What Are FAFSA’s Income Limits?

Funding your college education can be daunting if you don’t have the means. However, you can qualify for the Free Application for Federal Student Aid (FAFSA) fund to give your further studies a much-needed shove. The only issue is that the income limit requirement that qualifies you for this funding can be a grey area that requires you to understand before making your move. So, what are FAFSA’s income limits?

This article will inform you about everything you need about FASFA’s income limit requirements.

What Is FAFSA?

FAFSA is a form students in the United States complete when applying for college financial aid. The federal government typically reimburses these funds to qualified individuals, but they must prove their inability to pay for their college education. People applying for FAFSA must disclose information about their assets, household size, and family income.

The lending body is mandated to review the applications and vet individuals for eligibility. The board will deny you the aid if your application doesn’t meet the set requirements. One way to determine eligibility is by checking your income limit, which has primarily qualified and disqualified individuals in the past.

What are FAFSA’s Income Limits?

No income limit qualifies or disqualifies you for FAFSA aid. The body doesn’t put any qualification restrictions based on income. However, please note that your expected family contribution (EFC) determines the maximum aid you may receive. Nonetheless, your parents should make less than $27,000 in the 2022-2023 school year to get the most aid.

The EFC refers to how much you and your family should contribute in one academic year. You can determine your EFC using an established formula that the U.S. Congress has put forward – the federal methodology. It considers factors, including assets, family income, and household size. Moreover, the number of family members in college, the basic living costs, and taxes paid are other determiners in the EFC formula.

The federal government, however, looks set to replace EFC with the student aid index (SAI) by June 2023. This move will help eliminate the confusions that most families face and allow for adjustments that’ll help low-income students.

Which Low-Income FAFSA Aids Exist?

There currently are no income limits for qualifying for FAFSA, but the federal government aims to allocate this financial aid to student groups that need it the most. That means some FAFSA aid may subtly consider low-income students despite having no income limit sets. These aids include the following:

Pell Grants

Pell Grants are need-based grants the federal government provides to help low-income students afford college. The maximum 2022-2023 Pell Grant award is $6,495. The income requirements for Pell Grant eligibility vary, but students from families with an income of up to around $60,000 may qualify.

State Aid

In addition to federal aid, a vast majority of the states offer students financial aid programs. Each state has its eligibility criteria and income limits for state aid. Researching and understanding the specific requirements of your state’s aid programs is essential. New Jersey and Washington are pioneering states that offer these need-based grants.

Institutional Aid

Colleges and universities often have their financial aid programs to assist students. These programs may have income limits and different eligibility criteria from federal or state programs. Students should consult the financial aid offices of their desired institutions to explore available institutional aid options.

Work-Study

The Federal Work-Study Program offers part-time employment opportunities for eligible students to earn money to help cover educational expenses. The program is available to undergraduate and graduate students with financial need. Income limits and eligibility are determined based on the information provided on the FAFSA form.

Changes in Income or Circumstances and How they Impact FAFSA Eligibility

Please note that any changes in income or circumstances can affect your FAFSA eligibility and the financial aid amount you may receive, which include the following:

Reporting income and financial information – It’s best to always communicate any financial changes in your family to avoid incorrect aid calculations or attracting potential penalties. These penalties can include declined subsequent financial aid requests.

Exceptional circumstances – The financial aid office might consider your circumstances and adjust your aid package if your family experiences a significant change in income.

Loss of income – This factor may heighten your chances of securing need-based aid and may result from your family’s job loss or reduced work hours. In that regard, FAFSA expects your EFC to be low, increasing your eligibility for the aid.

Changes in family size – Family size can impact your FAFSA eligibility, and that can be due to the birth of a sibling or a change in household composition. Additional family members in college may also affect your aid eligibility. It’d be best to constantly update your FAFSA if there are any changes to your family size or the number of family members enrolled in college.

Other Requirements that Qualify You for FAFSA in Addition to Expected EFC

In addition to your family’s EFC, FAFSA also requires that you meet several set requirements that increase your chances of qualifying for the aid, which include the following:

Citizenship or Eligible Non-Citizen Status

You must be a U.S. citizen, a U.S. national, or an eligible non-citizen to qualify for federal financial aid. Eligible non-citizens generally include permanent residents with a Green Card, individuals with refugee or asylum status, and other specifically designated categories.

Valid Social Security Number (SSN)

You must have a valid SSN to complete the FAFSA. This requirement applies to U.S. citizens and eligible non-citizens. You can, however, provide an Alien Registration Number (ARN) instead if you’re an eligible non-citizen without an SSN.

Enrollment in an Eligible Degree Program

It’d be best to enroll or be accepted for enrollment in an eligible degree program at an accredited institution. Typically, undergraduate, graduate, and professional degree programs qualify, while non-degree programs may have limited eligibility.

Satisfactory Academic Progress (SAP)

To remain eligible for this financial aid, you must maintain satisfactory academic progress. That includes meeting minimum GPA requirements, completing a certain percentage of credits attempted, and progressing toward degree completion within a specified timeframe.

High School Diploma, GED, or Homeschooling Completion

To be eligible for the aid, you must have a General Educational Development (GED) certificate, a high school diploma certificate, or have completed a homeschooling program recognized under state law.

Conclusion

Free Application for Federal Student Aid doesn’t have a set income limit for the 2022-2023 school year to qualify for the program. However, your parents should earn at least $27,000 to enable you to qualify for the maximum aid. Other eligibility requirements also remain valid, and it’d help if you ensure that you meet them all.