One of the most common reasons families skip FAFSA is the assumption that they "earn too much to qualify." This assumption costs families thousands of dollars every year. Here's the truth about income and financial aid eligibility.
No Official Income Cutoff for FAFSA
The federal government does not publish an income limit above which you are disqualified from all aid. Your eligibility depends on a formula that considers income, assets, family size, number of children in college, and other factors. A family earning $120,000 with three children in college simultaneously will have a very different Student Aid Index than a family earning $120,000 with one child.
Federal Pell Grants: Lower-Income Focus
The largest federal grant — the Pell Grant, worth up to $7,395 for 2024–2025 — is primarily available to families with incomes under $60,000. Above that threshold, Pell Grant eligibility phases out. But Pell is just one type of aid.
Institutional Grants Reach Further Up the Income Scale
Selective private universities with large endowments often provide need-based institutional grants to families earning $75,000–$200,000. Harvard, for example, limits tuition to 10% of family income for households earning up to $200,000. MIT and Princeton have similar programs. These grants require FAFSA (and often the CSS Profile) — you cannot receive them without filing.
What Every Family Qualifies for Regardless of Income
Any student whose college participates in federal aid programs can receive unsubsidized federal loans (up to $27,000 over four years for dependent students) regardless of income. These require FAFSA. Some institutional merit scholarships also require a FAFSA on file. The bottom line: there is no reason not to file.