--- title: "Navigating FAFSA & Student Loans: Funding Your Education | BenefitKarma" meta: author: BenefitKarma description: "The FAFSA is the first step to funding your higher education. We'll tell you what the form does, the programs it helps you access, and how to file it." keywords: "government programs, federal benefits, benefit eligibility, family assistance, housing programs, food assistance" "og:description": "The FAFSA is the first step to funding your higher education. We'll tell you what the form does, the programs it helps you access, and how to file it." "og:title": "Navigating FAFSA & Student Loans: Funding Your Education" "twitter:description": "The FAFSA is the first step to funding your higher education. We'll tell you what the form does, the programs it helps you access, and how to file it." "twitter:title": "Navigating FAFSA & Student Loans: Funding Your Education" --- [BENEFITKARMA](https://benefitkarma.com/) [Find Benefits](https://benefitkarma.com/find-benefits) Learn [Tools](https://benefitkarma.com/tools) Resources [About](https://benefitkarma.com/about) [Sign In](https://benefitkarma.com/welcome?mode=signin)Subscribe [Benefits Newsroom](https://benefitkarma.com/) - / [SSDI Waiting Period 2027: How Long Until You're Approved?](https://benefitkarma.com/articles/health-disability/the-ssdi-waiting-period-how-long-until-you-re-approved) - / [VA Survivor Benefits 2027: A Guide for Families](https://benefitkarma.com/articles/military-veterans/understanding-va-survivor-benefits-a-guide-for-families) - / [CCDF Child Care Assistance in 2027: Who Qualifies and How to Apply](https://benefitkarma.com/articles/family-education/child-care-and-development-fund-ccdf) - / [LIHEAP 2026-27: Heating Help Is Open — How to Apply in Your State](https://benefitkarma.com/articles/benefits-in-the-news/liheap-2026-27-how-to-apply) - / [Student Loan Forgiveness Programs: What You Need to Know](https://benefitkarma.com/articles/family-education/student-loan-forgiveness-programs-what-you-need-to-know) - / [SSA Blue Book 2027: How Social Security Disability Listings Work](https://benefitkarma.com/articles/health-disability/ssa-blue-book) - / [Head Start Rule Changes: What Happens Next and What It Could Mean for Your Family](https://benefitkarma.com/articles/benefits-in-the-news/head-start-rule-changes-what-happens-next-and-what-it-could-mean-for-your-family) - / [TANF: How to Get and Use Temporary Assistance for Needy Families](https://benefitkarma.com/articles/housing-essentials/tanf-how-to-get-and-use-temporary-assistance-for-needy-families) - / [GI Benefits Restored for Veterans Discharged Over Covid Vaccine](https://benefitkarma.com/articles/benefits-in-the-news/gi-benefits-restored-for-veterans-discharged-over-covid-vaccine) - / [Healthcare and Disability Benefits: Help With Medical Costs and Lost Income](https://benefitkarma.com/articles/health-disability/understanding-healthcare-and-disability-benefits-a-simple-guide) - / [SSDI Waiting Period 2027: How Long Until You're Approved?](https://benefitkarma.com/articles/health-disability/the-ssdi-waiting-period-how-long-until-you-re-approved) - / [VA Survivor Benefits 2027: A Guide for Families](https://benefitkarma.com/articles/military-veterans/understanding-va-survivor-benefits-a-guide-for-families) - / [CCDF Child Care Assistance in 2027: Who Qualifies and How to Apply](https://benefitkarma.com/articles/family-education/child-care-and-development-fund-ccdf) - / [LIHEAP 2026-27: Heating Help Is Open — How to Apply in Your State](https://benefitkarma.com/articles/benefits-in-the-news/liheap-2026-27-how-to-apply) - / [Student Loan Forgiveness Programs: What You Need to Know](https://benefitkarma.com/articles/family-education/student-loan-forgiveness-programs-what-you-need-to-know) - / [SSA Blue Book 2027: How Social Security Disability Listings Work](https://benefitkarma.com/articles/health-disability/ssa-blue-book) - / [Head Start Rule Changes: What Happens Next and What It Could Mean for Your Family](https://benefitkarma.com/articles/benefits-in-the-news/head-start-rule-changes-what-happens-next-and-what-it-could-mean-for-your-family) - / [TANF: How to Get and Use Temporary Assistance for Needy Families](https://benefitkarma.com/articles/housing-essentials/tanf-how-to-get-and-use-temporary-assistance-for-needy-families) - / [GI Benefits Restored for Veterans Discharged Over Covid Vaccine](https://benefitkarma.com/articles/benefits-in-the-news/gi-benefits-restored-for-veterans-discharged-over-covid-vaccine) - / [Healthcare and Disability Benefits: Help With Medical Costs and Lost Income](https://benefitkarma.com/articles/health-disability/understanding-healthcare-and-disability-benefits-a-simple-guide) Updated November 15, 2026 1. [Home](https://benefitkarma.com/) 2. 3. [Articles](https://benefitkarma.com/articles) 4. 5. [Family & Education](https://benefitkarma.com/articles/category/family-education) 6. 7. FAFSA and Student Loans in 2026–27: How to Pay for College Under the New Rules # FAFSA and Student Loans in 2026–27: How to Pay for College Under the New Rules Family & Education Nov 4, 2026 ·Updated Nov 10, 2026 7 min read By BenefitKarma Team [#Pell Grants](https://benefitkarma.com/articles/tag/pell-grants) [#FAFSA & Student Aid](https://benefitkarma.com/articles/tag/fafsa) [#2026 Policy Changes](https://benefitkarma.com/articles/tag/policy-changes-2026) [#HRAs, FSAs & HSAs](https://benefitkarma.com/articles/tag/hra-fsa) The FAFSA is the first step to funding your higher education. We'll tell you what the form does, the programs it helps you access, and how to file it.  ## On this page 1. [What is the FAFSA?](#what-is-the-fafsa) 2. [Which FAFSA should you fill out now?](#which-fafsa-should-you-fill-out-now) 3. [What kinds of aid does the FAFSA unlock?](#what-kinds-of-aid-does-the-fafsa-unlock) 4. [Grants: money you don't repay](#grants-money-you-dont-repay) 5. [Work-study: money you earn](#work-study-money-you-earn) 6. [Loans: money you repay with interest](#loans-money-you-repay-with-interest) 7. [How much can you borrow in federal student loans?](#how-much-can-you-borrow-in-federal-student-loans) 8. [Undergraduate loans (unchanged)](#undergraduate-loans-unchanged) 9. [Graduate and professional loans (new limits)](#graduate-and-professional-loans-new-limits) 10. [Parent PLUS loans (new caps)](#parent-plus-loans-new-caps) 11. [2026–27 interest rates](#202627-interest-rates) 12. [How does repayment work now?](#how-does-repayment-work-now) 13. [If you take out any new loan on or after July 1, 2026](#if-you-take-out-any-new-loan-on-or-after-july-1-2026) 14. [If all your loans are from before July 1, 2026](#if-all-your-loans-are-from-before-july-1-2026) 15. [When is the FAFSA due?](#when-is-the-fafsa-due) 16. [Can the FAFSA get you free tuition?](#can-the-fafsa-get-you-free-tuition) 17. [What should you do next?](#what-should-you-do-next) 18. [The bottom line](#the-bottom-line) Paying for college starts with one form: the **[Free Application for Federal Student Aid](https://benefitkarma.com/glossary/fafsa) (FAFSA)**. It's the gateway to federal grants, work-study jobs and student loans, and many states and colleges use it to hand out their own aid too. Free DIY tool Benefit Eligibility Screener What benefits might I qualify for? Answer a few questions and see VA, disability, food, housing, and health programs that may fit you. [Try the free tool](https://benefitkarma.com/benefit-eligibility-screener) The rules around that aid changed in a big way on July 1, 2026. Congress capped some loans, ended one entirely, and replaced most repayment plans for new borrowers. If you're applying for the 2027–28 school year, or borrowing for the first time this year, here's what the FAFSA can get you, how federal loans work now, and what to do next. ## What is the FAFSA? The [FAFSA](https://benefitkarma.com/glossary/fafsa) is a free form from the **U.S. Department of Education** that schools use to figure out how much federal aid you can get. It's open to U.S. citizens and eligible noncitizens, such as permanent residents, who plan to attend an eligible college, university, community college or career school. The form calculates your **Student Aid Index (SAI)**, a number based on your family's income, family size and other details. Schools use your SAI to build your aid package. The lower the number, the more need-based aid you're likely to get. Most applicants can have their federal tax information pulled directly from the **Internal Revenue Service (IRS)**, which speeds things up. Dependent students need a parent (called a "contributor") to complete their part of the form and give consent for that transfer. You file a new FAFSA for every school year you want aid. It's free, and you file it at [StudentAid.gov](http://StudentAid.gov). Watch out for sites that charge a fee. ## Which FAFSA should you fill out now? Two forms are open right now: - 2027–28 FAFSA: For classes from July 1, 2027, through June 30, 2028. It opened September 23, 2026 — the earliest launch ever — and uses your 2025 tax information. This is the form for high school seniors starting college next fall and for current students returning next year. - 2026–27 FAFSA: For the current school year, if you haven't filed yet. For a rundown of what's new on the latest form, see our guide to [2027–28 FAFSA changes](https://benefitkarma.com/articles/benefits-in-the-news/2027-28-fafsa-changes). ## What kinds of aid does the FAFSA unlock? Federal aid comes in three main types, and the order matters: use free money first, earned money second, and borrowed money last. ### Grants: money you don't repay - **Federal [Pell Grant](https://benefitkarma.com/glossary/pell-grant):** The biggest federal grant for undergraduates with financial need. For the 2026–27 award year, the [maximum Pell Grant is $7,395 and the minimum is $740](https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2026-01-30/2026-27-federal-pell-grant-maximum-and-minimum-award-amounts). Your actual award depends on your SAI, your school's cost and whether you attend full time. Learn more in our [Pell Grant](https://benefitkarma.com/glossary/pell-grant) explainer. - **Workforce Pell:** New as of July 1, 2026. [Pell Grants](https://benefitkarma.com/articles/family-education/understanding-pell-grants) can now cover [approved short-term job training programs](https://www.ed.gov/about/news/press-release/us-department-of-education-issues-final-rule-create-new-workforce-pell-grant-program) lasting as little as eight weeks, in fields your state identifies as in demand. Availability depends on your state and school. - **Federal Supplemental Educational Opportunity Grant (FSEOG):** For undergraduates with exceptional need, usually Pell recipients. Awards range from $100 to $4,000 a year, but each school gets a limited pot of money, so filing early matters. ### Work-study: money you earn **[Federal Work-Study](https://benefitkarma.com/glossary/federal-work-study)** pays for part-time jobs, often on campus, so you can earn money for school costs while you study. How much you can earn depends on your school's funding and your award. See our [Federal Work-Study](https://benefitkarma.com/glossary/federal-work-study) entry for how it works. ### Loans: money you repay with interest Federal student loans come from the **William D. Ford Federal Direct Loan Program**. They usually cost less and come with more protections than private loans. ## How much can you borrow in federal student loans? ### Undergraduate loans (unchanged) Undergraduate limits didn't change in 2026. **Direct Subsidized Loans** go to students with financial need, and the government pays the interest while you're in school at least half time. **Direct Unsubsidized Loans** don't require need, and interest starts adding up right away. For dependent students, the yearly limit for both types combined is: - First year: $5,500 (up to $3,500 subsidized) - Second year: $6,500 (up to $4,500 subsidized) - Third year and beyond: $7,500 (up to $5,500 subsidized) Independent students, and dependent students whose parents can't get a [PLUS loan](https://benefitkarma.com/articles/family-education/what-is-the-parent-plus-loan-program), can borrow more: up to $9,500, $10,500 and $12,500 in those same years. ### Graduate and professional loans (new limits) Starting July 1, 2026, new graduate borrowers face caps for the first time in decades: - Graduate students: Up to $20,500 a year in Direct Unsubsidized Loans, with a $100,000 lifetime limit for graduate study. - Professional students (such as medicine or law): Up to $50,000 a year, with a $200,000 lifetime limit. - Lifetime cap on all federal student loans: $257,500, not counting Parent PLUS loans. Grad PLUS loans are closed to new borrowers. Students who already had a federal loan for their current program before July 1, 2026, can generally keep borrowing under the old rules for up to three more years or until they finish. Ask your financial aid office whether that exception applies to you. Free DIY tool Benefit Eligibility Screener What benefits might I qualify for? Answer a few questions and see VA, disability, food, housing, and health programs that may fit you. [Try the free tool](https://benefitkarma.com/benefit-eligibility-screener) ### Parent PLUS loans (new caps) Parent PLUS loans used to cover the full cost of attendance minus other aid. For new borrowing after July 1, 2026, parents can take out up to $20,000 per year and $65,000 total for each dependent student. Families who borrowed for the same student before that date may keep the old limits for a limited time. Our article on [Parent PLUS borrowers](https://benefitkarma.com/learn/parent-plus-borrowers-face-higher-loan-payments) covers what that means for repayment. ### 2026–27 interest rates Federal loan rates are fixed for the life of each loan and reset every July 1 for new loans. For loans first disbursed between July 1, 2026, and June 30, 2027, [rates are](https://fsapartners.ed.gov/fsa-print/publication/1007224): - Undergraduate loans: 6.52% - Graduate and professional unsubsidized loans: 8.07% - PLUS loans: 9.07% ## How does repayment work now? You usually start repaying six months after you graduate, leave school or drop below half-time enrollment. Which repayment plans you can use depends on when you borrowed. ### If you take out any new loan on or after July 1, 2026 You'll choose between two plans: - **Tiered Standard Plan:** Fixed monthly payments. Your term depends on how much you owe: 10 years for less than $25,000, 15 years for $25,000 to $49,999, 20 years for $50,000 to $99,999, and 25 years for $100,000 or more. - **Repayment Assistance Plan (RAP):** An income-driven plan. You pay 1% to 10% of your adjusted gross income, minus $50 a month for each dependent, with a $10 minimum. Any balance left after 30 years of payments is forgiven. If your payment doesn't cover the month's interest, the unpaid interest is waived, so your balance doesn't grow. Here's how those terms can change the cost. Say you graduate owing $27,000 at 6.52%. Under the Tiered Standard Plan, that's a 15-year term: about $236 a month and roughly $15,400 in interest. Paying the same loan off in 10 years would cost about $307 a month but only about $9,800 in interest. You can always pay more than the minimum to finish sooner. The older Graduated and Extended plans, and income-driven plans like Pay As You Earn (PAYE), aren’t available for new loans. The **Saving on a Valuable Education (SAVE)** plan has ended for everyone. ### If all your loans are from before July 1, 2026 You can generally stay on the 10-year Standard, Graduated or Extended plans, or use Income-Based Repayment (IBR) or RAP. Some older income-driven plans close by July 1, 2028. Taking out even one new loan moves you into the new rules, so weigh that before you borrow again. If you work in public service, payments under RAP and IBR can count toward **Public Service Loan Forgiveness (PSLF)**. Our guide to [PSLF Buyback](https://benefitkarma.com/learn/how-to-use-pslf-buyback-for-loan-forgiveness) explains how to recover credit for past months. You can compare plans with the federal [Loan Simulator](https://studentaid.gov/loan-simulator) before you choose. ## When is the FAFSA due? There are three deadlines, and the federal one matters least: - Your college's priority date: Often as early as November or February. Missing it can cost you school grants and limited funds like FSEOG and work-study. - Your state's deadline: Some states award aid until the money runs out. Texas's priority date for 2027–28 is January 15, 2027, and California's is March 2, 2027. Check your state on the [official FAFSA deadlines page](https://studentaid.gov/apply-for-aid/fafsa/fafsa-deadlines). - The federal deadline: June 30, 2028, for the 2027–28 FAFSA, with corrections accepted through September 12, 2028. The takeaway: file as soon as you can, ideally this fall. ## Can the FAFSA get you free tuition? The FAFSA doesn't guarantee free college, but it's the first step toward it. A full [Pell Grant](https://benefitkarma.com/glossary/pell-grant) can cover most or all of the tuition at many community colleges. Many states have tuition-free or "promise" programs that require a FAFSA, and many colleges use it to award their own grants and scholarships. Fill out the FAFSA even if you think your family earns too much. It's the only way to get federal student loans, and many schools won't consider you for their own aid without it. Then add other sources: [local scholarships](https://benefitkarma.com/learn/find-apply-local-scholarships), [grants for adult learners](https://benefitkarma.com/learn/grants-for-adult-learners), job-training help through [WIOA](https://benefitkarma.com/learn/wioa-workforce-innovation-opportunity-act-tuition), and for veterans and their families, the [GI Bill](https://benefitkarma.com/glossary/gi-bill). ## What should you do next? 1. Create your [StudentAid.gov](http://StudentAid.gov) account. Students and contributors each need one. 2. Gather your 2025 tax information and records of savings and investments. 3. File the 2027–28 FAFSA early at [StudentAid.gov](http://StudentAid.gov). 4. List every deadline for your state and each school you're considering. 5. Compare aid offers carefully. Accept grants and work-study first, then subsidized loans, and borrow only what you need. 6. Ask your financial aid office whether you qualify for any exceptions to the new loan limits. ## The bottom line The FAFSA is still the single most important step in paying for college, and filing early gives you the best shot at grant money that runs out. What's changed is the borrowing side: graduate and parent loans are capped, Grad PLUS is gone for new borrowers, and new loans come with just two repayment plans. Know those limits before you build a plan to pay for school. To see what other help you might qualify for, try our [Benefit Eligibility Screener](https://benefitkarma.com/benefit-eligibility-screener). ### Not sure what you qualify for? A quick conversation can help you understand your options. 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See support options Takes less than a minute We only share your info with a service provider if you say yes. ### Recommended Tools Take action with our free tools [<h4>Benefit Eligibility Screener</h4>Find education benefits](https://benefitkarma.com/benefit-eligibility-screener) [<h4>Find Benefits</h4>Explore training programs](https://benefitkarma.com/find-benefits) ### Get More from BenefitKarma Create a free account to unlock all features - Access premium benefit tools - Personalized benefit matching - Your personalized dashboard [Sign Up Free](https://benefitkarma.com/welcome) ### Related Articles [<h4>CCDF Child Care Assistance in 2027: Who Qualifies and How to Apply</h4>Nov 9, 2026](https://benefitkarma.com/articles/family-education/child-care-and-development-fund-ccdf) [<h4>Student Loan Forgiveness Programs: What You Need to Know</h4>Nov 9, 2026](https://benefitkarma.com/articles/family-education/student-loan-forgiveness-programs-what-you-need-to-know) [<h4>Head Start and Pre-K Programs: Who Qualifies, What’s Free & How to Apply</h4>Oct 5, 2026](https://benefitkarma.com/articles/family-education/headstart-and-pre-kindergarten-programs) ## Common questions about this guide ### What is "FAFSA and Student Loans in 2026–27: How to Pay for College Under the New Rules" about? The FAFSA is the first step to funding your higher education. We'll tell you what the form does, the programs it helps you access, and how to file it. ### Who should read this Family & Education guide? This guide is for anyone exploring family & education who wants a clear, plain-language explanation before making decisions. It is especially helpful if you are new to the process, comparing your options, or trying to understand a recent letter or update from the VA or Social Security. ### How recent is the information in this article? BenefitKarma reviews core guides at least once a year and any time the underlying program rules, pay rates, or eligibility thresholds change. Published and last-reviewed dates appear near the top of the article so you always know how current the information is. ### What should I do after reading this article? Once you understand the basics here, the next step is usually to run your own numbers using the Benefits Eligibility Screener. 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