Fill Out the FAFSA Even if Your Parents Earn a Lot

Your EFC may be lower than you think

Four young adults with books and backpacks walk together outside.

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With today's high cost of tuition for both state colleges and private universities, even students from higher-income families may feel financial strain.

Students with parents or guardians whose income is considered high may wonder if they should even bother filling out the Free Application for Federal Student Aid (FAFSA), the key form to apply for federal student aid. Even if you think your family's income may be too high to qualify for financial aid, it can still be beneficial to fill out the FAFSA.

Key Takeaways

  • While the FAFSA may disqualify children of high earners from grants, many families still benefit from subsidized and unsubsidized loans.
  • If you have siblings in college you may be more likely to qualify for financial aid, even if your parents are high earners.
  • Apply every year, since the calculations for receiving federal aid may have changed.

What Is the FAFSA?

The FAFSA, or Free Application for Federal Student Aid, is an application form college students fill out to apply for many types of financial aid. The FAFSA asks for information on a student's family assets as well as parent/guardian income and liabilities to produce a number called Expected Family Contribution (EFC).

The EFC is an estimate of what a typical family in specific financial circumstances could afford to contribute to a student’s college education. The EFC is then subtracted from the total Cost of Attendance (COA) at a particular school. The resulting number is considered the student’s “financial need."


Starting Jan. 1, 2022, the term “Student Aid Index (SAI)” will replace Expected Family Contribution (EFC). This is to underscore the fact that the system is an index for distributing funds, and not intended to reflect what a family can or can’t pay.

Scholarships and loans are intended to fill the gaps between the EFC and the costs of attending a college. According to Sallie Mae, scholarships and grants covered 26% of the college costs, and student and parent borrowing covered 18% of costs for academic year 2021-2022. 

Furthermore, among all the students and their families paying for college:

  • 60% used scholarships to pay for some portion of college costs
  • 55% used grants
  • 43% used borrowed funds

Access to Scholarship and Loan Opportunities

One of the main reasons to fill out the FAFSA the fact that it could unlock some financial aid beyond federal grants and aid that require you to demonstrate financial need. The FAFSA also opens doors to scholarship opportunities that are not necessarily based on financial need.

When you fill out the FAFSA, you’ll receive a Student Aid Report (SAR), which includes details that will be shared with any schools you share it with. They will use that report to help them create a financial aid package for you.

The FAFSA doesn’t just affect Federal Pell Grants, which offset costs for low- and middle- income students’ education. This form is also used in determining subsidized, lower-cost student loan eligibility, and some schools use the form to make choices about how to offer their own aid.

FAFSA Income Limits

Anyone can fill out the FAFSA, regardless of income. There's a simple equation that is used to determine how much financial aid you'll receive.

First, the financial aid staff at the school will calculate your cost of attendance (COA) and your expected family contribution (EFC). Your personal “financial need” for school is the COA minus the EFC. Your "financial need" is the amount of need-based aid you are eligible to receive.

For example, if your COA is $18,000 and your EFC is $12,000, your financial need would be $6,000. That means you would not be able to get more than $6,000 in need-based aid, although you would still be eligible for non-subsidized federal loans.

Your Parents’ Income

Dependent young adults should understand how their parents’ or guardians’ income affects their financial aid. Your parents’ or guardians’ income is generally considered a key factor in how much you can pay for school, even if they can’t actually contribute as much as the determined EFC.

If you are considered financially independent of your parents or guardians, their incomes, no matter how high, may not be considered in calculating your EFC.

The following situations could qualify you as financially independent of your parents’ or guardians’ income:

  • You are 24 years old or older.
  • You are married or separate but not divorced.
  • You are pursuing a non-bachelor’s degree such as a master’s degree or doctorate
  • You have dependent children.
  • You are active duty in the military or a veteran.
  • You have been in the foster care system since you turned 13.
  • You are an emancipated minor.
  • You are homeless.

These circumstances can be complex. Make sure you disclose all relevant and requested details.

Why You Should Apply Every Year

Applying for the FAFSA each year you have education expenses can benefit you because changes in your family’s income or assets can change what you’re offered. You can submit a renewal FAFSA, which allows you to simply update pre-filled information from a previous form.

You can also benefit if there are changes to the calculations for federal aid. For example, calculation changes could mean you qualify for a slightly larger subsidized loan.

What You’ll Need To Apply

You can submit the FAFSA online. First, gather your personal information, including your:

  • Social Security Number (or Alien Registration Number)
  • Family income tax returns
  • Bank statements and records of investments
  • Records of any untaxed income
  • FSA ID to sign electronically 

You’ll input this information data into the form. Your EFC and financial need will be calculated automatically.


You can add up to 10 colleges on a FAFSA. Once they receive your information and have evaluated your college application, they can create a personalized financial aid package for you that will include any federal aid you qualify to receive. You can compare the packages as part of your decision about where to attend.

How To Appeal Your EFC

You might be able to appeal your EFC in some cases. If, for example, you’ve had a major change in your dependency status or your family’s financial situation since your EFC was calculated, you can write an appeal letter to your school, explaining the situation.

Most appeals will be sent through your school’s financial aid office. Make sure to follow any rules or guidelines they set for the appeals process.

Frequently Asked Questions (FAQs)

When is the FAFSA due?

The last date you can fill out the FAFSA for aid for the 2022-2023 school year is June 30, 2023. Be aware, however, that most schools have their own deadlines. The application becomes available in October, so you can start quite early. States may have their own deadline for FAFSA submission if you want to be eligible for state-based aid.

How long does the FAFSA take to process?

Most online FAFSA applications are processed within three to five days, and paper FAFSA forms are processed between seven and 10 days after they are mailed. If you’re concerned that your school didn’t receive your FAFSA information, contact your school’s financial aid office to confirm receipt.

Who should not fill out the FAFSA?

If there is no chance of you using any loans and your family has so much money that they can easily pay the full cost of your education, you may not want to spend time filling out the FAFSA. However, even for students from relatively high-income families, filling out the FAFSA may allow them to take out subsidized loans or receive some form of financial aid.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. The U.S. Senate. “FAFSA Simplification Act of 2020 Section by Section."

  2. Sallie Mae. "How America Pays for College 2022."

  3. "Dependency Status."

  4. U.S. Department of Education. "FAFSA Deadlines."

  5. U.S. Department of Student Aid. "How Do I Know if My FAFSA Form Has Been Processed?"

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