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Personal Finance
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Are there any FAFSA income limits?

Filling out the FAFSA is the first step to receiving federal financial aid for college, regardless of your income level

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The FAFSA has no income limits, so you should complete the form each year you’re in college in order to be eligible for federal financial aid.   (Shutterstock)

The Free Application for Federal Student Aid, or FAFSA, is one of the most important forms you’ll need to fill out when you’re applying for college. Submitting the FAFSA helps schools determine whether you qualify for federal financial aid. The good news is there are no FAFSA income limits. As long as you’re considered an eligible student, you can complete the FAFSA — regardless of your income level. 

Keep reading to learn more about what types of financial aid are available to help cover educational expenses, how financial aid is calculated, and what to expect after you complete the FAFSA. 

If you need to take out private loans to fund your education, you can use Credible to compare student loan rates in minutes.

Are there any FAFSA income limits?

No, there aren’t any FAFSA income limits. Even if you think you or your parents make too much money to qualify for financial aid, it’s a good idea to complete the FAFSA each year you’re in school. Most people can qualify for some sort of financial aid. And the FAFSA isn’t just for federal aid. Schools generally rely on the FAFSA when making school-level grant and scholarship decisions, so if you don’t complete the form you may not get any aid. 

FAFSA application deadlines

As you’re completing the FAFSA, you’ll need to be aware of multiple application deadlines: federal, state, and college.

These are the FAFSA application deadlines for the 2022-23 academic year:

  • Federal — June 30, 2023, at 11:59 p.m. Central time; if you need to make corrections or updates to your FAFSA, you’ll have until Sept. 10, 2023, at 11:59 p.m. Central time.
  • State — Dates vary depending on the state you live in; visit the Federal Student Aid FAFSA deadlines page to find the specific deadline for your state.
  • College — Dates vary depending on the college, so contact the financial aid office of any schools you’re interested in to see what their deadlines are.

Since financial aid is limited, it’s important to complete your FAFSA as soon as possible to make sure you have the best chance of qualifying for aid. 

Types of financial aid

Financial aid comes in many different forms. Some types of financial aid you may qualify for include: 

  • Grants — Grants are a type of financial aid that’s awarded to undergraduate students, and sometimes graduate students, and they don’t have to be repaid. The amount you’ll receive depends on the cost of attendance at your school as well as your financial need. You may find grants at the federal level, state level, and through colleges, private companies, and nonprofit organizations.
  • Loans — If you need help funding your education with a loan, you have two types available: federal and private. Federal student loans are provided by the U.S. Department of Education, and your available options are Direct Subsidized, Direct Unsubsidized, and PLUS Loans. Subsidized Loans are based on financial need, whereas Direct Unsubsidized and PLUS Loans aren’t. Depending on the loan, it may only be available to undergraduate students and interest may or may not be subsidized. Private loans are issued by private lenders, and eligibility criteria may be a little more strict, especially if you’re applying without a cosigner. Unlike grants and scholarships, you have to repay both federal and private loans, plus interest. You should always exhaust your federal loan options before turning to private loans, because federal loans come with certain benefits and protections, like access to income-driven repayment plans and Public Service Loan Forgiveness (PSLF).
  • Scholarships — Many scholarships require applicants to submit FAFSA information in order to qualify, especially ones that are awarded based on financial need. Other scholarships may be awarded based on merit. Different kinds of scholarships might be available depending on your location, area of study, and other factors.
  • Work-study programs — Colleges participating in work-study programs offer government-funded part-time jobs for students who demonstrate financial need. These programs are usually available to both graduate and undergraduate students, and the work is typically related to your field of study.

If you’ve exhausted your federal financial aid options, Credible lets you compare student loan rates without affecting your credit.

Need-based financial aid vs. merit-based financial aid

After filling out the FAFSA, you may be offered either need-based or merit-based aid. 

Need-based aid

Need-based aid is based on a student's financial need. For example, you may be awarded a grant if you or your family make below a certain amount. Examples of need-based aid include Federal Pell Grants, some state grants, and federal work-study programs.

Merit-based aid

Merit-based financial aid is offered based on student achievements, whether that’s academic, athletic, or artistic. You or your family’s income or financial need isn’t taken into consideration. Scholarships are an example of merit-based aid.   

How financial aid is calculated

The FAFSA helps schools determine your level of financial need and the type and amount of federal aid you might get. Financial aid is determined by calculating your expected family contribution, or EFC, against the total cost of attendance at your school. The EFC formula is used to determine how much your family may be able to realistically contribute to your tuition. 

Income counted in the FAFSA calculation

Types of income that are included in the FAFSA calculation include: 

  • Your parents' taxed and untaxed income
  • Current assets if you or your parents are the account owner
  • Benefits you may receive, including unemployment or Social Security

Income not counted in the FAFSA calculation

Types of income that aren’t included in the FAFSA calculation include: 

  • 529 savings plans if the account owner isn't you or your parents
  • Financial aid already received for college
  • 529 withdrawals taken out before filling out the FAFSA

What happens after completing the FAFSA?

After submitting your FAFSA, the U.S. Department of Education will process your application within three to five days if you filed it electronically, and within seven to 10 days if you mailed it in. 

Once your FAFSA application is processed, you'll receive a copy of your Student Aid Report, or SAR, which is a summary of the information you submitted. The SAR also includes your EFC. Review the SAR and make sure all the information is correct — if not, make corrections as soon as possible. Then your SAR will be sent to the colleges you included on your FAFSA application. 

Since filling out the FAFSA is the only way you’ll be eligible to receive any financial aid for your education, it’s important to complete it each year that you’re in school. 

If you need private student loans to cover any gaps in your education costs, use Credible to easily compare student loan rates from various lenders.