ED Details 2026-27 FAFSA and Pell Grant Eligibility Changes Due to ‘One Big Beautiful Bill Act’
By Hugh T. Ferguson, NASFAA Managing Editor
The Department of Education (ED) published an electronic announcement on Monday explaining how the “One Big Beautiful Bill Act” (OBBBA) will impact Pell Grant eligibility and updates to the Student Aid Index (SAI) calculation beginning with the 2026-27 FAFSA cycle.
SAI asset calculation will now exclude the net worth of: family-owned business with 100 or fewer full-time (or full-time equivalent) employees; farms on which the family resides; and commercial fishing business and related expenses, owned and controlled by a family.
Per the department’s guidance, these changes are currently reflected in the ongoing 2026-27 FAFSA beta testing period.
In terms of Pell Grant eligibility, any foreign earned income exclusion amount reported on the FAFSA will be added to the adjusted gross income (AGI) when determining Pell Grant eligibility.
Additionally, applicants with an SAI equal to or greater than two times the maximum Pell Grant amount for the award year will be ineligible for a Pell Grant. Based on the maximum Pell Grant amount, the SAI threshold for 2026-27 is $14,790; however, the SAI limit does not apply to dependents of certain deceased servicemembers and Public Safety Officers, under the Special Rule for Pell Grants.
According to ED, these Pell Grant eligibility updates will be made with the official launch of the 2026-27 FAFSA by October 1, 2025. During the beta testing period, “some” applications may be impacted by Pell Grant eligibility changes, which ED said it will identify and reprocess.
In terms of the beta testing period, ED also reminded the community that FAFSAs submitted during the beta testing period do not need to be resubmitted after the form’s official launch.
Publication Date: 8/19/2025
Norma Constanza R | 12/12/2025 11:58:01 AM
How much is
Pell for 2026- 2027
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