I’m a senior and I live in a household of 4 and my mom only makes <32k a year. So I know I automatically eligible for financial aid. But what if I have my own source of income for my own spending. Do I have to add my income with my mom income to see if I’m eligible or only my mom. I started my own business and I make 1.5k a month doing nothing. Would college found out I make that much money.
No way to answer your question. It would depend on the college, how much you earned, and where your earnings are when you file your financial aid forms.
But colleges use prior prior year income on the FAFSA…so income earned in 2018 would be used on the 2020-2021 FAFSA. Income earned in 2019 would be used on the 2021-2022 FAFSA.
Any amount you have in the bank the day you file your financial aid forms would be considered assets.
But free advice…get a job. GET A JOB. From other threads, you are from a low income family. You are looking at some UCs. You will really benefit from having some spending money and money for books and the like. Plus, work experience is a good thing to have!
You will be required to report your income on FAFSA and CSS Profile. With your income at $18K/year, it will impact your financial aid as you will be required to pay a portion of your schooling.
I assume you are a high school senior?
You report your mom’s income in the parent financial section of the FAFSA, and your income in the student section.
Students have an income protection amount on the FAFSA before their income is counted towards FAFSA EFC. In the 2018/19 EFC formula it is $6,570 for dependent students, plus deductions for state, federal or social security taxes paid. The amount of the IPA usually goes up some every year.
If your mom received less than $49,999 in income and child support in 2017, and your family received a federal means tested benefit like food stamps or free/reduced lunch, or she was able to file a 1040A or EZ tax return, then parent and student assets (money in checking and savings) might be excluded with the FAFSA simplified needs test.
I don’t know if the 2019/20 FAFSA EFC formula has been released yet.
Whatever your income is, you have to honestly report it on your FAFSA when you apply for aid. Also you need to file a tax return to report the self employment income you earned.
You will probably owe some federal and self employment tax, maybe state tax.
For FAFSA purposes, you can make around $6,000/year before your income starts counting. Also, if you graduate in 4 years, nothing you make after January 1 of your sophomore year counts. Cash in your checking account will count against you on the day you file the FAFSA, so make sure you prepay everything you can and file the day before payday to keep your balance as low as possible.
Your income is reported separately from your mothers. You will be expected to contribute more of your income than your mother would be expected to contribute. If you make 1.5k a month, you have 18,000 of income and will have tax filing requirements. Yes, colleges with “find out” because you have to report that on FAFSA and your tax return, and it will be verified. Financial aid isn’t based only on your parents’ income. You will be expected to contribute 50% of your income above about $7,000 - so while you mother might have no family contribution, you can expect to contribute around $5,000. You will also be expected to spend a portion of your savings (more than if they were your mother’s savings). If you only recently started earning this money, you might benefit from recent changes to the aid formula, as your calculation will be based on 2017 earnings for the 2019-20 school year. However, aid is calculated each year so don’t expect the same financial aid every year.
Also being “automatically eligible” doesn’t mean you will automatically have all your need met. Automatic only applies to federal grants - and again, it’s based on your income as well as your mother’s.
OP, on your other thread you say you already make 1.5k a month from a business you started. Is that income going away?
If you already have other income, then yes your job will impact your financial aid. Why shouldn’t it? If you are earning money, you have to means to help pay for your education. You are working under the assumption that qualifying for aid means someone else will pay for everything - that’s not the case. Just because you have “more need” doesn’t automatically mean you will get more aid.
Get a job! even if your aid is reduced, you will still have more money in your pocket.
The aid you might lose because of income or savings is not dollar for dollar. Whatever you do have stashed in the bank or arriving in your next paycheck is going to make paying your college expenses a lot easier.
In one of your other threads you said you earn ~$18k/year from your business. The first $6k won’t be used to calculate your student contribution. I think that any income above that will be assessed at 20%. In your case, that’s 20% of $12k (the $18k income - the $6k allowance). So your expected contribution would be $2400.
If you get a job in school the amount you’re expected to contribute will depend on how much you earn. If you’re still earning $18k/year from your business then everything you earn from the part-time job will count too. The only thing I can think of that might make a difference is if it’s a Work Study job. @BelknapPoint might know if Work Study earnings are used to calculate the student contribution. In any case, please take seriously the advice in the other thread that colleges will find out about that $18k income if you don’t report it. Willfully underreporting your income is considered financial aid fraud. Creating a successful business on your own is a great accomplishment. Don’t spoil it.
If your mother’s income and assets are low enough to qualify you for automatic 0 EFC, then your earnings and assets won’t matter at all in the FAFSA formula. They will still matter if the places you apply to use the CSS Profile or their oen financial aid forms.
But please remember that a 0 EFC only results in the maximum Pell Grant of about $5000 to add to the maximum freshman loan of $5500. You will be glad to have your own income to help cover the rest of your college costs.
Federal work-study is a need-based employment program, and therefore work-study earnings are disregarded when calculating the student part of the contribution.
Also, student income that is assessed beyond the base amount that is excluded is assessed at a rate of 50%. Student assets are assessed at 20%.
It makes sense to use the FAFSA calculator posted here to see what the impact is.
One caveat to the above advice is to check what the financial aid package includes. At our State flagship, in state students who meet certain other criteria and who get ANY Pell Grant can also get a scholarship that essentially makes up the difference between Pell and full tuition. I know a school in a neighboring state that has a similar program. I’m not sure if this is common nationwide or not.
If you have that, you need to make sure that you don’t make too much to qualify for Pell. You can be in the situation where if you make one dollar too much then you lose Pell plus that other need based scholarship, which totals to full tuition. So you could lose $10.000 because you made $1 over the Pell limitation.
I know a student in this situation currently. He just barely qualifies for Pell. So he is being careful to not earn more than $6,000. If he earns enough to lose the Pell, he has to make $10,000 more (after taxes) just to get even. (The lost tuition). So he’s enjoying the last couple weeks of summer instead of working right now. He already has made as much as he can.
This may not apply to you. But it is an odd cliff situation in financial aid that some people need to be aware of.
@dadof4kids – is that right? isn’t a student’s income just a percentage of the pell grant award? So if he went over $6000 income, it would just be a percentage of that income that would adjust the pell grant? I dont think its “all or nothing” – but rather a sliding scale. it does sound like the student you know has worked hard. Just trying to understand this myself. . . can anyone clarify?
@bgbgbg I’m very familiar with the situation and have helped them with the forms and play with the income numbers. It’s right.
The situation is that the parents make enough to just barely qualifiy the student for Pell. So if the student has any extra income count against them, they lose the Pell.
The Pell loss is on a sliding scale. So not really that big a deal. Make an extra $2,000, lose $500 Pell (not exact, but you get the idea). Where it gets tricky is that additional scholarship/grant.
The additional grant makes up the difference between Pell and full tuition. So if tuition is $10,000 and Pell is $3000, additional grant is $7000. If Pell is $800, additional grant is $9,200. If Pell drops to zero, student isn’t eligible for additional grant so it goes to zero too. Basically the university has decided if you qualify for any Pell money then you are needy enough to get a full tuition Grant. But if you don’t qualify for Pell money, that Grant goes away completely.
Only applies if the family is right on the line. If dad made $10,000 less it wouldn’t matter, and if he made $10,000 more they wouldn’t qualify anyway.
In this situation the student has made his $6000 for the year already, so he stopped summer job a couple weeks early. Not 100% sure where dad’s income will end up, but it will be close so not worth the risk.
You are supposed to be HONEST when completing your financial aid applications. So if you earn $18,000 a year, this MUST be reported on the fafsa unless you qualify for auto $0 EFC or the simplified needs test.
But for Profile schools, your income will be required regardless!
What pays $1500/month for doing nothing?
Thank you so much everyone
@CTScoutmom thank you I just did the calculation. The fasfa amount just go down a little compare to the amount I will make.
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