Application and Verification Guide | 2026-2027 Federal Student Aid Handbook

Introduction

This guide is intended for college financial aid administrators and counselors who help students with the financial aid process—completing the Free Application for Federal Student Aid (FAFSA^®) form, verifying information, and making corrections and other changes to the information reported on the FAFSA form.

Throughout the Federal Student Aid Handbook, we use “college,” “school,” and “institution” interchangeably unless a more specific use is given. Similarly, “student,” “applicant,” and “aid recipient” are synonyms. “Parents” in this volume refers to the legal parents of dependent students, and “you” refers to the primary audience of the Handbook: financial aid administrators at colleges. “We” indicates the U.S. Department of Education (the Department, ED), and “Title IV aid” refer to the financial aid offered by the Department.

We appreciate any comments that you have on the Application and Verification Guide (AVG), as well as all the volumes of the FSA Handbook. We revise the text based on questions and feedback from the financial aid community, so please reach out to us through the “Contact Customer Support” feature in our Partner Connect Help Center clicking on “FSA Handbook” under the Topic section.

Throughout the AVG, we updated all dates, pertinent tax return and schedule information, along with various resources and references to support the requirements associated with the 2026-27 processing year and the 2024 base tax year. We also updated links and publications associated with FSA’s Partner Connect and Knowledge Center, where appropriate.

We reorganized the subsections in this chapter for better flow. There were no substantive changes to the text in this chapter.

We expanded the “Federal Tax Information” subsection to include the intermediate and derived values that appear on the ISIR to align with updated guidance issued on September 17, 2025, in Electronic Announcement GENERAL-23-34.
We updated the subsection heading titles under the “Contributors” subsections to align with changes to the 2026-27 FAFSA form.
We updated the “Student Assets (22)” subsection to align with changes from the One Big Beautiful Bill Act to the definition of business and farms whose value must be reported as assets on the FAFSA form.

We added subsection “AGI for Pell Grant Eligibility Determinations” to describe the change from the One Big Beautiful Bill Act to the definition of “AGI” used for Pell Grant determination. This section replaces the “The Foreign Earned Income Exclusion, Maximum Pell Grant, and PJ” subsection from Chapter 5. Beginning with the 2026-27 award year, the foreign earned income exclusion reported on the FAFSA form will be added to the AGI when determining a student’s eligibility for a Pell Grant. You will no longer be required to review the inclusion of the foreign earned income exclusion amount as a professional judgment.

We removed the statement of educational purpose from the list of required verification items.
We updated the “Identity” subsection to include the expanded methods for verifying student identity. This aligns with guidance issued on June 6, 2025, in Electronic Announcement APP-25-16.

We removed “The Foreign Earned Income Exclusion, Maximum Pell Grant, and PJ” subsection from this chapter. Treatment of the foreign earned income exclusion is now described in subsection “AGI for Pell Grant Determinations” in Chapter 3.