Financial Aid for a High Income Family
Every year, I hear parents say, “We’re not bothering to submit FAFSA, because our income is too high to qualify for financial aid.” This stems from one of the most unfortunate misconceptions about college financial aid: that it’s only available to students with financial need. The truth is, many colleges do have financial aid for a high income family! But at many colleges, you will still need to file a FAFSA in order to receive it. Below are 4 reasons why I recommend that all families submit a FAFSA, regardless of their income level.
Many families assume they won’t qualify for aid, without knowing anything about how need is calculated. The reality is that eligibility for financial aid is determined by complex formulas, which include more than just parent income. So even if income is high, other factors, such as assets and expenses, are also taken into account. Furthermore, most colleges don’t have clearly stated cut-offs for their institutional aid, so there is no way of knowing for sure if you make too much. Many families who assume they won’t qualify for anything are pleasantly surprised when the award letters arrive.
Many colleges require FAFSA for merit-based aid
Merit-based aid, available at almost all colleges, is awarded based on a student’s academic or extracurricular achievements. In most cases, a student does not have to be a superstar to qualify; in fact, many colleges give some merit aid to every student who they accept. However, often the colleges will only give this aid to students who submit FAFSA. The only way to know for sure is to check with each college individually, but it’s far more time efficient to simply file a FAFSA.
Some colleges only offer aid in subsequent years if FAFSA was submitted when the student was an incoming freshmen
Over the course of 4-5 years, the availability of scholarships may change, and a student might be eligible for awards that didn’t previously exist. Furthermore, a family’s financial circumstances can change. While nobody plans to be laid off or incur unexpected expenses, it does happen. Some colleges will only give additional awards to students who filed FAFSA as incoming freshmen. Again, the only way to know for sure is to contact each college individually, but I think it’s easier to just have your FAFSA on file in advance.
Students must file FAFSA to qualify for Federal student loans
Even if you’re fairly certain you don’t want or need loans, I strongly recommend leaving this option open until award letters arrive. The Federal student loans have very reasonable interest rates and repayment terms, and I’ve seen many families opt to accept them once they saw their award letters. But they will only be offered if the student filed a FAFSA. Remember that filing does not commit you to taking out loans – it only leaves the option open.
If you’re curious about how need-based aid is determined, read my post here, or learn more about the FAFSA in this post. You can also contact me if you’d like to talk about your particular financial situation – I offer a 30-minute consultation completely free of charge.