What Trump changed about FAFSA and college aid
Trump did not simply make FAFSA “pay less.” The bigger effect so far has been to change how federal student aid is calculated and, in some cases, to cut or tighten eligibility, which can lower the amount of need-based aid some students receive. The most direct changes tied to his administration include new FAFSA rules that exclude certain family business and farm assets from the asset calculation, plus broader federal student-loan changes that can reduce borrowing and repayment flexibility.
FAFSA changes that can reduce aid
The Department of Education said the FAFSA updates for the 2026-27 cycle include excluding family-owned businesses with fewer than 100 full-time employees, family farms, and commercial fishing operations from the asset calculation under the Working Families Tax Cuts Act. That can help some applicants look poorer on paper, which may increase aid eligibility, not reduce it.
But other Trump-era changes can do the opposite. New federal rules also add a Pell Grant eligibility restriction: students with a Student Aid Index at twice the maximum Pell Grant or higher become ineligible for Pell funds, and foreign income now counts in the eligibility review. For families near the cutoff, that means less grant money.
Student loans changed too
The larger “college costs” impact comes from federal loan rules, not FAFSA itself. The new law lowers borrowing limits for graduate and professional students, ends Grad PLUS loans for new borrowers, and narrows repayment options for future loans. Those changes do not directly change FAFSA form data, but they can make college more expensive to finance.
For undergraduates, the standard federal borrowing limit did not change in the law described by CNBC, but the aid picture still shifts because grants and repayment options are being tightened in different places. So some students may see less total help even if their FAFSA itself is easier to file.
What’s rumor and what isn’t
There is a lot of confusion online because FAFSA updates, Pell rules, and loan rules are being discussed together. The reliable facts are that some assets were removed from FAFSA calculations, while some eligibility rules and loan limits became stricter. That means Trump’s changes did not universally make college “cost less” or “cost more” for everyone.
The clearest one-line answer is this: Trump’s changes mostly reshaped FAFSA and federal aid rules, and for many students the result is either less grant eligibility, less borrowing room, or both.