The Video: The 2027-28 FAFSA

How financial aid really works, what the FAFSA does in that system, and how to answer honestly in ways that protect your aid.

My colleagues Jen Turfler and Claire Schadler and I hosted a webinar on financial aid and the 2027-28 FAFSA. The following transcript has been lightly edited for clarity and length. The slides, including an appendix with the details you’ll need to fill out the form, are available as a PDF at the end of this post.

Speakers: Venkates “Swami” Swaminathan, Founder and CEO of LifeLaunchr; Claire Schadler, College Admissions Coach at LifeLaunchr; and Jen Turfler, College Admissions Coach at LifeLaunchr. Audience questions were submitted in the chat and read aloud during the session.

Welcome and Introductions

Swami: Welcome, everyone, to our webinar on financial aid and the 2027-28 FAFSA, the Free Application for Federal Student Aid. It’s that time of year when the FAFSA goes live, and a big part of why Claire, Jen, and I do this is to answer your questions. We have a lot of material, so we’ll move relatively quickly. If you have questions, please put them in the chat or the Q&A box, and we’ll answer them as we go.

Swami: I’m Venkates Swaminathan, Swami. I founded LifeLaunchr in 2014. I’m a member of NACAC and HECA, where I chair the AI committee, co-lead the AI Learning Lab, and serve on the College Knowledge Committee. My bachelor’s degree in engineering is from IIT Delhi, and my master’s is from the University of Illinois. Claire?

Claire: Hi, everyone. I’m Claire Schadler. My background is in teaching English as a second language, and I’ve been in college admissions for about the last ten years. A lot of people have questions about the FAFSA, so I’m excited to get into this.

Jen: Hi, I’m Jen. I was an English teacher for years, and then an undergraduate counselor at UC San Diego. For the last several years I’ve been doing college admissions work, which has been really exciting and very fulfilling.

What This Presentation Is, and What It Isn’t

Swami: For most people, the biggest question about the FAFSA isn’t filling out the form. The form itself is quite easy. The question is how the whole system works. What role does the FAFSA play in the financial aid ecosystem? What other forms do people fill out? How does college financing really work? What does a financial aid award letter look like?

Swami: There are a lot of details, so we’ll go quickly. The presentation has an appendix we won’t cover live, with everything you’ll need when you actually fill out the FAFSA. We’ll include it in the PDF with the recording, so you can read it when you’re filling out the form. There’s no point in us reading lists out on the air.

Swami: We also want to talk about things you can say honestly on the FAFSA that protect your aid. Not fraudulent things, but legal and legitimate decisions that help you get the aid you’re eligible for.

Swami: If you want a screen-by-screen walkthrough of the FAFSA, the Department of Education puts out an excellent one. Claire, can you share that link in the chat?

Audience question: Is this only for seniors this year, or can juniors fill this out as well?

Swami: Only seniors and college students fill out the FAFSA. You fill it out every year you’re in college. Juniors don’t. But if you’re a junior or the parent of a junior, sophomore, or freshman, this presentation is still very helpful. Many of the things that affect the FAFSA come from decisions made much earlier: how you allocate your financial resources, where your money is. Those are legitimate decisions you make early, and they affect how you fill out the FAFSA at the end.

What You Pay Depends on the College and Your Finances

Swami: Some people pay nothing for college. Some pay $90,000 a year. Some colleges have now crossed the six-figure mark. The same student can face very different prices at different colleges.

Swami: The sticker price, the list price on the college’s website, is often just the starting point. At many private colleges, but not all, most students get a discount. At the most selective colleges, like Yale or Harvard, about half the students pay full price. And at public universities, the University of California, Michigan, Texas, Kansas, the published in-state price is what many in-state families pay. Public universities discount less, partly because they have to be very precise about their criteria.

The Core Equation

Swami: There’s a term used all over the financial aid world: demonstrated need. When people ask, “How much need does a family have?” that’s a technical term. It doesn’t actually represent how much money the family needs. It’s the cost of attendance, meaning tuition, fees, housing, food, books, and travel, as each college estimates it, minus a number the FAFSA calculates called the Student Aid Index. The difference is your demonstrated financial need.

Claire: Can you say again what the Student Aid Index is, and why people need to be aware of it?

Swami: It used to be called the Expected Family Contribution. The entire financial aid system in the United States is based on the premise that until you’re 24 years old, with some exceptions, your parents are responsible for the cost of your college education. “Expected Family Contribution” was easier to understand. It was what the government believes your family can afford for your college education each year, based on your income and assets. Whether your family can actually afford that is a different question. They changed the name to Student Aid Index for many reasons. It’s a little more cryptic, but it still means roughly the same thing.

The Formula, Not Your Budget, Sets Your Price

Claire: A lot of the families we work with live in California. Does this formula account for differences in cost of living?

Swami: No, it really doesn’t. This is editorializing a bit, but it’s important. Our financial aid system works really well for families with really low incomes. Between government grants and college grants, they should be able to go to college for very little, sometimes nothing. And it works fine for people with a huge amount of money. Elon Musk isn’t worried about what college costs. But for a great many families in the middle, including many we work with, the system doesn’t work that well. One reason is that it doesn’t account for where you live. An income of $200,000 a year is a lot of money in some parts of the country and not that much in others. The government’s formulas don’t account for that.

Jen: What about international students? Are they stuck paying full price?

Swami: International students have a different set of dilemmas. In most cases, they’re not eligible to file the FAFSA. Some colleges offer merit-based aid to international students, meaning aid based on the student’s accomplishments, and a smaller list offer need-based aid. But most undergraduates coming from other countries to most American universities have to be able to pay the price.

Swami: So for everyone in the middle, which is the vast majority of families, what the formula says you can pay is often very different from what you believe you can pay. I realize that’s difficult, but it just is. If budget matters, choose colleges you can afford before you apply. Do your homework first. Don’t apply and expect some miraculous source of aid to appear at the end.

Swami: If you had a ton of money to give away for people to go to college, you’d give it to people for whom it would be the difference between going and not going. There are very few scholarships for people who could afford college but want help anyway, with the exception of colleges themselves, which often offer aid to incentivize students to attend. We’ll do a separate webinar on merit-based aid. Today is really about need-based assistance.

Four Sources of Aid

Swami: There are roughly four sources of aid. First, federal aid: the Pell Grant for low-income students, work-study, and federal student loans. Your eligibility for those comes directly from the FAFSA.

Swami: Second, state grants. California has the Cal Grant, Florida has Bright Futures. Most state programs use the FAFSA to determine eligibility, and they may add criteria like GPA or the classes you’ve taken.

Swami: Third, and this is the largest source, the colleges themselves: need-based aid, merit-based aid, or both. Need-based means it’s based on the family’s financial circumstances. Merit-based means it’s based on what the student has accomplished.

Swami: Fourth, private sources: employers, foundations, community groups. We won’t talk about those much today.

Swami: One source that isn’t on the slide is aid for veterans, military families, and children of disabled veterans. There are programs through the Veterans Administration and state grants specifically for those families.

Three Pricing Models

Swami: This is one of the things people really struggle to understand. You can divide colleges roughly into three buckets.

Swami: The very highly selective colleges, think Harvard, MIT, Stanford, have very generous need-based aid policies, but they don’t offer merit-based aid at all, as a matter of policy. They run a formula and decide how much they think your family can afford. You pay that, they pay the rest. That’s 100% of their system. It has nothing to do with what the student has accomplished. You won’t get merit aid to go to MIT, Stanford, or Harvard. But if you get in, you pay what their formula says you can afford, and they make up the difference.

Swami: The vast majority of private colleges offer merit aid, and they’ll discount heavily to attract students they want.

Swami: And then public universities. For families with very low incomes here in California, for example, if you’re a really strong student, it can be better to apply to private universities that meet 100% of need. I had a student go to Grinnell College in Iowa some years ago on a full ride. Grinnell paid for everything, including travel. The UCs and Cal States can’t offer that kind of assistance. They might leave a gap of $5,000 a year. Many people would think $5,000 isn’t that much. For that student, it might as well have been $50,000. She could not have paid it.

Swami: For many families, the in-state price at a public university is the real price. And most public universities, with some exceptions, won’t heavily incentivize out-of-state students. The exceptions tend to be public universities working hard to attract students from other states. The University of Utah, for example, has historically been quite generous.

Audience question: I’ve heard a few colleges use the FAFSA to help determine merit aid. Is that true? Is there a list of these schools?

Swami: Great question. This comes around every year in the college admissions community. I don’t know of colleges that require the FAFSA to consider you for merit aid. That doesn’t mean there aren’t any, but it’s quite rare, and I haven’t found a list. What is true is that at some universities, like the University of California, the amount of a merit scholarship like the Regents Scholarship depends on the family’s financial circumstances. So check each college’s policy.

Merit Aid Is About How Much a College Wants You

Swami: Imagine a college’s average GPA and test scores are here, and yours are slightly above. They’ll offer you a significant scholarship to get you to show up. If yours are far above their average, they’ll usually figure you’re unlikely to enroll, so they won’t spend merit aid on you. If yours are below their average, they’re unlikely to incentivize you heavily, because admitting you lowers their averages.

Swami: So if cost is a factor, find colleges where your averages are slightly better than theirs. Unless, of course, it’s a college like Harvard or Yale that doesn’t offer merit aid at all.

Swami: The hard thing to explain is that this isn’t about you. It’s not a judgment about how good a student or person you are. It’s a business decision. Colleges are businesses, and they’re trying to make sure every seat is filled when classes start. Once you understand that, you understand they’re deciding who is likely to enroll and who needs an incentive.

Two Formulas

Swami: There are two methodologies. The one we’re covering today is the federal methodology, which the FAFSA uses. It takes your income and asset numbers and produces your Student Aid Index, which controls federal aid, state aid, and most aid at public universities. Public universities almost all use the FAFSA as their main tool. They can only use other forms for aid that comes from their own money, like their endowment.

Swami: The other is the College Board’s CSS Profile, used mostly by highly selective private colleges. We’ll do a separate presentation on the CSS Profile, so please look out for that. It asks for different information. Home equity, businesses, and retirement accounts aren’t reported on the FAFSA, but they are reported on the CSS Profile.

Audience question: Do you need to fill out both the FAFSA and the CSS Profile?

Swami: If you’re applying to a college that requires the CSS Profile, yes. If you’re only applying to colleges that use the FAFSA, no.

Can Applying for Aid Affect Admission?

Swami: Some colleges are need-blind. That means that in deciding whether to admit you, they don’t consider whether you need aid. Some of the most selective colleges are need-blind, and so are many state universities for in-state students. If you’re a California resident applying to the UC system, it doesn’t matter whether you need aid. MIT and Stanford won’t look at it either.

Swami: But most colleges are need-aware. Setting aside how much aid they offer, they consider your need for assistance as part of the admissions decision.

Swami: Here’s what people don’t understand. If you can afford to pay full price and you’re applying to a need-aware college, which is most private universities and many public universities for out-of-state students, telling them at the outset that you won’t be applying for aid will improve your chances of admission. Obviously that lever isn’t available to many families. But if it’s available to you, you can say it honestly: “We can pay full price.”

Jen: So that will increase their chances of admission?

Swami: At many colleges, yes. At all colleges that are need-aware. It’s a business decision too. Colleges sort applications into yeses, noes, and maybes. At the end of the day, the class they admit has to generate a certain amount of revenue. Students who can pay full price help them meet their financial goals. Once you accept that it’s a business, the whole process is easier to understand.

Should You Apply for Aid?

Swami: Most people should fill out the FAFSA. There are very few families I’d tell not to fill it out at all. Federal Direct and Parent PLUS loans require it. Some state programs tie merit aid amounts to financial circumstances. And circumstances change. If you don’t apply as a freshman, and then sophomore or junior year a parent loses a job and you need assistance, the college might not be as willing to help.

Swami: So if you clearly won’t qualify for need-based aid, your colleges are need-aware, none of them require it for merit, and you don’t need federal loans, you don’t need to fill out the FAFSA.

What the FAFSA Does

Swami: The FAFSA’s first job is to calculate your Student Aid Index. That determines eligibility for things like Pell Grants, which are government grants to low-income students, and work-study. Claire, we were talking about work-study earlier.

Claire: Families see work-study on their award letter, and students sometimes think, “Great, I got this money.” But it just means you’re eligible to work an on-campus job and be paid up to that amount at whatever the job’s hourly rate is. You have to apply for the job, get it, and work it. It can look a little deceiving on an award letter.

Swami: Right. It’s a ceiling on how much you can earn from that employment without it affecting future financial aid applications. You can earn more, but then it will affect your future aid.

Swami: Then there are federal loans: Direct Subsidized and Direct Unsubsidized. They’re “direct” because the government lends students the money directly. That matters, because basically no private institution will lend a 17-year-old with no credit history money. And because it’s the government, the interest rates are generally lower than any commercial loan you can get. On a subsidized loan, interest doesn’t accrue until you finish your education. On an unsubsidized loan, interest accrues, but you don’t have to make payments while you’re a student. Both are decent choices. Some families use them even when they can afford college, because they want their kids to have a stake in their own education.

Swami: The FAFSA also feeds state aid programs, and it informs colleges. This is the part people have a hard time with. You send your FAFSA to a college, and each college does something different with it and produces a different aid offer. It’s not that the FAFSA shows your Student Aid Index and that tells you how much money you’ll get.

Swami: And one unknown factor: whether a college uses the FAFSA behind the scenes in deciding aid. If you didn’t fill it out, a college might decide you’re not seeking aid and can afford the full price, so why give you merit aid? That part isn’t published anywhere.

What’s New This Year

Swami: This year’s FAFSA is pretty simple compared to last year’s. As a student, you go to studentaid.gov, create an account, verify who you are, and get a login. You invite your contributors, parents, stepparents, whoever that is, and each of them provides their financial information. Income information comes directly from the IRS. You authorize the FAFSA to pull your tax return. That feels a little scary to people, but I really recommend everyone do it if they can. If you enter it yourself, they’ll ask you to verify it against your tax return anyway. Then you enter your assets, answer a few more questions, and submit.

Audience question: For students starting in 2028, the 2026 tax return will be used. What about assets? Are those as of December 31, 2026? And do they ask about income and assets every year?

Swami: Yes, a student starting college in fall 2028 will use the 2026 tax return. Assets are measured as of the day you submit the FAFSA. If you submit on October 15, 2027, your assets as of that date are what matter. And yes, they ask every year. You provide the same information each year you file.

Swami: Some new rules are really important. The biggest: if you have a family-owned business with 100 or fewer employees, you don’t have to report the value of that business as an asset. The same goes for a family farm or a family fishing business.

Swami: There are also some limits. If your Student Aid Index is at least twice the maximum Pell Grant, you can’t get a Pell Grant. The maximum Pell Grant is around $7,400, so if the government thinks you can afford about $15,000 a year, no Pell Grant. You also can’t get a Pell Grant if outside scholarships cover the full cost. Income earned outside the United States now counts for Pell. And Parent PLUS loans are now limited to $20,000 a year and $65,000 total per student.

Should Parents Borrow?

Claire: Can you say a little more about Parent PLUS loans? Is that something all parents should do?

Swami: This comes up every year. We’re not financial advisors or lawyers, so get your own financial and legal advice. A Parent PLUS loan is a loan from the government for your child’s education. Because it’s from the government, the terms are better than an unsecured private loan from your bank. But for most people who own a home, the least expensive loan is a home equity loan. So in many cases, it turns out to be financially better to pay down your mortgage and then borrow against your home, or just pay cash.

Audience question: How does the FAFSA learn about outside scholarships, if a full scholarship makes you ineligible for Pell?

Swami: Before they give you the Pell Grant, they’ll ask. It’s as simple as that. And it’s a crime to lie to the government, so please don’t.

Who Can File the FAFSA?

Swami: Only certain categories of people can file the FAFSA: U.S. citizens and nationals, green card holders, refugees and asylees, and certain other eligible noncitizens. That’s it. If you’re in the U.S. on an H-4, F-1, or L-2 visa, even if you have a Social Security number, you’re not eligible. A student who is undocumented, or who is a DACA recipient, can’t file the FAFSA either.

Swami: If you’re not eligible, some colleges offer aid through the CSS Profile or an international aid form. Some states have programs for DACA recipients, so check those. And some private scholarships are specifically for students who aren’t citizens, or are open to everyone.

Mixed-Status Families

Swami: This year I want to say something we haven’t had to say before. If the student is a U.S. citizen, they can file the FAFSA even if their parents are undocumented. The Privacy Act and FERPA protect that data, and the government isn’t supposed to share it with immigration enforcement. There’s no agreement that we know of that allows that sharing. That said, given everything that’s happened, I have no way to be certain the data won’t get shared. If you’re in that situation, please get legal advice and follow your attorney’s advice.

Rule #1: Every Answer Must Be True

Swami: The principle is: do your legal planning, but don’t misreport information. Misreporting is fraud against the United States government. When you sign the FAFSA, you sign under penalty of perjury. You can go to jail for lying on it. And colleges can ask you to prove anything you report.

Swami: So what I’m about to say isn’t that you should lie or do fraudulent things. It’s that you can make legitimate, legal choices to manage your money better.

Legal Strategy Is Not Fraud

Swami: Legitimate choices include making real financial decisions before you file and deciding when you file. What you report about your assets has to be true on the day you report it. It doesn’t have to have been true the day before or the day after. Choosing whose name an account is in is also fine, if you do it for genuine reasons.

Swami: What’s fraudulent is leaving out assets the form asks about. If the FAFSA asks about your brokerage accounts and you just don’t feel like reporting one, that’s fraud. Understating your income, hiding money in other people’s names, claiming a status or family size that isn’t true: all fraud. So is setting up an account or business whose only purpose is hiding assets. You don’t have to report the value of a family business, but if the business exists only so you can put money into it, that won’t work well.

Swami: Claire, Jen, and I aren’t lawyers or accountants. We can’t give you legal or financial advice. Please talk to your own lawyer or accountant and follow their advice.

Audience question: What if you don’t know about scholarships when you fill out the FAFSA, and then you get a full scholarship from an outside source afterward?

Swami: The college will have rules about what you have to tell them when you accept your financial aid, and you have to follow those rules. You sign documents saying you’ll tell them if your circumstances change. If you don’t, that’s a problem too. There are always complicated corner cases, and we can’t give you legal advice on them.

Audience question: Our net worth exceeds $2 million, but most of it is tied up in illiquid assets like stocks and home equity, which carry withdrawal penalties. Do we still qualify to apply?

Swami: On the FAFSA, the equity in your primary residence doesn’t have to be reported. On the CSS Profile, it does. For brokerage accounts, it depends on whether they’re retirement accounts. The FAFSA doesn’t require you to report your 401(k), IRA, or other retirement accounts. The CSS Profile does. So it depends on which colleges you’re applying to. Neither form cares how liquid your assets are. If you say it’s hard to sell, the government will say that’s not their problem.

Swami: Honestly, then you have to decide as a family whether it’s worth filling out the form if you’re unlikely to get aid, or whether you should pay full price and tell colleges that, which can help your chances at need-aware colleges. There’s no one-size-fits-all answer, so talk to your financial advisor or lawyer.

You Don’t Have to Volunteer Information

Swami: Answer every question honestly and follow the instructions precisely. But don’t volunteer information, and don’t provide information nobody asked for.

Which Parent Reports?

Swami: If the parents are married, both parents’ information is included, whether they file taxes jointly or separately. If the parents are divorced or separated, and this applies to the FAFSA, since the CSS Profile has different rules, the parent who provided more financial support in the last 12 months reports their information, and the other parent doesn’t report at all. If that parent has remarried, the stepparent’s information is included too.

Which Income Counts?

Swami: The 2027-28 FAFSA uses your 2025 tax return. If your circumstances have changed since then, a job loss, a pay cut, significant medical bills, file the FAFSA and then contact each college’s financial aid office individually and ask for what’s called, as a term of art, “professional judgment.” You’re asking them to reassess your Student Aid Index or your award.

Swami: When you do, provide facts. If you’re facing big medical bills, don’t tell them how hard it’s been because your grandmother had surgery. They don’t care. Make a spreadsheet showing how much you’re spending. Be precise and specific. Colleges have to follow very specific rules when they adjust need-based aid, for good reasons. Otherwise they’d be accused of favoritism.

Swami: Income the student earns also counts, and it counts more heavily than the parents’ income. If a parent earns an extra dollar, it reduces aid by a certain amount. If the student earns an extra dollar, it reduces aid by much more.

Whose Name Is on the Account Matters

Jen: What about a grandparent’s 529 plan? Does that hurt financial aid?

Swami: If a parent owns a 529 plan, you have to report it. If the student owns it, you have to report it too, and it has a bigger impact, because student assets count for more. As a general principle, a 529 should be in a parent’s name with the student as beneficiary, not the other way around. A grandparent’s 529 isn’t reportable on the FAFSA. I believe it is reportable on the CSS Profile. Different rules, different forms.

Swami: Student assets are assessed at 20%. If the student has $10,000 in savings, that raises the Student Aid Index by about $2,000. The same $10,000 in a parent’s name is assessed at about 5.6%, so around $560.

Assets Are Measured the Day You File

Swami: Assets are measured on the day you file. If you want to make a car payment today so your assets are slightly lower tomorrow, or pay down your mortgage or credit cards, those are all valid choices.

Claire: Is there a risk in paying down too much before filing?

Swami: Absolutely. You might say, “I’m going to pay $100,000 down on my mortgage,” and then you need the money the next day to pay tuition. Now it’s locked up in your house. Don’t let the cost of college push you into otherwise financially unwise choices. Talk to a financial advisor.

Audience question: Other than a lawyer or financial advisor, who can help review this so we don’t make a mistake, either over-reporting or under-reporting?

Swami: Those are usually the best people. There aren’t correct decisions here, there are different decisions. Every decision has a cost and a benefit, and those accrue to the family, not to us. So there’s no way for us to say what the right choice is for every family. For most people, it’s pretty straightforward. But making choices just to reduce your aid verges on fraud. If you set up an LLC that doesn’t actually do anything and put all your money in its name, that’s a problem. If it feels sketchy, it probably is.

Swami: To recap what the FAFSA doesn’t count: equity in your home, retirement accounts, and family-owned businesses. And cash under $1,000. If you have more than $1,000 in cash, you have to report it. You can make choices like making retirement contributions early or paying down your mortgage, but make good choices that work for your family’s finances.

Where These Moves Stop Working

Swami: A lot of these moves don’t work if you’re applying to colleges that require the CSS Profile, because it asks a much broader set of questions about all of these things. We’ll do a webinar on the CSS Profile, so please look out for that.

Filling Out the FAFSA Is Simple

Swami: Filling out the FAFSA itself is really simple, and the appendix has a list of everything you need. The student creates a studentaid.gov account and invites their contributors. The student needs a Social Security number. Other contributors don’t have to have one. If you’re a U.S. citizen student with undocumented parents, or parents here on a visa, they won’t have Social Security numbers, and they aren’t required to.

Swami: You’ll need your federal tax returns and W-2s, and records of untaxed income. That comes up a lot. They’re not asking whether you owe taxes. They’re asking whether you had income you didn’t pay taxes on. Even if you owe taxes and didn’t pay them, you have to report it. You’ll also need child support received, your bank, brokerage, and investment balances, and the value of real estate other than your home, like a second home or rental property.

Deadlines

Swami: Jen, we talked about deadlines. The federal deadline is June 30, but many colleges have earlier priority deadlines. Please check the date for each college. Government grants like the Pell Grant don’t run out. If you’re eligible, you’ll get it. But college awards often come from a fixed pool of money, and they start awarding it after the priority deadline. If you come late, they may be out of money.

Swami: File early, but get it right the first time. Don’t rush and turn in an incorrect form. It’s quite difficult to correct a FAFSA that’s not right.

Jen: I’ve added a link from studentaid.gov with state and college deadlines.

Swami: I’d really urge you to check each state and college yourself, because sometimes those pages have incorrect information, and we don’t want you to make a mistake.

If You’re Selected for Verification

Swami: Sometimes you’ll file the FAFSA, send it to a college, and be selected for verification. That’s one reason filing sooner helps. They’ll tell you everything they need. Provide every document, fill out their worksheets completely, and meet their deadline. Be complete about what they ask, and don’t volunteer information. Do it quickly, because aid won’t be paid until verification is done. Some colleges will also ask you to verify your identity by uploading a driver’s license, passport, or other documents.

Audience question: Do you fill out the FAFSA through a direct link, or through the Common App?

Swami: You go to the Department of Education’s website, studentaid.gov, and fill it out there. If you just Google “FAFSA,” you’ll see many links that claim to help you fill it out and then charge you money. The only correct link is the government’s, and it costs nothing. It’s the Free Application for Federal Student Aid. Please don’t pay to fill it out.

Audience comment: Scam websites sometimes swap the letters, like “FASFA” instead of “FAFSA,” so it’s important to check.

Swami: Exactly. Type studentaid.gov into your browser yourself, make sure it’s the correct government site, and don’t pay. The CSS Profile is a College Board form, which is different, but the FAFSA is entirely free.

Read Your Award Letter Carefully

Swami: At the end of the process, each college will send you a letter that might look like this. I want to show it because these letters are often really misleading. NASFAA, the National Association of Student Financial Aid Administrators, has a great model award letter, and we’ll put the link in the chat. But many colleges still send letters that make it look as if loans and work-study reduce the cost of college. They clearly don’t. A loan has to be paid back. Work-study means you get a job and do the work. Neither changes the cost of college, only who pays for it or who works for it. Grants and scholarships are the only part you don’t have to pay back.

Swami: We’ll do a webinar on award letters in the spring. But remember that many are written very misleadingly. It’s especially hard for families who don’t have people like us to advise them, or the social or financial resources to make sense of it. That Perkins loan on the letter looks like $2,500 toward college. It’s not. They’re lending you $2,500, and you still have to pay it back.

Audience comment: You can also choose to accept only a portion of the loans. You don’t have to take the full offer.

Swami: Absolutely correct. Once you get the award letter, you can accept or decline parts of it. I brought it up because for many families these letters are so confusing. A loan doesn’t reduce the cost of college. It just changes when you pay. If I borrow money to buy a car, it doesn’t change the price of the car.

Swami: On Parent PLUS loans versus home equity loans, that’s entirely a financing decision. It’s not about the cost of college, it’s about how you’ll pay it. It’s like asking whether to borrow from your credit union or the auto dealership to buy a car. Do your homework and talk to your financial advisor.

Award Letters and Appeals

Swami: Compare offers carefully. In the spring webinar, we’ll share a spreadsheet you can use to compare offers. If your circumstances change, ask for professional judgment. Give facts and documents, not a hardship story. How hard things have been for your family matters, and I’m not downplaying that, but the financial aid office doesn’t consider it.

Swami: Some colleges will review a competing offer, but there’s a good way and a bad way to ask. The good way is to tell a college, “Honestly, you’re our top choice. College Y, our second choice, offered us a slightly better package. Can you match it? It would make this an easy decision for us.” Or lay out the facts of your circumstances and ask them to exercise professional judgment. But don’t negotiate unless you’re prepared to say yes if they give you what you want.

File a New FAFSA Every Year

Swami: You have to file the FAFSA every year you’re in college. If you’re working with students in college now, remind them.

Questions

Jen: Where do scholarships actually come from, and do students need to apply to them separately?

Swami: Today’s presentation covered need-based assistance, based on your family’s finances. Scholarships are generally merit-based, based on the student’s accomplishments: GPA, test scores, athletics, extracurriculars.

Swami: The first thing to understand is that the vast majority of scholarships come directly from colleges. If scholarships matter to you, pick colleges that award scholarships to students like you. On our platform, Soar, you can ask how much merit aid a college offers. Some of my colleagues also put together an excellent tool every year that shows how much merit aid each college offers. Claire, can you share that link?

Swami: Beyond that, there are local organizations in your community, often through your school, like a law firm or an auto dealership offering $2,000 or $2,500. Those are all worth applying for. Many scholarships are only available once you’re in college, because a donor’s big risk is that someone wins and never actually goes. So keep applying once you get to college. Make it a habit.

Swami: And most legitimate scholarships are either specific to certain communities or affiliations, like families of union members, the military, corporate or Rotary Club scholarships, or they consider need. That makes sense. If you had money to give away for college, you’d give it to someone who needed it, not someone who just wanted it. We’ll do a separate webinar on scholarships and merit aid.

Audience question: For a junior, if we file this year and again next year, will colleges see both years?

Swami: If your child is a junior, don’t file the FAFSA this year. There’s nothing to be gained. You only file for years your child will be in college. The point of today for parents of juniors, sophomores, and freshmen is to plan ahead.

Audience question: If a family skips filing freshman year, can they file later if something changes?

Swami: They can. But the form goes to the college, and the college decides how much aid to give. At that point, the college may say, “We assumed you were paying a certain amount. If your ability to pay changed a lot, we may not be able to accommodate that.” So if you think that might happen, file for freshman year too.

Closing

Swami: Thank you, everyone, for being here, and especially thank you, Claire and Jen. This question comes up a lot from families, so I’m really happy we could share this. We’ll send the recording, the transcript, and the slides with the appendix. If other questions come up, email us at help@lifelaunchr.com.

Resources

• NASFAA model aid offer: what an honest award letter looks like, with grants separated from loans and work-study
• FSA 2027-28 FAFSA Preview Presentation: the Department of Education’s screen-by-screen walkthrough of the form
• Start the FAFSA at studentaid.gov: the only official site, and it’s free
• State and college FAFSA deadlines
• Net price calculator lookup: find each college’s calculator
• VA education benefits: for veterans, military families, and children of disabled veterans
• Merit aid by college: a tool compiled by fellow counselors showing how much merit aid each college offers

The Appendix

https://www.lifelaunchr.com/wp-content/uploads/2026/10/Financial-Aid-and-the-2027-28-FAFSA-Appendix.pdf

The appendix covers the full checklist of what you’ll need to file, this year’s form and rule changes in detail, what counts as an asset, the asset reporting exemption, eligibility for noncitizens, verification step by step, special and unusual circumstances, types of federal aid, and state aid.

This transcript has been edited for length and clarity.

For personalized help with college admissions and financial aid, visit lifelaunchr.com.