Education Department Updates 2027 Aid Calculations
Published Date: 6/2/2026
Notice
Summary
Starting in the 2027-28 school year, the government is updating the numbers used to figure out how much financial aid students can get for college. These updates adjust for inflation and affect programs like Pell Grants, Work-Study, and student loans. If you’re a student or family applying for aid, expect some changes in how your financial need is calculated, based on new cost-of-living numbers.
Analyzed Economic Effects
7 provisions identified: 1 benefits, 1 costs, 5 mixed.
Applies to 2027-28 Title IV Aid
If you apply for Title IV student aid for award year 2027-28 (Federal Pell Grant, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, William D. Ford Federal Direct Loan, or TEACH Grant), the updated tables in this notice will be used to calculate your Student Aid Index (SAI). These table updates are the official values the Department of Education will use for AY 2027-28.
New Income Protection Allowances (IPA)
The notice sets Income Protection Allowances (IPAs) used in SAI calculations for AY 2027-28. The IPA for dependent students is $12,220; parents of dependent students have IPAs by family size (e.g., family size 2: $30,300; size 4: $46,590; for each additional family member add $7,260). Independent student IPAs are listed (for example, single independent without dependents: $19,000; married independent without dependents: $30,470) and separate tables for independents with dependents show specific values and per-additional-member amounts.
Updated Business/Farm Net-Worth Schedule
The notice provides the Adjusted Net Worth (NW) schedule for businesses or farms used in AY 2027-28 SAI calculations. Examples: NW less than $1 → adjusted NW $0; $1 to $180,000 → $0 + 40% of NW; $180,001 to $540,000 → $72,000 + 50% of NW over $180,000; $540,001 to $905,000 → $252,000 + 60% of NW over $540,000; $905,001 or more → $471,000 + 100% of NW over $905,000.
Asset Protection Allowance: $0 Across Ages
For parents of dependent students and independent students (with or without dependents other than a spouse), the Asset Protection Allowance table for AY 2027-28 shows an allowance of $0 for all listed ages and for both married and single statuses (ages 25 through 65 or older).
Assessment Schedules and Rates for Available Income
The notice specifies the assessment schedule used to convert Available Adjusted Income (AAI) into a contribution for AY 2027-28. Examples: AAI less than -$8,900 → contribution -$1,958; AAI -$8,900 to $22,600 → 22% of AAI; $22,601 to $28,300 → $4,972 + 25% of AAI over $22,600; up to $45,601 or more → $12,336 + 47% of AAI over $45,600. These schedules apply to parents of dependent students and independent students with dependents other than a spouse.
Employment Expense Allowance: $5,200 or 35%
The employment expense allowance for AY 2027-28 is the lesser of $5,200 or 35% of total earned income for parents of dependent students and for independent students with dependents; it is also the same for married independent students without dependents. For independent students without dependents who are not married, the allowance is zero.
Annual CPI-Based Update Method
The Secretary updated the Need Analysis tables for AY 2027-28 based on inflation: the increases in the tables are based on the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for April of the applicable year compared to April 2020. The updates account for inflation that took place between April 2020 and April in the year prior to the beginning of the award year.
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Key Dates
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