The 2025–26 FAFSA: A Step-by-Step Guide for Parents (with smart tips you’ll wish you knew sooner)

Twitter

If you have a college-bound student, the FAFSA is the key that unlocks federal grants, work-study, and college scholarships.


Quick note on timing: FAFSA cycles run by “award year.” For 2025–26 (college attendance between July 1, 2025–June 30, 2026), you’ll use 2023 tax info. Deadlines vary by state and school, so file as early as you can and then check your state’s page. Federal Student Aid

What you’ll get by filing (even if you think you “make too much”)

  • Grants: Need-based funds that don’t have to be repaid (e.g., Federal Pell Grant—maximum $7,395 for 2025–26). 

  • Work-Study: On-campus/approved off-campus jobs that help cover costs. 

  • Federal loans: Low fixed rates and borrower protections most private loans don’t offer.

  • State & college aid: Many programs auto-screen off your FAFSA. Don’t leave free money on the table.Check potential aid in advance with the Federal Student Aid Estimator. 

Before you start: Set yourself up for a smooth filing

  1. Create StudentAid.gov accounts (FSA IDs) for the student and every “contributor.”
    Contributors are anyone required to provide info—typically the student, a spouse (if married), and a parent/stepparent for dependent students. Each contributor signs in with their own account. Verification with Social Security can take 1–3 days, so do this step first.
    • Create account: studentaid.gov/fsa-id
    • What a “contributor” is: see the definitions on the FAFSA help page. 

No SSN? Parents/contributors without an SSN can still make a StudentAid.gov account and complete their sections—follow the “What if I don’t have a Social Security number?” path during account creation. 

  1. Know who the “FAFSA parent” is (for divorced/separated families).
    For dependent students, FAFSA uses the parent who provided more financial support in the last 12 months (not the one the student lived with more). If support is equal, use the parent with higher income. Use the Who’s My Parent? wizard if you’re unsure. 

  2. Gather documents (you won’t upload most of these, but you’ll reference them):

  • Social Security numbers, dates of birth, and addresses for all contributors

  • 2023 federal tax return(s) and W-2s (for 2025–26)

  • Current balances for cash, checking/savings, 529 plans, investments, and the net worth of any businesses or farms you (or contributors) own (as of the day you sign)

  • A-Number for eligible non-citizens
    Checklist: What Students Need for FAFSA (also explains how assets are reported as of the day you file). What counts as an “investment”? See Current Net Worth of Investments.

FAFSA, step by step (2025–26 example)


Step 1 — Log in at studentaid.gov/fafsa with the student’s account and start a new form for the correct award year. Invite your contributors from inside the form.

Step 2 — Everyone gives consent to securely import federal tax info via the IRS Direct Data Exchange (DDX).
If a required contributor doesn’t provide consent, the student won’t be eligible for federal student aid. This is the #1 cause of rejections, so watch for the consent screens.

Step 3 — The form pulls tax data automatically for each consenting contributor (no manual typing!). You’ll still answer a few financial questions. 

Step 4 — Report your current assets (balances today, not last year). Include 529 plans (see tips below). For 2025–26, all business/farm net worth is reportable; the old small-business/family-farm exclusions no longer apply.

Step 5 — Add colleges to receive your FAFSA. You can list up to 20 schools online. If you have more, submit with 20, then come back and add/remove schools to send it to the rest.

Step 6 — Review & sign.
Each contributor signs their own section with their StudentAid.gov account. Missing signatures or missing consent will stall processing.

Step 7 — Watch for your FAFSA Submission Summary.
This arrives in your StudentAid.gov Dashboard and shows your official Student Aid Index (SAI) plus flags or next steps. You can make corrections right from there. 

Step 8 — Compare aid offers from schools. Use the Department of Ed’s guide to evaluate “net price” and loan vs. grant mix.

Smart, fully-above-board “loopholes” (really: lesser-known rules that help)

  1. Pick the right parent of record.
    FAFSA asks for the parent who provided more financial support in the last 12 months. That’s a factual test—not a permanent assignment. If that parent truly provided more support, you’ll use their info (and their spouse’s if remarried). This can materially change your SAI. Don’t guess; use the official wizard.

  2. Assets are a “snapshot” the day you sign.
    You report current cash/investments. Paying due bills (e.g., rent, credit card) before you file naturally lowers your checking balance—perfectly legitimate. Keep documentation. (Official guidance: assets are “the amounts as of the date you sign.”)

  3. Know what doesn’t count as an investment.
    Your primary home’s equity is not reported on FAFSA. Retirement accounts are also excluded; see the official list for what to include/exclude.

  4. 529 plan treatment matters.

  • Parent-owned 529s are reported as parent assets (generally the most favorable category).

  • Distributions from grandparent/relative-owned 529s are not reported as student income on the new FAFSA, because the old “cash support” question is gone. (Colleges that also require the CSS Profile may still ask about non-parent 529s.)

  1. “Number in college” no longer reduces aid.
    Under the new Student Aid Index (SAI), having multiple children in college at the same time doesn’t automatically lower your index the way it used to—plan accordingly.

  2. Professional judgment (aid appeals) is real.
    If your current finances aren’t reflected by last year’s taxes—job loss, medical bills, divorce—ask each school’s aid office about a special circumstances review (sometimes called a “PJ” or aid adjustment).

Common pitfalls to avoid

  • Starting without accounts: Create StudentAid.gov accounts for the student and every contributor before you begin; identity matching can take 1–3 days.

  • Missing consent: If any required contributor fails to give consent for DDX, the student won’t be eligible for federal aid.

  • Listing too few colleges: You can list up to 20—use them. Add more later if needed.

  • Falling for scams: The FAFSA is always free and only at .gov. Be wary of anyone asking for payment or your login.

After you submit

  • Read your FAFSA Submission Summary carefully and fix any issues right away (“Make a Correction” is built in). Contributors can correct their own sections, too.

  • Didn’t get enough aid? Ask schools about aid adjustments and keep applying for outside scholarships.

  • Add colleges later from your Dashboard: “Add or Remove Schools.”

Fast links (bookmark these)

Jargon buster: SAI (Student Aid Index)

Old term EFC is gone—schools now use your SAI (can even be negative) as the index to determine need. Lower SAI = greater need. You’ll see your SAI on your FAFSA Submission Summary after processing. 

Final tip for parents

File the FAFSA every year your student might need aid—even if you’re unsure you’ll qualify. Life (and finances) change, and so do aid rules. The quickest wins come from filing early, listing every potential college, and triple-checking that all contributors created accounts, consented, and signed.



© 2025 Crescent City College Consulting