Will I Get Financial Aid If My Parents Make Over 100k?

Many families worry that a parental income exceeding $100,000 might automatically disqualify a student from college financial aid. However, this is a misconception, as eligibility extends beyond just a family’s income. Many factors influence whether a student qualifies for aid, and numerous opportunities remain available for families with higher incomes.

Understanding Financial Need: More Than Just Income

Financial need is determined by the difference between a college’s Cost of Attendance (COA) and a student’s Student Aid Index (SAI). The COA encompasses various expenses, including tuition, fees, room, board, books, supplies, transportation, and personal costs, and it can vary significantly among different institutions. A higher COA at a particular college can increase a student’s financial need, even if their family has a substantial income.

The Student Aid Index (SAI), which replaced the Expected Family Contribution (EFC) for the 2024-2025 award year, is an index number calculated by a formula established by Congress. This index represents how much a student and their family are expected to contribute towards college expenses. While parental income is a primary consideration in the SAI calculation, other significant factors also play a role. These include the family’s size, with more dependents potentially lowering the SAI, and the number of family members simultaneously enrolled in college, which can significantly reduce the SAI per student. Additionally, parental assets and student income and assets are considered in this calculation.

Key Components of Your Student Aid Index (SAI) Calculation

The SAI calculation assesses parental income by considering taxable income, typically from tax returns, and untaxed income sources. Untaxed income includes child support received, tax-exempt interest, and certain veterans’ non-education benefits. Allowances are provided for federal, state, and local taxes paid, as well as for basic living expenses, reducing the portion of income available for college costs.

Parental assets are also factored into the SAI, including savings and checking accounts, and investments such as stocks, bonds, mutual funds, and 529 plans. However, certain assets are excluded from this calculation. These exclusions generally include primary home equity, retirement accounts like 401(k)s and IRAs, and small business equity if it has 100 or fewer full-time employees and the family owns more than 50%.

An asset protection allowance also shields a portion of parental assets, varying based on the older parent’s age. Student income and assets are assessed at a higher rate than parental contributions.

The SAI is not a direct bill for college expenses but rather an index used by colleges to determine financial aid eligibility. For institutional aid, some colleges may use different methodologies, such as the CSS Profile, which might consider home equity or other assets differently than the federal methodology. Some CSS Profile schools may include home equity as a parental asset, while others might cap the amount considered or exclude it entirely.

Exploring Diverse Financial Aid Opportunities

Financial aid encompasses various forms beyond need-based grants, offering opportunities even for families with higher incomes. Federal student aid includes federal grants, such as the Pell Grant, which are primarily need-based and less common for families with incomes over $100,000. However, federal student loans, specifically Direct Unsubsidized Loans, are not need-based and are available to most students regardless of parental income. Parent PLUS Loans and Grad PLUS Loans are additional federal options for parents or graduate students, also not need-based but requiring a credit check.

Colleges provide their own institutional aid, which can be both need-based, often supplementing federal aid, and merit-based. Merit-based scholarships from colleges are particularly relevant for students from higher-income families, as they are awarded for academic achievement, talent in areas like arts or athletics, or leadership, without regard to financial need. These scholarships can significantly reduce the overall cost of attendance.

Additionally, private scholarships from external organizations, such as foundations, corporations, and community groups, are another valuable resource. Many of these are also merit-based or are awarded based on specific criteria like field of study or volunteer work, rather than financial need. Private student loans, offered by banks and credit unions, are typically considered a last resort, usually requiring a creditworthy co-signer and generally having less favorable terms compared to federal loans.

Preparing Your Financial Aid Applications

The Free Application for Federal Student Aid (FAFSA) is the primary form for federal student aid and is often required for state and institutional aid. To complete the FAFSA, you will need:
Your FSA ID
Social Security Numbers for the student and parents
Federal income tax returns from the “prior-prior year” (e.g., for the 2025-26 FAFSA, 2023 tax information is used)
Records of untaxed income, such as child support received or veterans’ non-education benefits
Current balances of cash, savings, and checking accounts
Records of investments like stocks, bonds, mutual funds, and 529 plans
Information on business and farm assets, if applicable

For some private colleges and universities, the College Scholarship Service (CSS) Profile is also required to determine eligibility for their institutional aid. The CSS Profile generally requests more detailed financial information than the FAFSA, potentially including home equity, non-custodial parent information, and business valuations for small businesses. Additional documents often needed for the CSS Profile include business tax returns, details about home equity value, and financial information for a non-custodial parent, if applicable.

Submitting Your Financial Aid Applications and Next Steps

Submit your financial aid applications through the official FAFSA website, ensuring you meet all applicable deadlines for federal, state, and institutional aid. After submission, you will receive a FAFSA Submission Summary, which provides an overview of the information you entered, your Student Aid Index (SAI), and estimated federal Pell Grant eligibility. Reviewing this summary carefully for accuracy is an important next step.

For the CSS Profile, access the application through the College Board’s website. After colleges receive your FAFSA and CSS Profile, if applicable, they may select your application for verification, requiring additional documents to confirm the information provided. Colleges will then send financial aid offer letters detailing the types and amounts of aid you may receive.

Compare these offers carefully from each institution to understand the net cost of attendance. If your family’s financial situation has changed significantly since you filed your application, such as due to job loss, a reduction in income, or high unreimbursed medical expenses, you may be able to appeal a financial aid decision directly with the college’s financial aid office.