What to Know About Financial Aid Income Limits

A common misconception about student aid is that you should only apply if your income is below a certain level. This assumption is why students and families are constantly trying to determine what is the maximum income to qualify for financial aid.

The truth is, while some student aid is need-based, some federal loans are available no matter what your need. Plus, there are merit-based forms of aid, too. If you’re heading to college, always fill out the FAFSA (Free Application for Federal Student Aid) to see what aid you qualify for.

Still wondering what financial aid income limits are? Even though there are no explicit limits, here’s more information about the financial situations of typical award recipients.

How’s aid calculated?

One of the reasons there aren’t specific FAFSA income limits is that the amount of financial aid awarded isn’t solely dependent on your income. Your financial need is determined by the difference between the cost of attendance (COA) for your program and your expected family contribution (EFC).

Cost of attendance

Here’s what goes into the federal government’s estimation of your COA:

• Tuition and fees
• Room and board, transportation
• Books and supplies such as a laptop
• Child care
• Disability-related costs

Expected family contribution

The federal government has a formula for determining your EFC. It can be somewhat complicated, but here are the basics as to what goes into it:

• Income (both taxed and untaxed)
• Assets
• Debt and expenses
• Federal benefits
• Family size
• The number of children in school

Not only could your cost of attendance change over time — especially if you change schools— but your EFC could change, too. If you were the only student in your family when you started your program, but one of your siblings has since enrolled in college, your EFC would decrease.

That’s why there’s no hard and fast rule as to how much gross income to qualify for financial aid.

Financial aid amounts by income level

This chart from the National Center for Education Statistics shows how much dependent undergraduates have to pay for school, based on family income and institution type — it can help you infer the amount of financial aid each income bracket receives.

	Less than $32,777	$32,777 to $71,634	$71,635 to $124,701	More than $124,701
Public two-year	$9,300	$11,600	$12,900	$13,200
Public four-year	$14,800	$18,200	$22,500	$26,000
Private for-profit	$24,400	29,100	$31,300	$37,800
Profiate non-profit, four year	$20,100	$24,800	$30,500	$39,400

As you can see, even students from families earning incomes in the six digits can still receive some financial aid.

Common loan limits

After filling out the FAFSA, you could be eligible for the following types of financial aid. The limits do change, often annually.

• Pell Grant: For the 2021-22 school year the Pell Grant maximum is $6,495.
• Federal work-study: Federal work-study jobs are paid minimum wage. The amount of hours you can work is determined when you are awarded the financial aid and can be reviewed based on your academics.
• Direct subsidized or unsubsidized loan: For dependent students, the first-year undergraduate loan limit is $5,500, the second year is $6,500 and the third year and beyond is $7,500. The maximum unsubsidized loan amount over your entire undergraduate degree is $23,000 if you’re a dependent student. For independent students, the aggregate total is $57,500 or $9,500 in your first year, $10,500 in your second, and $12,500 in your third. For graduate students, the total is $20,500.
• Direct PLUS Loan: PLUS Loans are for a maximum of COA minus other financial aid that you’ve already received.

FAQs: Financial aid income limit