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In recent decades, college tuition has skyrocketed. Families know that educating a child isn't cheap. You may be wondering if you make too much money to be able to benefit from the FAFSA. In this article, we cover this and more.
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The price of a college education has risen drastically over the last few decades. Families are well aware that paying for the education of one or more children is not a small expense. If you add on the additional cost of education at private universities, the funding process becomes even more difficult. Anyone who has been through the college application process is sure to have heard of FAFSA. The Free Application for Federal Student Aid (FAFSA) is the form that a student needs to fill out to get any financial aid from the federal government so that they get some help to pay for college. As the name suggests, FAFSA is a free form that determines your eligibility as a student for many grants and aid for all income levels. It is an integral part of the financial aid college application process.
Families from higher income brackets generally tend to ask some of these questions when it comes to college application and FAFSA:
But do not worry. We have got you covered. In this article will answer all your questions regarding FAFSA when earning a higher household income.
The most compact answer to this question is, yes - yes, you should. All students should file the Free Application for Federal Student Aid (FAFSA). In words on Wayne Gretzky, "You miss 100% of the shots you don't take". The questions we have discussed above should be carefully thought about and all the facts should be considered thoroughly. This is because parents and children usually tend to overestimate their ability for merit based aid and underestimate their eligibility for need-based aid. First, let us clarify what need-based aid and merit-based aid is.
Merit-based aid is awarded to students based on their academic performance or other merits. On the other hand, need-based financial aid is awarded to students based on their financial profile. Need-based financial aid takes into account the income and assets of the student's family. Thus, students looking to apply for need-based financial aid should complete FAFSA and potentially the College Board's CSS profile (required mainly by private colleges). It is a relatively easy and straightforward process to apply for need-based financial aid, and it typically only requires the completion of the FAFSA.
In contrast, the process of merit-based financial aid is a little more nuanced. It depends on what type of "merit" you're qualifying for...academic, athletic, other? The application for merit aid is often lengthy and time-consuming.
A specific formula determines a student's eligibility for need-based financial aid. According to the formula, a student's Expected Family Contribution (EFC) is subtracted from a college's total cost of attendance. This formula determines a student's "financial need". The financial need of the student helps determine how much financial aid for which they qualify.
There is a simple answer to this question: when it comes to the FAFSA, there is no limit on income. Thus, no matter how high your or your parents' income is, everyone can apply for financial aid. The FAFSA takes multiple factors into account while determining a student's financial need for college. Income is just one portion of the EFC calculations. There are also other factors that may put you in a better position for aid than you may think.
For example:
Believe us, just because you think you make too much money to receive financial aid still does not mean that a defined income cut-off exists.
Families do not always know how 'qualified' they are for financial aid. You have to understand that it does not matter if you have a high or low income; you can still qualify for financial aid such as low-interest student loans. Many schools will also not grant merit scholarships to families that don't fill out the FAFSA or CSS Profile.
Quick tip: You also automatically become eligible for financial aid from your state and sometimes also from your school when you fill out the FAFSA. Thus, applying for financial aid is the only way that you can know for sure whether or not you are eligible.
At first glance, your family's income may look high, but keep in mind the fact that income is only one of all the several factors that are considered to make a decision about child's eligibility to get financial aid. There is a complex formula and an in depth calculation involved when the colleges determine financial aid. Some of the factors are- size of the household, the size of business that your family owns, number of members of the family who are simultaneously attending college, age of the older parent, total assets owned by the family, cost of the tuition at the college you are going attend and many other interwoven and complex factors.
Don't assume which of these factors could increase or decrease your eligibility to get financial aid for college.
People incur huge losses in their businesses. They may suffer from accidents, lose jobs or may be diagnosed from some medical ailment. Families would certainly want their children's future to be secure in case any such misfortune befalls upon them. Thus, it is safe to have a ready aid application just in case your family's financial circumstances go through a change. It doesn't hurt to use every tool at your disposal.
It is highly likely that colleges may not consider your application for financial aid if you submit the application after the given deadlines even if there has been a significant change in the ability of your family to pay for your college. If you have a FAFSA that has been filed already, it may give you the opportunity to request your college to reconsider funding your education due to a change in your financial circumstances.
There are some scholarship and grant programs that require students to submit FAFSA so that institutions know you are trying to maximize your financial aid. As mentioned previously, there are some schools that require FAFSA or CSS profile in order to be considered for merit aid.
There are also some schools that automatically give higher preference to students who have submitted the FAFSA for merit based scholarships. If you are looking to take advantage of merit based financial aid for things like academic scholarships, extra-curricular activities, academic standing or test scores, it is best that you submit a FAFSA regardless of how high you or your parents' income is. You may also be eligible for grants provided by your state and some of these grants are not based on financial need.
If you need to borrow money for school, you'll want to fill out the FAFSA. You as a student are required to complete a FAFSA if you want to get the benefits of federal student loans. Federal student loans are by far the best option for borrowing money for school. There are some non-need based loans that you can qualify for even if you are from a wealthy family. Thus, if you want to pay for your education independently and be responsible for financing your own education, it is required that you complete a FAFSA so that you can have the access to government college loans.
Quick tip: A FAFSA isn't required for private student loans.
Make sure to submit a FAFSA as early as possible because there are some states and schools that have limited funds and you may miss out on the chance to get them. As a responsible student, you must be interested in benefitting from each cost-cutting opportunity that is available to you. Without the FAFSA, merit based aids, state and school aids or even student loans aren't possible, making college expenses potentially more expensive in the long run. We hope this article answered all your questions regarding whether or not you should apply for FAFSA.
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