Is FAFSA worth filling out for high-income earners?

The FAFSA is worth filing out, even for high-income college students. Firstly, the new Simplified FAFSA is shorter than ever. So long as everything is running smoothly, the form will likely take less than half an hour to complete. Secondly, even if you don't think you'll qualify for federal financial aid, some colleges and universities require FAFSA completion to qualify for institutional aid. That may include merit-based scholarships.

Will I get more FAFSA aid if I'm independent?

Yes, independent students generally qualify for larger grants through the FAFSA. However, this may not always be the case, such as if they are independent but have a wealthy spouse or are dependent and come from a large family. The Pell Grant program, for example, awards funds more easily to independent students than to dependent students. Dependent students may also receive smaller financial aid awards if their parents have high incomes, even if their parents don't contribute to their educational expenses.

How much can a dependent student earn before affecting FAFSA?

Dependent students can make over $11,000 in a year without those earnings impacting their FAFSA. The student income protection allowance is set at $11,130 for the 2024-25 academic year. That's up from $7,600 the year prior.

Can you get financial aid if your parents make $100,000?

You could receive financial aid even if your parents make $100,000. The calculation considers other factors in addition to income, such as the size of your family and the cost of attendance.

FAFSA Income Limits: How Much Income Is Too Much?

Updated on July 9, 2024

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Learn why the FAFSA is worth filing out, no matter how high, or low, your annual income is.

The Free Application for Federal Student Aid, better known as the FAFSA, opens the door to all types of federal, state, and institutional financial aid.

Unless you plan on paying for your entire college education out-of-pocket, everyone should submit the FAFSA. There are no FAFSA income limits, meaning there’s nothing stopping even the richest college students from submitting a FAFSA.

Thanks to the so-called “Simplified FAFSA” unveiled for the 2024-25 academic year, filling out the form is faster and easier than ever.

What Is the Maximum Income to Qualify for the FAFSA?

There is no maximum income you can have for the FAFSA.

Whether you’re the richest person in the country or have an annual income of $0, you can submit the FAFSA. The amount of money you are eligible to receive will vary depending on your income, but it does not preclude you from submitting a form to see what grants and student loans you may qualify for.

The Pell Grant, the federal government’s largest grant program for low- and middle-income students, is awarded based on your or your family’s income.

Some programs, including state grants and scholarships, don’t consider your income at all.

What Is COA?

Cost of attendance (COA) is an estimate of how much it will cost to attend college. It’s used to help calculate how much need-based aid you can qualify for. The higher the COA, the more aid you may receive.

COA is determined using the following expenses:

Tuition and fees
Textbooks, supplies, and course materials
Housing and meals
Transportation and miscellaneous personal expenses
Loan fees
Allowance for childcare
Costs related to disability
Costs of obtaining a license, certification, or credential

What Is SAI?

Your Student Aid Index (SAI) is a number assigned to pinpoint your financial need. The lower your SAI, the more financial aid you qualify for. The SAI is the new name for the Expected Family Contribution (EFC).

The FAFSA Processing System (FPS) calculates SAI primarily using tax information provided by your FAFSA and the IRS. You may need to manually submit tax and income information in some circumstances, like if you have a non-citizen parent or recently divorced parents.

The SAI formula for dependent students takes into account:

Parents’ income
Parents’ assets
Student’s income
Student’s assets
Family size

The SAI formula for independent students uses:

Student’s income
Student’s assets

What Is EFC?

Expected family contribution (EFC) is how FPS (formerly known as the Central Processing System) previously calculated your financial need.

However, starting with the 2024-25 academic year, the agency no longer uses EFC. It has now been replaced with the SAI.

What Types of Income Are Considered in the FAFSA?

The FAFSA considers both income and assets when calculating SAI, including parents, student’s, or spouse’s assets.

Income is the most straightforward metric counted. It includes both adjusted gross income (AGI) and certain types of untaxed income that are reported on federal income tax returns. Benefits received, including social security and unemployment, are also considered.

Assets, however, are more complicated. Real estate, family businesses, and stocks may be considered. Other assets, such as funds in a 401(k) account or pension plan, are not used in SAI calculations.

What Is the Income Limit for the Pell Grant?

The income limit to qualify for a Pell Grant award varies slightly depending on your state of residence, family size, dependency status, marriage status, and whether you have children.

Income Limits for Pell Grants (Continental U.S.)
Dependency status	Family of one	Family of two	Family of three	Family of four
Dependent, parent is a single parent	N/A	$59,508	$74,848	$90,188
Dependent, parent is not a single parent	N/A	N/A	$63,333	$76,313
Independent, single parent	N/A	$73,240	$92,120	$111,000
Independent, parent, but not a single parent	N/A	N/A	$80,605	$97,125
Independent, not a parent	$37,373	$50,353	$63,333	$76,313

The income limit for Pell Grants is calculated using the federal poverty guidelines. Hawaii and Alaska have slightly different guidelines, so income limits will vary slightly from the rest of the country.

Frequently Asked Questions About FAFSA Income Limits

There is no income that is too high to file a FAFSA. No matter how much you make, you can always submit a FAFSA. Eligibility for need-based financial aid increases as the cost of attendance increases, so even a wealthy student might qualify for financial aid at a higher-cost college. Wealthy students also qualify for federal student loans.

Federal Student Aid (FSA) will use your tax information to calculate your need for financial aid. The more you earn, the less financial aid you’re likely to be offered.

Note: The insights on this page — excluding school descriptions — were reviewed by an independent third party compensated for their time by BestColleges. Page last reviewed June 5, 2024.

Disclaimer: The information provided on this website does not, and is not intended to, constitute professional financial advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact a professional advisor before making decisions about financial issues.

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