How Extra Income Affects Federal Financial Aid Eligibility

Although you may have gotten that part-time job in order to have some extra spending money, your yearly income could still have a bearing on your financial aid eligibility. It's pretty much a given that the less you and your family earn, the more likely you'll get grantsand scholarships.

Federal Financial Aid and EFC

The Expected Family Contribution, or EFC, is the amount of money your FAFSA tells your university that you and your parents should be expected to contribute every year. It is calculated as:

• 35%of your assets
• 50% of a your income
• 2.6 to 5.6% of your parent's assets
• 22 to 47% of your parent's income.

This means that you are expected to use half of your yearly income toward the cost of college. The more money you make, the more you are expected to contribute. And the more money you are expected to contribute, the less money in federal and state aid you will probably receive.

Income Exemptions for Federal Financial Aid Eligibility

While you may start to get nervous that half of your babysitting gig's profits may be considered by your school as income towards tuition, you can still breathe a sigh of relief. The FAFSA doesn't count the first $3,080 of your income as part of your EFC when deciding your financial aid eligibility. Anything you make above this, however, will be part of your EFC.

Remember this if you're planning on starting up your own business or plan on working a ton of hours over the summer. Also, work studyearnings do not affect your EFC. That money is supposed to be part of your financial aid package, so they do not deem it as income. 

If you liked this you may also like:

• Student Loan Forgiveness Act Aims to Eliminate Some of Your Debt

  If you’re like many other Americans, you racked up some debt in order to afford your college education. Actually, you racked up a lot of it. According to a recent article in the U.S. News & World Report, total outstanding student loan debt in the United States surpassed total credit card debt in 2010. Perhaps even more shocking is that outstanding student loan debt is expected to exceed $1 trillion this year. That’s a lot of zeroes!

• Making a Transcript Request or Transfer for College

  Your academic transcript is the most official documentation of your academic standing that exists, though really it's just a summary of your courses and grades printed on nice paper. When you apply to colleges and universities it will be required that you submit your transcript along with the rest of your application. Submitting a report card won't suffice.

• College Students: Land a Part-Time Job – Plan Ahead, Be Prepared

  Getting a job these days isn’t easy, and it can be especially difficult when you are a full-time, or even a part-time, student. Is it possible to find a part-time job that allows you to juggle work and school? Luckily, the answer is ’yes,’ but it will take work to land a good job.

• Dependency Status - How It Affects Federal Student Aid

  You might legally be able to buy shots at the local bar, but you still need your parents' information when filling out the FAFSA application. The U.S. Department of Education considers a student a dependent until the age of 24, except in certain circumstances. This is important because your dependency status can affects how your Expected Family Contribution, or EFC, is calculated on the FAFSA application.

• Education Grants for Women

  While some grants are merit-based, other grants will reward you partly for your gender. Sorry, fellas, we don't think there are any specifically for you. But, ladies, you can take advantage of the plethora of grants and scholarships that awards you for being the so-called "fairer sex."

Begin our online process to see your personalized savings.

Start Now

Back Print