2027-28 FAFSA Guide for Connecticut and North Carolina Families

What the FAFSA does

The Free Application for Federal Student Aid is the form for federal grants, work-study and federal student loans. Most states and many colleges also use it for their own aid. It produces your Student Aid Index (SAI), the number schools use to figure need-based aid. The SAI replaced the old Expected Family Contribution (EFC) starting with the 2024-25 FAFSA under the FAFSA Simplification Act.

The student and every required contributor (for example, a dependent student's parents) must give consent for their federal tax information to be transferred from the IRS. Without it, the student's federal aid eligibility can't be calculated.

It uses your 2025 tax return

The 2027-28 FAFSA asks about the 2025 tax year, the "prior-prior" year. Most income comes straight from the IRS once you give consent. That means the 2025 return you filed (or will file) shapes the 2027-28 aid formula. Fixing an error on that return after the fact may mean updating both the return and the FAFSA.

Under the FAFSA Simplification Act, far fewer kinds of untaxed income count. Federal Student Aid lists what remains: deductible payments to SEP, SIMPLE, Keogh and other qualified retirement plans; tax-exempt interest; the untaxed part of IRA distributions and pensions (not rollovers); and the foreign earned income exclusion.

What counts as an asset

The form asks for the net worth of cash, investments and businesses as of the day you file. Use 0 for anything worth less than its debt. Based on the 2027-28 form instructions:

How 529 accounts are counted

• Owned by a parent of a dependent student: reported as a parent asset, including a 529 owned by the student when the student reports parent information. The form says parents shouldn't report education savings accounts for their other children.
• Owned by an independent student: reported as the student's asset.
• Owned by a grandparent or anyone else: the form doesn't ask about it. And since the 2024-25 FAFSA, "cash support" and money paid on the student's behalf are no longer counted as the student's untaxed income, according to the Congressional Research Service and Federal Student Aid. That's the change people call the end of the "grandparent 529 problem."

Some colleges ask for more information on their own aid forms, so check with each school's financial aid office. More on 529s: CHET and 529 plans in CT and NC.

Small-business owners: the business may not count at all

Starting with the 2026-27 FAFSA, Federal Student Aid says the net worth of these is not reported as an asset:

• a family-owned business with 100 or fewer full-time (or full-time equivalent) employees,
• a farm the family lives on, and
• a commercial fishing business owned and controlled by the family.

The 2027-28 form repeats this: "Don't include a family business with 100 or fewer full-time employees." Business income still counts, because it flows through your 2025 tax return (Schedule C, K-1s and so on). Rental property is still an investment asset, including a unit in your home with its own entrance, kitchen and bath rented to someone outside the family.

Connecticut state aid

The CT Office of Higher Education runs the Roberta B. Willis Scholarship:

• Need-Merit: up to $5,250 a year at a four-year program or $4,650 at a two-year program, for Connecticut residents at eligible CT colleges. It requires top 20% class rank or an SAT of 1200+ or ACT of 25+, an application submitted by the high school counselor, and the FAFSA by February 15. Students must have an SAI at or below OHE's cutoff for the year. For FY-26 the cutoff was 10,999. Not yet confirmed the 2027-28 cutoff.
• Need-based awards also use the FAFSA. Check with your college's financial aid office for its deadline.

North Carolina state aid

The Next NC Scholarship combines the federal Pell Grant with state aid. As published by CFNC for current awards:

• For NC residents with household AGI of $80,000 or less and an SAI of 7,500 or less.
• At least $5,000 a year at a UNC System university, or at least $3,000 at an NC community college, from combined federal and state aid.
• No separate application: filing the FAFSA and listing an eligible NC school is enough.
• Priority dates: June 1 for UNC System schools and August 15 for community colleges.

Not yet confirmed The 2027-28 amounts and limits haven't been published yet.

Filing steps

1. Have your 2025 tax return (or the information from it) handy.
2. Go to StudentAid.gov. The FAFSA is free there. Watch out for sites that charge to file it.
3. The student starts the form and invites any required contributors, such as parents.
4. Each contributor gives consent for the IRS data transfer and signs their section.
5. Enter assets as of the day you file, using the rules above.
6. List every college to receive the information. For CT and NC state aid, list an eligible in-state school.
7. Submit before the earliest state or college deadline that applies to you, and review the FAFSA Submission Summary.