FAFSA Income Limits 2024: Are You Eligible For Student Aid? (2024)

Filling out the Free Application for Federal Student Aid (FAFSA) is the first step in qualifying for financial aid like grants and loans. However, many students still skip it.

According to the National College Attainment Network (NCAN), the high school class of 2022 had a 58.6% FAFSA completion rate. The NCAN estimates that students miss out on about $3.6 billion in Pell Grant funding by not completing the FAFSA.

Students often skip filling out the FAFSA because they think their families make too much money to qualify for aid. However, there are no FAFSA income limits, so you can submit it—and potentially get valuable financial aid—regardless of your family’s earnings.

What Are the FAFSA Income Limits for 2024?

Both students and their parents often think their household income makes them ineligible for financial aid. However, there’s no income limit for the FAFSA, and the U.S. Department of Education does not have an income cap for federal financial aid.

These are the basic requirements you must meet to qualify for aid:

• Be a U.S. citizen or eligible noncitizen
• Have a valid Social Security number (students from the Republic of the Marshall Islands, Federated States of Micronesia or the Republic of Palau are exempt from this requirement)
• Be enrolled or accepted into an eligible degree or certificate program
• Complete a high school diploma or its equivalent, such as a General Educational
  Development (GED) certificate or an approved homeschooling program

How Your Financial Aid Is Calculated

After submitting your FAFSA, the government sends you an email with your Student Aid Report (SAR). This is a summary of the information you provided on the FAFSA, and it also includes your Expected Family Contribution (EFC).

Your EFC isn’t how much you have to pay; it’s an index that schools use to evaluate your aid eligibility. It determines how much of the school’s total cost of attendance is covered by grants and other need-based aid. The smaller your EFC, the more financial aid you are eligible to receive.

However, many families find the EFC confusing, so the government replaced the EFC with the Student Aid Index (SAI) for the 2024-25 award year and moving forward.

The SAI is similar to the EFC and uses financial information from your FAFSA to determine aid eligibility. Having an SAI below zero qualifies you for the full Pell Grant. If you don’t qualify for the full grant amount, your grant award may depend on how your family size and income compare to poverty guidelines.

The new SAI methodology is designed to expand aid to low-income students. It also allows financial aid professionals to make aid adjustments due to extenuating circ*mstances, such as a drop in income due to a death in the family.

Some FAFSA Aid Is Based on Income

While there are no FAFSA income limits, some federal financial aid is distributed only to low-income students, including the following:

Pell Grants

The Pell Grant is a federal grant worth up to $7,395 for the 2023-24 school year. The amount available for the 2024-25 school year has not yet been announced.

Pell Grant income limits don’t exist. However, Pell Grants are solely for students with exceptional financial need. Your need is determined by your EFC for award year 2023-24 or SAI for award year 2024-25.

Direct Subsidized Loans

Subsidized loans are only available to undergraduate students with significant financial need. With federal direct subsidized loans, the major advantage is that the government covers accrued interest while you’re in school, during your loan’s grace period and during any eligible deferments.

State Aid

Some financial aid distributed by states is based on income. You can find financial aid opportunities by contacting your state education agency. States that offer need-based grants include:

• New Jersey. Through the New Jersey Tuition Aid Grant program, students can receive an award that covers a portion of the tuition at an eligible school in the state.
• Washington. The Washington College Grant covers some or all of the tuition costs at approved in-state colleges or training programs for low- and middle-income students.

Institutional Aid

Colleges often provide their own need-based grants, and they use the information you submit on your FAFSA to determine your eligibility. For example:

• Penn State University: The Penn State Academic Grant is a need-based award for undergraduate students who are enrolled full-time.
• Colorado State University: The university has several need-based financial aid opportunities, such as the CSU Ram Grant. It provides up to $6,900 for Colorado residents enrolled in an undergraduate program to help with tuition and other expenses.

Work-Study

Students with financial need—as determined by the FAFSA—may be eligible for federal or state work-study programs. Through these programs, students get part-time jobs and use their earnings to pay for some of their education-related expenses.

Other Forms of Financial Aid

If you don’t qualify for need-based aid, other financial aid options are available to all students regardless of financial standing, such as:

• Scholarships. Typically, scholarships are awarded based on your achievements rather than your financial needs. You may be eligible for scholarships from your college, state, nonprofit organizations or corporations.
• Unsubsidized loans. Federal direct unsubsidized loans are available to undergraduate and graduate students who need additional funding for college, and there’s no financial need requirement. However, you’re responsible for paying interest on these loans at all periods, including while attending school and during periods of deferment.
• PLUS loans. Parent and grad PLUS loans allow you to borrow up to the total cost of attendance, and there’s no income limit to qualify. PLUS loans are another type of unsubsidized loan.

When it comes to the FAFSA, it’s wise to fill it out as early as possible—even if you think your family makes too much money. The FAFSA takes into account many factors, including your family size and the schools you wish to attend, so you may be surprised by how much financial aid you can receive.