One of the most common questions we get asked about financial aid is what the income limit is to qualify for grants and other financial assistance – in fact, it’s been a topic of discussion on Facebook. Many people assume that your income is the one hard and and fast variable that determines your financial aid eligibility, but the truth is that there is no income limit for financial aid.
There is a mathematical equation that the government uses to determine what financial aid you are eligible for. This equation takes into a number of financial items that may apply to you, including:
- Enrollment status (full-time, part-time, etc.)
- Your dependency status
- The number of people in your family
- The number of people in your family who are attending college
- The state you live in
- If one or both parents work (if you are a dependent student)
- The amount of money you have in your checking & savings accounts
- Your earnings from work
- Other tax-deferred or untaxed income from child support, grants & scholarships, military pay, etc.
- The income tax paid the previous year
- Your investments & assets
- Your parents assets (again, if you are a dependent student)
Some folks may go along the assumption that the less they make, the more financial aid they will qualify for. While that’s not necessarily true, need-based federal education grants such as the Pell Grant are typically awarded to undergraduates with a high degree of financial need. In fact, most Pell Grants go to students with a total family income around or below $20,000. But, students whose families have a total income of up to $50,000 may be eligible too.
The only way to know what financial aid you will get is to fill out a FAFSA. The FAFSA asks you a number of questions that help determine your Estimated Family Contribution (EFC), which is the amount of money the government thinks you and/or your family can pay for your tuition for that school year. For more information on the EFC and the formula used to determine your eligibility, see How Financial Aid is Distributed.