You would be hard-pressed to find a parent who did not want to receive some sort of financial aid for their college-bound children, but far too many never even attempt to qualify.
In fact, many people assume that if they make too much money or have too many assets, then they have no chance of receiving any aid.
Clinging to that assumption, they don’t even bother to fill out the paperwork.
So is there is a specific level of income (this is a question we get all the time) that will disqualify you from financial aid eligibility?
Today we’ll dispel the rumors and let you know exactly who should be filling out the Free Application for Federal Student Aid (FAFSA). Here’s a hint: it’s you.
Income Limits and Financial Aid
Let’s be clear from the start; every single family with college students should fill out the FAFSA every single year.
No matter who you are or where you come from, every person enrolling in college has the right to submit their free financial aid application to the Department of Education.
That brings us to the specific question at hand: Does financial aid have an income limit?
The simple answer to that question is “no” – there is not a set maximum income level at which a family will be disqualified for financial aid consideration.
The manner in which the government determines a family’s eligibility for financial aid is far more thorough and considers a number of factors; not necessarily just income.
This determination is consolidated into what is known as the Expected Family Contribution (EFC).
An EFC is the amount of money that a family is expected to be able to contribute to their student’s education costs. The number comes from a special formula that considers your financial data and calculates the amount of money you can reasonably afford to put towards a college education.
As a general rule of thumb, the higher the EFC, the lower the amount of financial aid one can expect to receive.
Luckily, the EFC formula does not simply consider your income and then spit out a number based entirely on your paycheck. One of the most influential factors in determining an expected contribution is your adjusted gross income (AGI) which comes directly from your taxes (Form 1040).
However, the AGI is not the only factor considered in determining EFC. The size of a student’s household, number of household members currently attending college, the age of each member of the household, and their state of residence can all play a role in establishing a reliable EFC.
Simply put, just because your family has a higher level of income does not mean that you can assume that you will not receive any aid.
And for those who cannot escape a high EFC, this does not mean that you have no recourse to qualify for financial aid.
The simple act of filling out and submitting the FAFSA will alert prospective colleges to the fact that you are interested in some sort of monetary support. If the school is interested in your child, then they may discount your tuition or find some other way to provide reduced tuition costs, such as potential grants and scholarships.
Never assume when it comes to financial aid. Always do your research and do whatever it takes to give your child the best chance to receive financial assistance—starting with filling out the FAFSA.