Submitting a Free Application for Federal Student Aid (FAFSA) is the first step in accessing college funding, regardless of your income. Although there are some broad requirements you must meet to qualify for federal aid, there’s no FAFSA income limit.
The FAFSA’s calculations are complex and consider many factors outside of your earnings, including your school’s cost of attendance, your family size, and your year in school. Here’s how your income affects the FAFSA, how to fill out an application, and alternative funding to explore.
What are the FAFSA income limits?
A common myth is that students from high-income families won’t qualify for FAFSA funding. In reality, there’s no maximum income cap that determines your eligibility for aid.
Although your earnings are a factor on the FAFSA, only some programs are based on need. The FAFSA also provides access to non-need-based programs that you might qualify for if you meet the basic applicant requirements:
- Be a U.S. citizen, permanent resident, or eligible noncitizen.
- Have a Social Security number.
- Qualify to get a higher education, such as holding a high school diploma or GED.
- Be enrolled in an eligible degree or certification program.
- Enroll at least half-time to qualify for federal student loans.
- Maintain satisfactory academic progress, based on your school’s definition.
- Not be in default on an existing federal student loan, or owe money on a federal grant.
As long as you can meet these requirements, you can apply for aid through the FAFSA.
How financial aid is calculated
The way your federal aid offer is determined is complicated. There are many factors that contribute to which programs you’re eligible for, and how much aid you’re offered.
Here’s a table with some of the biggest contributors to your financial aid calculation:
To determine how much aid you qualify for, your school’s financial aid administrator subtracts your EFC from the cost of attendance. The remaining amount is your “financial need,” which determines how much need-based aid you’re eligible for, if any.
In a separate calculation, the difference between the school’s cost of attendance and any financial aid you’ve been awarded thus far is how much non-need-based aid you can receive.
Types of federal financial aid
There are many different federal aid programs that the FAFSA can help you unlock. However, these options fall under two overarching types: funds that don’t consider your income or need-based aid meant for low-income students.
Not based on income
Most federal student loans aren’t based on financial need, including Direct Unsubsidized Loans and PLUS loans.
Direct Unsubsidized Loans are offered to undergraduate and graduate students. Interest starts accruing on the loan as soon as the funds are disbursed, but you won’t have to make payments until after you leave school.
Another borrowing option is a Direct PLUS Loan. This program is available to graduates and professional students, as well as parents of dependent undergraduates. It requires a credit check, though only “adverse credit,” such as a recent bankruptcy, repossession, or foreclosure, is a factor.
Need-based aid
Students who qualify can access impactful awards by submitting the FAFSA. If your school determines that you have financial need, you might be eligible for a Direct Subsidized Loan.
Subsidized loans are available to undergraduate students only. The biggest benefit is that the government pays for any interest that accrues during deferment — including while you attend school — and your grace period. You’re responsible for interest costs once your loan enters active repayment.
Additionally, students who demonstrate “exceptional financial need” have access to programs like the federal Pell Grant, which is designed for low-income applicants. Grant awards can change annually, and typically don’t have to be repaid. For the 2023-24 year, the maximum Pell Grant award is $7,395.
Another need-based program is federal work-study, which offers undergraduate and graduate students part-time work opportunities on- and off-campus. It guarantees at least a federal hourly minimum wage, but there are restrictions to ensure you maintain satisfactory academic progress. For example, you may be restricted in how many hours you can work.
How to complete the FAFSA
It’s typically easiest to complete your FAFSA online at StudentAid.gov, but you can also print a PDF version of the FAFSA to submit.
To start, you’ll log in with your Federal Student Aid (FSA) ID — or create an ID if you haven’t already. Once you begin the form, the FAFSA will ask for your Social Security number, driver’s license number, tax information, asset statements, and other documents for untaxed income. If you’re a dependent student, you’ll also need to include a parent’s information.
Even if you think your family earns too much money, it’s worth submitting the FAFSA. It’s a free process that could unlock thousands of dollars in various awards; even a few hundred dollars in aid can help cover the cost of textbooks for a semester.
Additionally, states, schools, and third-party sources that offer scholarships or grants often require a filed FAFSA to apply. Skipping out on this form could leave you ineligible for other types of aid.
Related: How to Apply for FAFSA: Deadlines, Tips, and FAQs
Alternatives to FAFSA funding
If you need more aid than the FAFSA awards you, or you’re otherwise ineligible for federal aid, here are other ways to pay for college:
- Scholarships or grants: These forms of financial aid typically don’t have to be repaid, and can be found through your school, state, professional associations, private organizations, and nonprofits. Start your search with the Department of Labor’s scholarship search tool.
- Tuition reimbursement: An increasing number of employers offer tuition reimbursement benefits to their employees. If you’re working, ask your human resources department if it covers all or a portion of tuition fees for employees — or consider switching to a company that does.
- Private student loans: Sometimes your federal financial aid doesn’t cover all your college costs. In that case, a private student loan can help you bridge the gap. Private loans offer fixed or variable rates, and different repayment terms depending on your lender. Always compare multiple private student loan rates to ensure you find the best fit for your needs.
