Financial Aid Unlocked: What Every Family Needs to Know Right Now

College is an expensive investment.  It requires planning and understanding of the general landscape. There have been changes due to the new tax bill that will impact college students, transfers, graduate, and professional school applicants.  Before we dive into the details, let's review some common definitions.

Need vs. Merit Aid

Need-based aid is dependent on your family’s financial circumstances and is determined by your Student Aid Index, or SAI. The FAFSA calculates your SAI and represents the dollar amount that the Federal Government has determined that your family can pay per year for college.

Your SAI amount is subtracted from the Total Cost of Attendance at a college.  The remaining amount is your "need".  Need-based aid can come from federal sources (Pell Grants, loans, work-study), state sources, or institutions themselves.

Merit Aid

Merit aid is awarded based on a student’s application.  Colleges take into account academic achievement, test scores, specific talents, community involvement, leadership, or other criteria defined by the institution. Merit aid is not connected to your income.

A student who is academically strong relative to a school’s typical admitted class may be offered significant merit aid as an incentive. The same student, applying to a school where they are in the middle of the pack, may receive nothing.

Public Law 119-37

The newly signed Public Law 119-37 has changed the limits on how much federal assistance families may receive.

The Federal Pell Grant Amounts: $740.00 - $7,395

Federal Loan Limits for Dependent Undergraduates:

$5,500 for freshmen

$6,500 for sophomores

$7,500 for juniors and seniors

*But there is now a total cap of $31,000 over four years.

Parent PLUS Loans will be capped at $20,000.00 per year with a lifetime maximum of $65,000.00.  Parents may continue to borrow under the current rules (up to the full Cost of Attendance) for up to three additional years if:

• The student they are borrowing for is enrolled in the same program they were attending before July 1, 2026.

• The parent borrowed a Parent PLUS loan for that student before July 1, 2026.

Graduate & Professional Aid

Beginning July 1, 2026, new federal student loan limits for graduate students will cap annual borrowing at $20,500 ($100,000 aggregate) for general programs and $50,000 annually ($200,000 aggregate limit excluding undergraduate loans) for professional programs (law, medicine, etc.).

• Grad PLUS Loans will no longer be available to new borrowers.

• Students who borrowed Graduate PLUS loans in the 2025-26 academic year may be able to continue borrowing up to the full cost of attendance through June 30, 2029.

A new total lifetime aggregate limit of $257,500.00 per student will apply across all federal loans, including undergraduate plus graduate borrowing.

What Does All of This Mean?

9th-12th Students

The new total aggregate limit per student will require families to pre-plan if they believe their student may want to continue on to graduate or professional school.  

Transfer Applicants

Many institutional merit scholarships are not available to transfer students or are available at reduced amounts, but transfers can still complete the FAFSA and qualify for Pell Grants, loans, and work-study. Before you commit to a school, ask the financial advisor what aid is available.

Graduate and Professional Applicants

Fellowships, assistantships, and employer tuition benefits should be researched to provide additional funding. The new funding limits will not be enough to cover the full cost of professional programs and some graduate programs. Some doctoral programs have small amounts of funding that students can receive; check with each program to which you are applying. 

Financial Aid Forms

The FAFSA (Free Application for Federal Student Aid)

Link: https://studentaid.gov/h/apply-for-aid/fafsa

Completing the FAFSA qualifies your student for Pell Grants, federal loans, and work-study. It is also required by many colleges and universities for institutional aid.

Key things to know:

• It opens each October 1 for the following academic year.

• It uses “prior-prior year” tax data.

• You’ll list all schools you are considering, up to 20, and each school will receive your information directly from the federal processor.

• It determines your Student Aid Index (SAI)

• The FAFSA should be completed every year in order to keep receiving federal aid.

The CSS Profile

Link: https://cssprofile.collegeboard.org/

The CSS Profile is administered by the College Board. It is required by approximately 250 private colleges and universities. The CSS Profile asks about home equity, business assets, retirement accounts, child support, non-custodial parent income, and other financial factors that the FAFSA does not capture.

*The FAFSA and the CSS Profile have school-specific priority deadlines. Always double-check deadlines on the school’s Financial Aid website.

Private Scholarships

Private scholarships are funded by community foundations, corporations, professional associations, nonprofits, religious organizations, and civic groups. Private scholarships can be time-consuming and tedious to find and are often competitive.

Where to Look for Private Scholarships:

Start with local community foundations, employers, professional associations, and civic organizations (Rotary, Lions Club, etc.). Beware of any scholarship that requires a fee to apply; legitimate scholarships do not charge applicants.

An Often Unknown Fact

Schools are required to factor private scholarships into their aid package. If you win $5,000 from an outside source, your school may reduce your institutional grant by some or all of that amount, a practice called “scholarship displacement.” Ask each school’s financial aid office directly how they handle outside scholarships.

A Special Note for Graduate and Professional Students

Private scholarships specifically for graduate and professional students exist, but are less abundant than at the undergraduate level. Many are field-specific nursing, public health, social work, education, STEM disciplines, and tied to commitments to serve underrepresented communities or work in public interest roles.

Financial Aid Tools

These two tools are free, accessible, and genuinely useful for families at any stage.

The Net Price Calculator (NPC)

Every college that receives federal financial aid is required by law to publish a Net Price Calculator on its website. The NPC allows families to enter their financial information and receive an estimate of what their out-of-pocket cost might be at that institution. The estimate is not a guarantee. It is a planning tool, not an official offer.

The FAFSA Aid Estimator

Link: https://studentaid.gov/aid-estimator/

The Federal Student Aid office provides a forecasting tool that allows families to estimate their federal aid eligibility before filing the FAFSA. This is particularly useful for families who are planning; it gives families an early read on their likely need-based federal aid eligibility.

If you have questions, contact me!