teacher Education Assistance for College and Higher Education, or TEACH Grants
For 2026–27, the maximum Federal Pell Grant is $7,395. FSEOG awards can be up to $4,000 per year for eligible students, while TEACH Grants can provide up to $4,000 per year for eligible students who meet the program’s requirements.
Not every school participates in every federal grant program, and eligibility requirements differ.
Student loans
Student loans are borrowed money that must generally be repaid, usually with interest.
Federal student loans can offer protections and repayment options that differ from private loans. Students should review the terms of a loan and understand how much they would owe before accepting it.
A financial aid package may include both grants and loans. Students do not necessarily have to accept every type of aid offered.
What Is Federal Work-Study?
Federal Work-Study provides eligible students with an opportunity to earn money through part-time employment while attending school.
Work-study is different from a grant because the student generally earns the money by working rather than receiving the full amount as an upfront award.
A student must complete the FAFSA to be considered for Federal Work-Study. Eligibility does not guarantee that a student will receive a work-study job because participating schools and employers have a limited amount of work-study funding and available positions.
If work-study is included in a financial aid offer, students should ask their school’s financial aid office about available jobs, hourly pay, scheduling and how wages are paid.
What About Scholarships?
Scholarships can be another way to reduce the amount a student needs to pay out of pocket or borrow.
Scholarships may be offered by:
- Colleges and universities
- State agencies
- Community organizations
- Foundations
- Employers
- Professional organizations
- Other private organizations
Scholarships can have very different requirements. Some are based on academic achievement, while others may consider financial need, a student’s field of study, community involvement, athletics, employment or other criteria.
Students should pay attention to application deadlines and requirements.
The Federal Student Aid website also recommends looking beyond federal aid and checking with schools, state agencies and other organizations for additional sources of financial assistance.
Be cautious about scholarship opportunities that ask for unnecessary fees or sensitive personal information. A legitimate scholarship should clearly explain its eligibility requirements, application process and organization behind the award.
Could Community College Reduce College Costs?
Community college can be one option for students looking to manage education costs.
Two-year colleges may offer lower tuition than some four-year institutions, and eligible students can use federal financial aid at participating schools.
Pell Grant funds can be used at eligible community colleges, provided the student and school meet the applicable federal requirements.
Students considering community college can compare:
- Tuition and fees
- Financial aid
- Housing and transportation costs
- Books and supplies
- Program length
- Transfer opportunities
- Whether credits will transfer to another school
- Graduation rates and program outcomes
The lowest tuition price is not necessarily the only cost that matters. Looking at the overall cost of attendance can provide a more complete picture.
Can an Employer Help Pay for College?
Some employers offer education assistance as part of their employee benefits.
Employer assistance can potentially help cover tuition, fees, books or other qualified education expenses, depending on the employer’s program and applicable tax rules.
Students who are working while attending school can ask their employer’s human resources department whether tuition assistance, reimbursement or another education benefit is available.
It is also worth asking about requirements. Some employer programs require employees to remain with the company for a certain period of time or meet academic requirements.
How Can Students Reduce the Amount They Borrow?
Financial aid does not have to come entirely from student loans.
A student may be able to reduce borrowing by combining several sources of assistance.
Some options include:
Complete the FAFSA every year
Submitting the FAFSA allows students to be considered for federal financial aid and can also be important for state and school-based aid.
Apply for scholarships
Even smaller scholarships can reduce the amount a student needs to pay from savings or borrow.
Compare schools
Financial aid offers and total costs can vary significantly between schools. Compare the full cost of attendance rather than looking only at advertised tuition.
Consider lower-cost programs
Community colleges, public institutions and shorter career programs may offer different cost structures than private four-year colleges.
Consider working while enrolled
Part-time employment or Federal Work-Study may provide income that can be used toward education expenses.
Review the entire financial aid offer
A financial aid offer can contain grants, scholarships, work-study and loans. Students should look at each category separately rather than treating the entire offer as money they have to accept.
What Should You Know Before Accepting a Student Loan?
Before accepting a federal student loan, look at the amount you actually need to borrow.
It can be tempting to accept the entire loan amount offered by a school, particularly when the funds are available to cover living expenses. However, borrowing more means having more to repay later.
Students should consider:
- How much they need for tuition and other education expenses
- How much grant and scholarship aid they already have
- Whether they have savings or income available
- The loan’s interest rate
- The expected monthly payment
- The total amount that will be repaid
- Available repayment options
- Whether they expect to need additional loans in future years
Federal Student Aid provides tools for comparing repayment options and estimating payments.
What Changed With Federal Student Loans in 2026?
Federal student loan rules changed in 2026, making it particularly important for students and borrowers to check current information rather than relying on older articles.
Under the current Federal Student Aid guidance, loans first disbursed on or after July 1, 2026 are subject to a new repayment structure that includes the Tiered Standard Plan. Eligible borrowers also have access to income-driven repayment options depending on when their loans were disbursed and other requirements.
Federal Student Aid also states that borrowers enrolled in automatic payments receive a 1% interest-rate reduction beginning July 1, 2026, subject to the applicable program rules.
Because repayment options can depend on the type and timing of a loan, students should review the current information on StudentAid.gov before choosing a repayment strategy.
What Happens After You Submit the FAFSA?
Completing the FAFSA is only the first part of the financial aid process.
After submitting the form, students should:
- Check the FAFSA confirmation information.
- Review the FAFSA Submission Summary.
- Correct any errors.
- Complete any additional requirements from their state or school.
- Apply for scholarships.
- Compare schools and total costs.
- Review financial aid offers carefully.
Federal Student Aid notes that some students may be selected for verification. Verification does not necessarily mean the student did anything wrong. If selected, the student may need to provide additional documentation to the school.
What If You Don’t Receive Enough Financial Aid?
A financial aid offer may not cover the entire cost of attending college.
If there is still a gap, students can talk with the school’s financial aid office about their options. Depending on the circumstances, additional options could include scholarships, payment plans, employment, savings or other forms of assistance.
It can also be useful to compare the financial aid offer with the school’s total cost of attendance.
A school may offer more financial aid in dollar terms but still cost more overall than another school after tuition, housing, food and other expenses are considered.
Frequently Asked Questions About College Financial Aid in 2026–27
How much is the Pell Grant for 2026–27?
The maximum Federal Pell Grant award for the 2026–27 award year is $7,395. The amount a particular student receives can be lower depending on their eligibility, enrollment and other factors.
Is the FAFSA free?
Yes. The FAFSA is the Free Application for Federal Student Aid and is used to apply for federal student aid. The official FAFSA is available through StudentAid.gov.
Do I have to repay a Pell Grant?
Generally, Pell Grants do not have to be repaid. However, federal rules identify circumstances in which a student may have to repay some or all of a grant, such as withdrawing from school or having an enrollment change that reduces eligibility.
Can I get financial aid if my family makes too much money?
You should not assume that you are ineligible based solely on household income. Different types of financial aid have different eligibility requirements, and the FAFSA is also used by states and schools when awarding certain forms of aid.
Can adults go back to college and receive a Pell Grant?
Age alone does not prevent an undergraduate student from receiving a Pell Grant. Federal Student Aid states that an undergraduate student of any age may be eligible if they meet the applicable requirements and have not already earned a bachelor’s, graduate or professional degree, subject to federal exceptions.
Can Pell Grants be used for trade school?
Pell Grant funds can be used at eligible career schools and trade schools as well as qualifying colleges and universities. The school and student must meet applicable federal requirements.
Is the FAFSA required for scholarships?
Not every scholarship requires the FAFSA. However, some scholarships and many forms of federal, state and school-based financial aid use FAFSA information when determining eligibility.
Is work-study free money?
Federal Work-Study is not a grant. Students generally earn work-study funds by working in an eligible part-time position. Availability of jobs and funding varies by school.
Should I accept every student loan offered by my college?
No. A financial aid offer may include more loan funding than you actually need. Students can review the cost of attendance, other financial aid and expected expenses before deciding how much to borrow.
When should I complete the FAFSA?
The 2026–27 FAFSA is currently available. Federal, state and school deadlines can differ, so students should check the deadlines that apply to their circumstances.
Bottom Line
There are several ways to pay for college, and student loans are only one part of the financial aid system.
For the 2026–27 award year, the maximum Federal Pell Grant is $7,395, but the actual amount a student receives depends on their individual circumstances and enrollment. The FAFSA is the starting point for federal student aid and may also be used by states and schools when determining eligibility for other forms of assistance.
Students can also look at scholarships, Federal Work-Study, employer education assistance and lower-cost education options such as community college.
If loans are necessary, understanding the amount borrowed and the available repayment options can help students make informed decisions. Federal student loan rules changed in 2026, so current information from StudentAid.gov should be used when reviewing repayment options.
Financial aid can vary from one student and school to another. The most reliable way to find out what assistance may be available is to complete the FAFSA and then review the financial aid information provided by the schools you are considering.
By Cassandra Ortega –