The U.S. Department of Education officially released the 2025–26 Free Application for Federal Student Aid (FAFSA) on November 21, 2024, ten days ahead of its anticipated December 1 launch date. FAFSA is a critical resource that provides students access to federal grants, loans, and work-study opportunities, helping millions overcome financial barriers to higher education.Completing the FAFSA is not just a formality—it’s a strategic step toward securing financial aid that makes college more affordable.
In addition to federal aid, FAFSA data is used by many states, colleges, and universities to allocate scholarships, grants, and institutional aid, further highlighting its importance for students seeking comprehensive funding options to reduce financial strain on themselves and their families.
To assist students, Federal Student Aid has released a set of Frequently Asked Questions (FAQs). One question addresses how students should report college grants, scholarships, or AmeriCorps benefits as income to the IRS on their FAFSA form.
Details regarding college grants, scholarships, or AmeriCorps benefits as income to the IRS on their FAFSA form
According to the Federal Student Aid website, students must report any college grant and scholarship aid that was included as income in their IRS filing for 2023. However, most students leave this question blank because grants or scholarships are generally non-taxable unless the amounts exceed the total expenses for tuition, fees, books, supplies, and required equipment.
For taxable portions of scholarships or grants, students must include them under the “Wages, salaries, tips” section on their tax return. The following items may need to be reported to the IRS if used for non-qualified expenses:
- Grants
- Scholarships
- Waivers/remissions
- Fellowships/assistantships (grant or scholarship portions)
- AmeriCorps education awards and living allowances
- AmeriCorps interest accrual payments (for student loan interest during the AmeriCorps service term)
Steps to fill FAFSA application
Filling out the FAFSA can seem overwhelming, but breaking it into clear, manageable steps simplifies the process. Below is a comprehensive guide to help you navigate the application from start to finish:
- Create an FSA ID: To begin, both the student and, if applicable, a parent need to create separate Federal Student Aid (FSA) IDs on the Federal Student Aid website. This ID serves as your unique login credential and enables you to sign the FAFSA form electronically. It is essential to keep your FSA ID secure, as you’ll need it for future applications or to make updates to your FAFSA.
- Gather Required Documents: Before starting your FAFSA, ensure you have all the necessary documents on hand. This includes your Social Security Number (SSN) or Alien Registration Number, federal tax returns, W-2 forms, and records of income. Additionally, have bank statements, investment details, and any untaxed income documentation ready. These documents are crucial for accurately completing the financial sections of the form.
- Access the FAFSA Website: Once your documents are ready, visit the official FAFSA website and click on “Start Here.” Use your FSA ID to log in and access the form. The FAFSA portal guides you through the application process step by step, ensuring you complete all required sections accurately.
- Complete the FAFSA Form: The FAFSA form collects a variety of information, including personal, financial, and school-related details. Start by entering your personal information, such as your name, date of birth, and Social Security Number. Next, list the colleges or universities you are considering—up to 10 institutions can receive your FAFSA data. Answer questions to determine your dependency status and provide parental information if required. Use the IRS Data Retrieval Tool to import your tax details or manually input financial data to complete the form.
- Sign and Submit the FAFSA: Before submitting your FAFSA, carefully review all the information you’ve entered for accuracy. Both the student and parent (if applicable) must sign the form electronically using their FSA IDs. Once submitted, you’ll receive a confirmation page indicating that your application was successfully processed. Keep this confirmation for your records.
- Follow Up on Your FAFSA: After submission, you will receive a Student Aid Report (SAR) summarizing your application. Review the SAR for any errors and make corrections if necessary. This step is vital to ensure that your FAFSA accurately reflects your financial situation and eligibility for aid.
- Understand Your Expected Family Contribution (EFC): The FAFSA calculates your Expected Family Contribution (EFC), a number used by schools to determine your eligibility for financial aid. Your EFC plays a key role in shaping your financial aid package, which may include grants, loans, and work-study opportunities.
Students are encouraged to consult the official Federal Student Aid website for detailed guidance and information.
