What’s Changing and Why It Matters: Financial Aid & How Students Will Fund College—Part 1

If you are a family trying to navigate the rising cost of college, upcoming federal changes to financial aid and student loans could have a big impact on your bottom line. These new policies reshape how students can fund their education, how financial aid is calculated, and how families are assessed. But the official language is long—and let’s be honest—a bit overwhelming to sort through.

That is where we come in.

Welcome to our blog series unpacking these new federal financial aid and loan changes. We are breaking down the update, so you can understand what it really means for you, your family, and your college planning decisions.

Part 1—A Game-Changer for Family-Owned Businesses, Farms, and Fisheries

If you are planning for college costs, understanding how your family’s assets are treated in financial aid calculations is more important than ever. Recent changes to federal law will significantly impact how eligibility is determined—especially for families who own farms, small businesses, or commercial fishing operations.

This blog kicks off a series that breaks down these changes, section by section, to help you make informed college planning decisions.

What’s Changing?

When students apply for federal financial aid through the Free Application for Federal Student Aid (FAFSA), the government looks at their family’s income and assets to determine how much help they should receive. But not all assets are treated equally—and that is where this new rule comes in.

Under the new legislation, certain family-owned assets will no longer count against a student’s financial aid eligibility. That means more students from working-class and rural families could qualify for more aid.

What Assets Are Now Exempt?

Here is what the bill says will not be counted when calculating financial aid:

• The family farm—If the family lives on the farm, its value is excluded.

• A small business—If it has 100 or fewer full-time employees and is owned and controlled by the family, it is exempt.

• A commercial fishing business—Including boats, permits, and related expenses, as long as it is family-owned and operated.

Why This Matters

Before this change, families who owned a small business or farm might have appeared “wealthy” on paper—even if their actual income was modest. That could reduce or eliminate their child’s eligibility for need-based aid like Pell Grants or subsidized loans.

This new exemption:

• Levels the playing field for rural and entrepreneurial families

• Encourages small business ownership without penalizing students

• Helps ensure that financial aid is based on real financial need—not just asset value

Bottom Line

This provision reverses changes made under the FAFSA Simplification Act, which had removed these exemptions for the 2024–2025 award year. Starting July 1, 2026 (for the 2026–2027 academic year), family farms, small businesses, and fishing operations will once again be protected in financial aid calculations.

If your family owns a farm, a small business, or a fishing operation, this part of the legislation could mean more financial aid for your child’s education. It is a targeted reform that recognizes the unique financial realities of working families—and it could open the door to college for students who might otherwise be left behind.

Next Up: Stay tuned for the next post in this series, where we will unpack the new loan limits for graduate students and parents—and what it means for future doctors, lawyers, and MBAs.

Have questions about how these new rules might increase your aid? Let’s talk! Reach out to see how InfoQuest can help you navigate your college financial planning process with clarity and confidence.