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The 2024-25 FAFSA® (Free Application for Federal Student Aid) will be available in December 2023.


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  • Make sure to report all income for both parents, as well as the student applying, on the FAFSA.
  • Income information helps schools calculate what your family can reasonably contribute toward your student’s college education.
  • Some simple tips, like filing the FAFSA early, can increase the amount of aid your family receives.

The Free Application for Federal Student Aid (FAFSA) asks for a lot of financial information from parents, including details about your income. This may have you wondering if there are ways to reduce your income to help increase your child’s financial aid eligibility. Before making any decisions, learn more information about how income is reported on the FAFSA and if actions you take to increase student aid this year could actually lower it next year.


Whose income is reported on the FAFSA?

Your child’s dependency status determines what income information is needed for the FAFSA. Dependent students report both their financial information and their parents’ when completing the FAFSA. Independent students report their own financial information, including a spouse and any dependents.

The FAFSA asks about income as well as assets. Below is a list of what you’ll need to include on the FAFSA:

  • Student and parent income. Use the information from your Form W-2s.
  • Available cash, including balances in savings and checking accounts, and any investment portfolios.
  • All real estate holdings other than the house you live in must be listed, as well as any business or farm assets.
  • Untaxed income, such as child support received, interest income, and any non-education veterans’ benefits.

Is there an income cap for federal student aid?

There are no income requirements or cap to the amount of money you can earn to qualify for federal student aid. Many factors go into the financial aid equation, such as the number of children in college and the parents’ age.

What does the income determine on the FAFSA?

Schools use income information to calculate what your family can reasonably contribute toward your student’s college education. This number is known as the Student Aid Index (SAI) and schools use it to determine your child’s eligibility for financial aid. The calculation is based on a formula established by law. The formula considers many factors including, but not limited to, household size and a family's income and assets.

Does available cash reduce the amount of student aid we might receive?

Available cash counts toward your ability to pay for college and will be factored into the SAI, which can reduce the amount of federal student aid you receive.

Tips for filling out the FAFSA

1. File the FAFSA ASAP

There are lots of deadlines for filing the FAFSA: the federal deadline, the deadline for any aid offered by the state you live in, and deadlines for the schools your child is applying to. Filing as close to October 1 as you can ensures you won’t miss any deadlines for financial aid. But that’s not the only reason to apply early. Lots of scholarships and grants are given out on a first-come, first-served basis, which means that even if your student qualifies, they won’t be eligible once all the money has been allocated.

2. Look out for typos

Typos and incorrect information can disqualify your student from the FAFSA. Before filing, make sure to double-check everything on the form, including making sure you’ve reported all income and that you’ve correctly reported your child’s dependency status.

3. List all the colleges your child plans to apply to

As schools use the FAFSA to determine what aid they’ll give out, it’s vital that you include any schools your child is considering applying to, up to ten. You can add more schools after you’ve submitted the FAFSA. If you don’t, you’ll likely miss out on some important aid.

About the Author

Jodi Okun is founder and president of College Financial Aid Advisors. She has been featured in The Wall Street Journal, Mashable, US News & Education, and The Huffington Post. The opinions expressed in this article are Jodi’s and do not necessarily reflect the opinions of Discover® Student Loans.

Discover Student Loans encourages you to consult a financial planner before making financial transactions. You should also consult a tax professional for tax advice.

FAFSA® is a registered trademark of the US Department of Education and is not affiliated with Discover Student Loans.

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