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KEY TAKEAWAYS
- Changes made in the “One Big, Beautiful Bill” are expected to result in fewer Pell Grants for students.
- However, since the bill’s implementation has occurred so quickly, the Department of Education said some applicants may encounter errors on their Free Application for Federal Student Aid.
- If students expect to receive less federal aid, they should consider non-federal financing options like local scholarships and state-based grants.
As families begin to apply for student aid for the next school year, changes to Pell Grant rules may mean they are offered less money than in previous years.
The Free Application for Federal Student Aid for the 2026-27 academic year opened in late September. The application included adjustments to how federal student aid is calculated, as outlined in the “One Big, Beautiful Bill.”
These changes will limit the amount of federal student loans students and their families can take out and tighten eligibility requirements for the Pell Grant. Most updates to Pell Grants, the largest federal grant program, will likely result in college families being offered lower amounts.
Investopedia talked to personal finance author Brynne Conroy about the changes to Pell Grants and what families can do to prepare for the 2026-27 academic year. The interview has been edited for brevity and clarity.
Why This Matters to You
Experts suggest families fill out the FAFSA now and start exploring other scholarship options, as some are expected to receive less federal aid for the 2026-27 academic year. These federal aid changes may also lead to more students taking out private student loans, which are typically riskier and more expensive than federal loans.
INVESTOPEDIA: What are some of the most significant changes the ‘One Big Beautiful Bill’ made to the Pell Grant program?
BRYNNE CONROY: If you get a full-ride scholarship or even aid from your employer to go back to school, one of the big changes has been that if your full Cost of Attendance is covered, you will not get a Pell Grant. This is a significant change, but I don’t know if it’s as big a change as maybe the headlines are making it out to be. One of the reasons for that is that the full Cost of Attendance, a lot of people think of that as tuition and fees. However, the full Cost of Attendance is actually a bit more expansive than that. It includes things like books, housing costs, and food.
That Cost of Attendance number is passed on to the Department of Education by the school, so it’s a number calculated at the institutional level. So if you get a full ride and all your tuition and fees are covered, you may still be eligible for a Pell Grant for those extra costs.
It also used to be that if your Student Aid Index was the amount of the Pell Grant, [you would not be eligible for the grant]. But there were some exceptions for single parents with income levels that were a little bit higher than normal…. This new bill reconfigures things. It pushes the allowable amount to double the year’s Pell grant amount. However, it does make assets countable. And so there’s not really a way to “hide” income anymore.
INVESOTPEDIA: What things should families and college students prepare themselves for when filing the 2026-27 FAFSA?
CONROY: The bill is very new, and there are actually some parts of it that we don’t even know how they’ll be implemented yet.
For example, there’s this one aspect that allows for Workforce Pell Grants. [Under the program] you can get a Pell Grant now for a program that’s eight to 15 weeks and essentially trains [you for a] job that’s deemed to have met certain standards and guidelines. It essentially has to have a “good” future in the economy. The definition of a “good” program is still up in the air, and the federal government and states have until Nov. 1 to certify some of these programs.
We don’t really know how all of these things will be implemented, and it is a really short turnaround time. This bill passed in July, and it’s being implemented now. The FAFSA has already opened for the 2026-2027 school year.
INVESTOPEDIA: What non-federal resources can families and students look into if they are offered a lower Pell Grant compared to previous years?
CONROY: States offer grants that can be in the thousands of dollars, similar to a Pell Grant, but they’re administered at a state level. Whether you qualify or not depends on where you hold your residency and where you will be attending school, but that’s another great source of money for students who qualify.
Scholarships are always a great thing to consider, bearing in mind that the new rule exists. If you pull in scholarships close to or over your Cost of Attendance, it has the potential to reduce your Pell grant amount. However, if you’re pulling in that much money, that will always be a good thing.
Typically, when we talk about scholarships, we’re trying to look first at a hyperlocal level, because the competition is usually lower. Then you can start looking at the county level, the state level, and then look at those national competitions.
The national websites that list a ton of different scholarships can be helpful, but because everybody turns to them as a resource, the competition is typically very high. So the more hyperlocal or hyper-specific to your individual situation or skills you can get, the lower your competition is, the better chance you have.
