States That Require The FAFSA To Graduate: 2026 Update

A growing group of states has turned the FAFSA into a high school graduation requirement. The idea, known as “universal FAFSA,” is simple: every senior either files the federal aid application or formally opts out before getting a diploma.The label hides several variations of the policy. Some states withhold a diploma from a student who does neither, while others only require schools to track who filed.Here’s where every state stands heading into the 2027-28 FAFSA cycle, which states walked their policies back, and what the data says about whether any of it works.

Sen. Jeff Merkley introduced the Homeownership Promise Act (PDF File) on September 23, 2026, a bill that would have the federal government match first-time homebuyers’ down payment savings at a 5-to-1 rate. A saver who puts away the $10,000 maximum would receive up to $50,000 from the Department of Housing and Urban Development (HUD), for a combined $60,000 at closing. Sen. Ron Wyden is the lone cosponsor, according to Merkley’s announcement.The new Homeownership Promise Accounts would function as savings accounts with a large federal grant paid out on purchase day. The concept resembles the match Foyer offers on home down payment savings and the $1,000 federal Saver’s Match coming to retirement accounts in 2027, but at a far larger multiple.The bill defines an “eligible family” as one or two first-time buyers, so a couple buying together would share one account and one $60,000 cap rather than each opening their own (another marriage penalty).

Two former for-profit college students filed a proposed class action against the U.S. Department of Education on September 24, 2026, alleging the agency keeps telling credit bureaus they owe federal student loans it cancelled years ago. The case, Woods v. U.S. Department of Education (No. 1:26-cv-3335), was filed in the U.S. District Court for the District of Columbia by the Project on Predatory Student Lending (PPSL), the legal group behind the Sweet v. Cardona borrower defense settlement. The lawsuit seeks damages under the Fair Credit Reporting Act.At issue are the Department’s group discharges that were announced by the Biden Administration between April 2022 and January 2025, which covered more than 1.5 million borrowers and $23.4 billion in loans tied to schools where the agency found widespread fraud and misconduct.Those schools, including Corinthian Colleges, ITT Tech, the Art Institutes and Ashford University, appear on our for-profit college loan forgiveness list. PPSL estimates, based on public data, that the Department is still reporting $4.6 billion of that cancelled debt as owed, affecting more than 300,000 people. This aligns with a lot of the comments that we saw on our videos reporting on this, where borrowers reported that their loans are still not showing as canceled.

The U.S. Department of Education and the U.S. Department of the Treasury launched the Defaulted Loans Support Center on September 30, 2026, a new section of StudentAid.gov where borrowers with defaulted federal student loans can apply online to rehabilitate or consolidate their loans. According to the joint press release, the portal replaces “outdated websites and burdensome mail and fax-based processes” that have governed default resolution for decades.It is the first major borrower-facing product to come out of the ED-Treasury partnership that moved defaulted loan collections to Treasury earlier this year.The portal lives at studentaid.gov/default-support and uses a borrower’s existing StudentAid.gov login. That alone is a change from the old MyEdDebt.ed.gov system, which required a separate account tied to a Social Security number.This is important give then fact that the Treasury takeover affects 7.8 million defaulted borrowers.

The U.S. Department of Education announced on September 29, 2026 that it was extending the enrollment window for its temporary 1% student loan interest rate reduction by three months. Borrowers who enroll in auto pay by December 31, 2026, or who are already enrolled, keep the reduced rate through June 30, 2028. The original deadline would have closed at the end of September. The 1% discount replaced the old 0.25% auto pay discount on July 1, 2026 for eligible borrowers.The Department says nearly 2 million borrowers have signed up for auto pay since the benefit was announced this summer. Under Secretary of Education Nicholas Kent said in the statement that the discount is already lifting repayment rates across the federal portfolio, which has been struggling as 9.3 million borrowers sit in default.

The U.S. Senate passed the Protect College Sports Act (PDF File) by a 77-22 vote late Monday, after nearly six hours of debate and seven amendments. Drafted by Senators Ted Cruz (R-Texas) and Maria Cantwell (D-Washington), the bill would write the House v. NCAA settlement into federal law, including the revenue-sharing model that turned schools into direct payers of their athletes. This is exactly what we broke down in how NIL athletes actually make money.For families, this is a money story as much as a sports story. Athletes can now get paid directly from schools, collectives, and brands, but each dollar carries self-employment tax, financial aid consequences, and agent commissions. The bill would replace today’s patchwork of state NIL laws with one national rulebook, according to a Senate Commerce Committee fact sheet on the bill.

A coalition of 89 advocacy groups, unions, and nonprofits is asking Congress to convene an emergency hearing on the student loan system, citing servicing errors and confusion that have followed the repayment overhaul that took effect July 1.The letter (PDF File), was led by Protect Borrowers and Young Invincibles and signed by groups including the AFL-CIO, the American Federation of Teachers, the National Education Association, the NAACP, and the UAW.The letter went to the chairs and ranking members of four committees: Senate HELP (Bill Cassidy and Bernie Sanders), Senate Banking (Tim Scott and Elizabeth Warren), House Education and Workforce (Tim Walberg and Bobby Scott), and House Financial Services (French Hill and Maxine Waters).It asks them to “engage in critical oversight and convene an emergency hearing” to hold the Education Department and its federal student loan servicers accountable.

I’m expecting to get my student loans forgiven soon. I’m at about $148,000. I borrowed $65,000 for a social work degree back in 2001 and I’ve paid something every single month since.A coworker mentioned you pay taxes on this and now I don’t know what to think. I make $58,000 a year. I’ve got about $14,000 in a retirement plan, $3,000 in savings, and other debt. I can’t afford to pay more taxes.Does this even apply to me? And is there something I should be doing before the end of the year?

Federal Student Aid posted its quarterly portfolio update on September 22, 2026, and the data through June 30 shows student loan defaults still rising. The number of borrowers with defaulted loans in the federally managed portfolio grew by about 400,000 during the quarter to more than 9.3 million. Those borrowers owe $234 billion, roughly 14% of the $1.64 trillion portfolio the Department of Education manages directly.That total now sits above the 9 million figure cited just last week when senators pressed the Education Department over its $1 billion servicing fund.The six-month trend is ugly. When FSA released its December 2025 numbers in March, 7.7 million borrowers held $180 billion in defaulted federal student loans. Compared with that report, the defaulted portfolio has added roughly 1.6 million borrowers and $54 billion in the first half of 2026.The overall portfolio tracked on the FSA Data Center now covers 42.3 million recipients and more than $1.7 trillion, up nearly 4% in dollars from June 2025, and student loan default accounts for a growing slice of it.

The 2027-28 FAFSA launches for everyone by October 1, 2026, and the beta version is already open. Parents working through the FAFSA step by step are reaching the signature page without ever seeing a question about savings, investments, or 529 plans. That’s on purpose.Nothing is missing and your application is not incomplete. Federal law says the Education Department “shall not use asset information” from families who meet one of three tests. A skipped section is not one of the FAFSA mistakes that cost families aid.