FAFSA for 2023: Income limits, types of aid, and more

One of the biggest myths about financial aid is that you shouldn’t apply if your family makes a lot of money. But the reality is that there is no income limit with the Free Application for Federal Student Aid (FAFSA); Any eligible student can fill out the FAFSA to see if they qualify for aid.

While some aid is based on financial need (such as subsidized loans and Pell grants), other aid is not (such as unsubsidized federal loans). Now that you know there is no maximum income to qualify for financial aid, read on to learn what types of aid are available.

What Kinds of Federal Student Aid Are Available?

While there is no overall FAFSA income limit, the type of aid you are eligible for and whether you qualify for need-based financial aid will depend on your family’s finances.

even if you You don’t think you deserve need-based assistanceHowever, it makes sense to fill out the FAFSA to see if you can get non-need-based aid. You must complete a FAFSA each year to continue receiving federal student aid.

Below are the types of federal financial aid you can receive as a result of filling out the FAFSA:

federal pell grants

Federal Pell Grants are money for school that usually doesn’t have to be repaid. The amount you receive depends on your financial need and the cost of attendance at your school. The Pell Grant amount changes annually. For 2022-2023, the maximum federal Pell Grant award was $6,895.

Pell Grants are only available to undergraduates, and you can only get them for 12 semesters. Learn more about your eligibility through our guide pell grant requirements,

Federal Supplemental Educational Opportunity Grant (FSEOG)

Undergraduates with “exceptional financial need” may qualify for between $100 and $4,000 per year. While the government provides enough Pell grant money for each participating school to cover all of its eligible students, this may not be the case for FSEOG.

check for other college grantsFor future teachers or children of fallen US service members, read on to see which ones you may qualify for.

federal work-study program

participating schools work study program Providing government funded part time jobs for deserving students with financial need. These programs are available to undergraduate and graduate students alike. In many cases, the work you do is related to your course of study or involves community service.

You can expect to earn at least the federal minimum wage. However, at times you may be paid more, depending on the skills required for the job as well as the funding available at the school.

direct subsidized loan

If you are an undergraduate with financial need, and the grant is not covering the cost of school, a federal subsidized loan can help bridge the gap. The government pays the interest on the directly subsidized loan while you attend school – as long as you are enrolled at least half-time – and during your student loan grace periodThis usually lasts for six months after you leave school.

Yours The interest rate depends on the rate set by Congress. for the school year. Rates are reviewed annually, and each new school year will result in a new subsidized loan as long as you continue to qualify.

rates for federal student loans (2022-23) fixed variables
federal* inferior 4.99% Not Applicable
graduate 6.54% Not Applicable
plus(grade, parent) 7.54% Not Applicable
*Note that federal loans typically have an origination fee.

direct unsubsidized loan

This financial aid program is not based solely on economic need. You can get an unsubsidized loan for any amount for the year maximum student loan amount or your school’s cost of attendance (whichever is less), whether you are an undergraduate or graduate student.

When you borrow using this program, the government won’t pay any of your interest, so if you don’t make an interest payment while you’re in school, it will accumulate and be added to your loan amount.

Direct Plus Loan

Undergraduate or professional students can take out these loans, as can parents of graduate students. The interest is non-subsidised, so the borrower is responsible for the total cost of the loan. interest rates on plus loan There are more than directly subsidized and non-subsidized loans.

The maximum amount you can borrow in a PLUS loan is based on the cost of attendance at the school, less any other financial aid you may receive. For other Direct loans, plan for your credit limit,

Finding Your Financial Need With the FAFSA

The purpose of the FAFSA is to help schools determine your level of financial need. That’s right: The school determines what type of federal financial aid package you’ll get.

How much you need is decided by comparing your expected family contribution (EFC) with the cost of attendance at your school. Here’s what you should know about it along with some other important points:

Expected Family Contribution (EFC)

The EFC is calculated using a formula that is set by law. financial aid office Colleges use the information you include on your FAFSA to determine how much your family can be expected to pay to cover the expenses of your education.

affects your EFC Doesn’t affect your EFC
● Your family’s income (tax-exempt and non-taxable) and current assets (including 529 College Savings Plans if the account owner is a student or parent)
● Any benefits you or your family receive (such as Social Security and unemployment insurance).
● Your family size
● Number of your siblings attend college during the school year
● Financial aid (grants, scholarships, and loans) you’ve already received for college
● 529 College Savings Plan assets, if account owner is a grandparent or other relative
● 529 College Savings Plan Withdrawals, If You Withdraw Funds Before Filing the FAFSA

Although there is no FAFSA income limit or maximum income to qualify for financial aid, there is an income limit to receive a zero-dollar EFC. For the 2022-23 cycle, if you are a dependent student and your household combined income is $49,999 or less, your expected contribution to college costs will automatically be zero. The same goes if you (as an independent student) and your spouse do not earn more than $49,999 a year.

Once your EFC is determined, it is deducted from your school’s cost of attendance.

cost of attendance

When you fill out your FAFSA, you specify which schools you want the information sent to. Each school has its own cost of attendance based on what you will pay to attend the school for two semesters.

However, in some cases, you can earn a certification instead of a degree. Such a program can last for a different amount of time. Pay attention to the covered period Understand Your Financial Aid Award Better.

cost of attendance The estimate includes tuition and fees as well as room and board. This also includes what you can expect to pay reasonably well for books, supplies, loan fees, eligible study abroad programs, and transportation. Finally, the estimate may also include an allowance for child care and disability costs.

Need-Based and Non-Need-Based Financial Aid

Once the school receives your FAFSA, it can create an aid package. You may be offered a combination of Need-Based and Non-Need-Based Options,

For example, your cost of attendance is $18,000 for the year and the EFC formula indicates that your household should be responsible for $14,000 of that amount. Your need-based assistance will be up to a maximum of $4,000. This may be offered to you in the form of grants, concessional loans or work-study programs.

Of course, you may run into a problem if your Parents Can’t Afford Your EFC,

This is where non-need-based assistance comes in handy. You may be offered an unsubsidized loan outright, and your parent may also need to take out a PLUS loan. Your EFC does not determine your non-need-based assistance. Instead, it looks at your cost of attendance and subtracts all other aid you have, including need-based aid, merit-based scholarships received from school or private sources, and all other sources of aid.

Say for example, your cost of attendance is $18,000 and you receive $4,000 in need-based assistance. If you also receive a $6,000 merit-based scholarship, your non-need-based total is $8,000.

You may be offered a combination of non-need-based assistance up to that amount. If you don’t get enough financial aid to fill the gap, you may also consider Borrowing a Private Student Loan,

each year, you should Fill out the FAFSA To determine your financial aid eligibility, as it may change. For example, if your younger sibling follows in your footsteps, for example, you may find yourself eligible for additional need-based assistance.

Filling out the FAFSA to Receive Financial Aid

Go to the website of the Department of Education Start Your FAFSA Application, You will need to have the following ready when you are done with the process:

  • Social Security number and, if applicable, alien registration number
  • financial account statement
  • federal income tax returns, W-2s and other records of money earned

Be aware that you may be able to obtain your (parent’s) tax documents through the IRS Data Retrieval Tool available on the FAFSA form.

While you do not need a Federal Student Aid ID (FSA ID) to fill out the FAFSA, it may be a good idea to have one. FSA ID, Your application can be easier to find once it’s started, as well as access other information about financial aid throughout your college career. You can quickly access your student aid reports, as well as keep track of your direct loan servicers.

Special Matters Affecting Federal Financial Aid Eligibility
criminal conviction Imprisonment would restrict access to most federal financial aid.
disability In addition to specific federal grants, you can also apply for medical based financial aid
non citizen If You Have a Green Card, You Can Be Considered a FAFSA- Eligible Noncitizens
Parents killed in military action In addition to a Pell Grant, you may also qualify for a Iraq and Afghanistan Service Grant
Source: Federal Student Aid

If you have your information together, it is possible to complete your application in 30 minutes or less. Plus, you can fill out the 2023-24 FAFSA form on your phone Through the MyStudentAid App,

you can also use FAFSA4caster Tool To estimate your potential financial aid even before you start your application, so you can get an idea of ​​where you stand.

FAFSA applications open annually on October 1 for the next school year. Apply early as some money is given on a first come first serve basis. The sooner you apply, the better your chances of getting the help the school needs.

Finally, the FAFSA can be a great help when you look for money to pay for college. This is a good starting point to see what financial aid you qualify for. So Keep in Mind the FAFSA Deadline as you approach the next school year, and see FAFSA Guide for more information.

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