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News and Updates About Federal Financial Aid & the FAFSA: Students | Practitioners

For Practitioners: News and Updates About Federal Financial Aid & the FAFSA

Updated as of 3/4/26

What is the status of FAFSA and financial aid right now?

The 26-27 FAFSA is open! We encourage students to complete their FAFSA and state financial aid forms. 

What is happening with the Pell Grant?

The Federal Pell Grant maximum award amount for the 2026–27 award year (July 1, 2026, through June 30, 2027) remains fixed at $7,395. 

What is happening with the SAVE student loan repayment program?

There has been ongoing litigation brought by Missouri, on behalf of several states, against the Department of Education in an effort to end the Saving on a Valuable Education (SAVE) loan repayment plan. On Monday, March 9, the US Court of Appeals for the 8th Circuit issued a judgment that reversed an earlier lower district court’s dismissal of the lawsuit. This Court of Appeals judgment directs the lower court to make a final judgment on the settlement agreed upon between ED and Missouri, which would effectively end the SAVE program. The Department of Education will issue guidance in the “coming weeks” on next steps for borrowers enrolled in the SAVE plan, including information on how to move to another repayment plan. 

Also on Monday, March 9, a group of borrowers filed a separate lawsuit in response to the lower court’s dismissal of the lawsuit, requesting that the Department of Education fully implement the SAVE repayment program.

Questions remain for the 7 million borrowers still enrolled in SAVE, including whether they are still in forbearance, the status of their debt cancellation, and if and how they will be re-enrolled in a new payment plan. Borrowers in the SAVE program have not been required to make payments during the legal challenges because they were placed in forbearance. Their loans have been accruing interest since August.

Under HR 1 (the One Big Beautiful Bill Act), the SAVE repayment program will be eliminated as of July 1, 2028. We will share more updates and guidance as they become available. 

What is happening with the Department of Education?

On March 20, 2025, President Trump signed an executive order (EO) stating that the Secretary of Education shall, “to the maximum extent appropriate and permitted by law, take all necessary steps to facilitate the closure of the Department of Education.” Since then, the President has laid off a substantial share of the Department’s staff as part of Reductions in Force (RIF).

There have been interagency agreements signed to move some programs of the Department of Education to other agencies. There have also been lawsuits filed against the Trump Administration alleging some of the reductions in force and moving programs to other agencies are illegal. This is a continuously evolving situation. Currently, the Office of Federal Student Aid and all of the FAFSA, student aid grants, and student loans continue to be housed at the Department of Education.

What is the “One Big Beautiful Bill Act” or H.R. 1?

President Trump signed the “One Big Beautiful Bill Act”. This bill was passed along party lines by the Republicans using a process called reconciliation which allows certain revenue and spending policies to be passed by a simple majority. The bill cuts revenue by $4.5 trillion over the next ten years by making income tax cuts passed in 2017 permanent. The Congressional Budget Office predicts a $3.4 trillion increase in the deficit over ten years. The bill cuts $3.5 trillion in spending cuts over ten years, mostly targeting federal social programs.

The bill makes changes to the student loan program, student loan repayment options, types of programs eligible for the Pell Grant, financial aid eligibility calculations, and higher education institution accountability rules. The bill also impacts healthcare, nutrition benefits, immigration enforcement, and other government programs. For a full analysis of the impact on financial aid, check out uAspire’s blog post.

What is happening with Public Service Loan Forgiveness?

On March 7, 2025, President Trump signed an executive order, “Restoring Public Service Loan Forgiveness,” limiting who qualifies for PSLF. The Department of Education has finalized regulations and posted them to the Federal Register. These go into effect July 1, 2026. There have been two lawsuits against these regulations alleging they are illegally narrowing what types of employers can be eligible for PSLF. For links to the lawsuits and an overview, see this post.  

What is happening to borrowers whose student loans are in default?

The Office of Federal Student Aid (FSA) is still pausing collections of loans that are in default. Technically, a borrower is considered in default when they have entered repayment and then fail to make a loan payment for at least 270 days. This does not apply to students who have taken out a loan and repayment has not yet started because they are still enrolled or are in their grace period. 

People can check the status of their student loans by logging into StudentAid.gov. The online dashboard shows how much debt they owe and to whom, their monthly payment amount, and if they are in default or not. If someone checks the dashboard and there is a discrepancy between the dashboard and their loan servicer portals, they should call their loan servicer and confirm their actual balance and due dates. 

To learn more about the loan rehabilitation program and consolidation, StudentAid.gov/manage-loans has more information. Borrowers in default should go to the Default Resolution Group website to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. 

Immigration Policy and Student FAFSA Data Privacy

On April 7, 2025, the Department of Homeland Security and the Internal Revenue Service signed a memorandum of understanding. This means ICE officers can ask the IRS for information about immigrants who have final orders of removal or are under criminal investigation, including for failing to leave the country after 90 days. This is a substantial change in how IRS data are used. Previously, IRS policy encouraged immigrants to pay taxes, and assured undocumented taxpayers that their information is confidential. There have been lawsuits alleging that this data-sharing agreement is illegal. This AP article has more information.

The data-sharing agreement between ICE and the IRS does not grant access to FAFSA data. FAFSA data is distinct from the information maintained by the IRS. To our understanding, this data-sharing agreement will not impact the use of the Direct Data Exchange (DDX) on the FAFSA. Granting consent for the use of the DDX does not present any additional risk of information exposure.

From what we understand now, there is no additional risk to completing the FAFSA for those who have filed their taxes using an ITIN (Individual Taxpayer Identification Number). For those who do not have an ITIN, we recommend that they make their own decision as to whether to create one or not.

uAspire suggests these resources provided by immigration policy experts.

Explainers:

State-specific lists of immigration law and service providers

General legal rights resource regarding if one is stopped, arrested, or detained:

Higher Education and the Courts

Several higher education issues are currently subject to litigation. Inside Higher Ed has a tracker that provides information on the status of many lawsuits relevant to higher education.