FAFSA Explained – Think You Make Too Much to File? Think Again!
Written by: Sarah Miller for Student Choice
We’ve talked (a lot) about the importance of filing your FAFSA to get free money for college. It may seem tedious, but it’s an important step in obtaining financial aid. Once you’ve provided all the necessary information and filed, you may wonder exactly what the government does with all of that information. What matters and what doesn’t? How is your need determined?
First Things First
First off, let’s define something – financial aid includes scholarships, grants, and student loans made directly by the federal government. Those student loans can be subsidized and unsubsidized (more information about subsidized and unsubsidized loans) which simply means whether or not you receive some help from the government paying the interest. So, while, you’re right, you may not receive as much financial aid, that does NOT mean you won’t qualify for some kind of aid. Regardless of your financial situation, you will more than likely (see federal student loan eligibility requirements) still qualify for a federal student loan (federal student loan limits here).
So what else should you know? Well…
For Richer or Poorer?
According to a recent article from The Washington Post , many families don’t complete a FAFSA simply because they think they make too much money to qualify for aid. That’s a big mistake! Your family doesn’t have to be low, or even middle, income to qualify for grants. You never know unless you apply!
However, if your family is in a higher salary range (six figures) you can probably expect to receive less aid. That’s because your Expected Family Contribution (EFC) – the amount you should be able to pay out of pocket – is higher. The higher your EFC, the lower your federal aid package will be.
*Important note: Your EFC is NOT the amount of money your family will actually have to pay for college. It is a number used by your college to calculate how much financial aid you are eligible to receive.
Home values and retirement accounts generally are not considered for your FAFSA. Savings, stocks, and other sources of income may come into play, but the government wants to know how much money your family has available to pay for college, not what assets they own.
Your Own Paycheck
Odds are you aren’t making big bucks in high school, but if you have a job your income will be taken into account too. Student income under $6,310 is excluded but anything over that will be considered in your EFC.
What Helps Your Cause
Students with a sibling in college and those with family income less than $25,000 are in a position to receive more financial aid. You’ll probably also receive more financial aid opportunities from the government if you attend a private school simply because they cost more to attend.
Remember Your Options
Scholarships are great, but income-based federal student aid can be the biggest chunk of the financial aid puzzle. Remember, you will still likely qualify for a federal student loan, regardless of income. But, you must fill out the FAFSA to get it. If you still aren’t sure you can afford college after you complete your FAFSA and the financial aid process, all is not lost! Your local credit union can help you find lower cost financing options to help fill the gap. To find your credit union, or if you don’t have one yet, simply click the link below.
You can start filing your FAFSA now, and the earlier you file the more money you may be eligible for. Remember, it’s FREE to complete the FAFSA, so the only thing you have to lose is free money for college! Check out the link if you want more information about the FAFSA process and how your need for financial aid is calculated. You can also use the U.S. Department of Education’s FAFSA4caster to learn more about your options for paying for college.