Why You Should Fill Out the FAFSA Even If Your Parents Make Too Much Money

Filling out the FAFSA can still unlock doors to valuable college aid

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It doesn’t matter whether you choose a state college or a private university, most of us can agree that the cost of a college education is painfully high. Getting financial aid in the form of scholarships and grants can be a great way to reduce tuition costs and make college affordable for more families.

One step in the financial aid eligibility process involves filling out the FAFSA—the Free Application for Federal Student Aid. But should you even bother with this form if your parents make a lot of money? 

What’s the Maximum Income to Qualify for Financial Aid?

You may be surprised to learn that there is no specific income threshold when it comes to federal financial aid eligibility. Yes, you may have a difficult time demonstrating need if you are a dependent and your parents make seven figures a year. However, you won’t find a defined income cutoff. Instead, the FAFSA will take multiple variables into account when determining your financial need for college. That’s why it’s important to still fill out the FAFSA, even if you think your parents make too much money.

Purpose of the FAFSA

According to Sallie Mae, a mere 43% of students paid for college tuition with family savings and/or income in the 2018-19 school year. The rest covered their tuition with some form of financial aid, through a mixture of grants, scholarships, and borrowed money.

The FAFSA is an integral part of the college financial aid process. Its purpose is to help demonstrate a financial need for current and upcoming students. By analyzing your parents’ income and assets, your school is better able to determine the aid that will be made available to you.

Many schools will recommend filling out the FAFSA as early as possible, even if you don’t think you’ll qualify for or use aid. 

What You’ll Need for the FAFSA

You’ll be asked to provide certain information in order to complete your FAFSA submission. This includes:

  • Tax returns for you and your parents (if you’re a dependent)
  • Social Security numbers for you and your parents
  • Records on untaxed income (such as child support or interest income)
  • Information on personal and family assets (if a dependent), such as bank account balances, investments, and real estate holdings

The school will use the FAFSA data to determine your expected family contribution, or EFC, which is the amount you are expected to contribute toward your college expenses. The difference between your EFC and your school’s cost is the amount of financial aid for which you are eligible.

The U.S. Department of Education’s FAFSA4caster tool estimates your eligibility for financial aid. This could help you understand what you may receive before even filling out the FAFSA.

Some Merit-Based Aid Requires FAFSA

Merit and athletic scholarships are another important reason to fill out the FAFSA. Even if you don’t think you’ll qualify for need-based aid, many schools will request that you at least complete the FAFSA before they can award you other funds.

If you are hoping to take advantage of merit-based funding for things like test scores, academic standing, or even extracurricular activities, or academic scholarships, submitting a FAFSA is in your best interest regardless of how much your parents earn.

The FAFSA and Student Loans

Maybe you already know you won’t qualify for federal grants or need-based scholarships, and that your college education will need to be funded by student loans. In that case, you’re not alone: A whopping 42% of adults who attended college have some sort of debt from their education. If this is the case for you, plan to submit a FAFSA as early as possible.

While a FAFSA typically isn’t required for private student loans, any federal loans you take out will require one on file first. 

Making a Case for Financial Aid 

Each year, there are countless students who are denied federal aid—or found eligible for too little aid—even if they are actually unable to afford college. So, what can you do if this happens to you? 

Plan to take the fight to your college financial aid office. Be prepared to make a case for yourself, outlining why you should be eligible for additional aid. Maybe your parents earn enough money but also have to cover extensive medical bills for a sibling. Or perhaps your parents don’t plan to pay for your education, but their incomes still get factored into the FAFSA equations anyway.

In this case, it’s wise to make a list of extenuating circumstances that the FAFSA may not have taken into account. If your school’s financial aid office agrees with you, they may be able to open the door to additional grants, need-based scholarships, or work-study opportunities.

The Bottom Line

Unless your last name is Gates or Bezos, you’re probably interested in taking advantage of every cost-cutting opportunity available for your college education. There are many ways to reduce your out-of-pocket educational expenses—including grants and scholarships—but almost all of them require you to fill out the FAFSA first.

Since the FAFSA’s purpose is to determine need-based eligibility, many families believe that it’s a waste of time if their income is too high. However, this is one of the biggest college myths around, and can result in leaving a lot of money on the table.

By filling out the FAFSA, you not only open the door to federal, state, and school aid, you also make it possible to receive things like merit-based scholarships and even take out federal student loans if needed. Without the FAFSA, these typically aren’t available to you, potentially making the upfront expense of college impossible.

Whether or not you plan to accept financial aid, and even if you believe you couldn’t possibly qualify, take the time to fill out the FAFSA early. After all, every penny you accept toward college expenses is a penny saved for your future.

Article Sources

  1. Federal Student Aid. "Financial Aid Eligibility: Who Gets Aid." Accessed March 6, 2020.

  2. Sallie Mae. "How America Pays for College 2019." Accessed March 6, 2020.

  3. Board of Governors of the Federal Reserve System. "Report on the Economic Well-Being of U.S. Households in 2017 - May 2018." Accessed March 6, 2020.