How to Get Financial Aid When Parents Make Too Much

A common concern with federal college funding in the U.S. is the concept of being too poor to attend college but too rich to qualify for financial aid. This is one of the most significant and harmful myths in student aid today.

Even if your family earns a substantial income, you should still apply for federal financial aid because there isn’t a hard-and-fast income cutoff for qualification. We’ll explain how to get financial aid for college when you think your parents make too much money and how to pay for college if you don’t qualify for financial aid.

How your parents’ income affects your eligibility for federal aid

If you’re a dependent student, your parents’ income is factored into the financial resources you have at your disposal to pay for school. If you’re an independent student, your parents’ income isn’t considered, but your spouse’s income might be if you’re married.

You won’t know how your parents’ income affects your financial aid eligibility until you complete the Free Application for Federal Student Aid (FAFSA). This application gathers information about your family’s financial situation and uses it to calculate your Student Aid Index (SAI).

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Tip

You’re considered a dependent student if you’re pursuing an associate or bachelor’s degree, are under 24, are unmarried, are not in the military, and don’t have dependents of your own.

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The SAI is a new measure, introduced for the 2024 – 2025 school year, that replaces the Expected Family Contribution (EFC) of years past. 

Like the EFC, your individual SAI doesn’t indicate how much money you or your parents can put toward your education. Instead, it helps colleges gauge your financial aid eligibility and compare financial need among students.

To calculate the SAI for dependent students, the FAFSA uses this formula:

In addition to looking at your income and assets, the SAI formula also counts:

• Your parents’ available income: This includes earned wages and certain tax deductions, minus income taxes paid and cost-of-living adjustments.
• Your parents’ assets: This includes bank account balances, investments, and child support received. Only 12% of your parents’ net assets are used to determine your SAI. 

The greater your and your parents’ incomes and assets, the higher your SAI. The higher your SAI, the less outside help you need for school—theoretically, anyway.

But remember: A high income on paper doesn’t always mean a high SAI. The adjustments and allowances built into SAI calculations are proportional to your parents’ income and household size.

In other words, the FAFSA considers that only a portion of your family’s resources can be used to pay for college and adjusts your SAI accordingly.

What is the income cutoff for financial aid?

According to the Department of Education, there is no income cutoff to qualify for federal Unsubsidized student loans. 

However, your eligibility for the following need-based aid programs as a dependent student is based in part on your parents’ income after adjustments and allowances:

• Federal Pell Grants
• Federal Supplemental Educational Opportunity Grants (FSEOG)
• Direct Subsidized Loans
• Federal work-study

The more financial resources you have, the less likely you are to qualify for the above forms of federal aid. You won’t receive need-based aid that exceeds your actual financial need, no matter how much your parents make.

Even if you don’t qualify for need-based aid, the below non-need-based federal aid could still be on the table:

• Direct Unsubsidized Loans
• Direct PLUS Loans
• Iraq and Afghanistan Service Grants
• Teacher Education Access for College and Higher Education (TEACH) Grants

To determine how much of each aid type (need-based vs. non-need-based) you receive, colleges follow this process:

For example, if your total cost of attendance is $15,000, and you get $5,000 in need-based aid, you’d be eligible for the remaining $10,000 in non-need-based aid.

Can you qualify for financial aid if your parents make over $75,000?

You can still qualify for financial aid if your parents earn over $75,000. Income and assets alone aren’t considered without regard for family size and nondiscretionary expenses.

Your parents might make more than $75,000, for example, but they might also pay a hefty income tax bill, which would reduce their contributable income. Or perhaps you have four family members in your household, which entitles your parents to a $42,430 income protection allowance.

Those adjustments and allowances can bring what feels like a too-high-to-qualify income down to a manageable level. Not every penny your parents make can go toward your education, and the FAFSA accounts for that.

Can you qualify for financial aid if your parents make over $200,000?

Even if your parents earn over $200,000, you may still be able to qualify for federal financial aid.

As your parents’ income and the value of their assets increase, your eligibility for certain types of aid—Pell Grants or work study, for instance—may decrease. But that doesn’t mean you won’t get any federal aid at all.

Your COA, family size, and income tax liability each play a factor, not just the number of zeros on your parents’ paycheck. In short, a combination of your COA and your family’s resources, adjustments, and allowances ultimately determines your eligibility for financial aid.

How to get financial aid without your parents’ help

There are ways to get financial aid despite your parents being high earners. Here are six tips on how to pay for college if you don’t qualify for financial aid or you think your parents’ income might be an obstacle:

1. Fill out the FAFSA. Even if you think you won’t qualify for aid, don’t skip this step.
2. Appeal your financial aid decision.
3. Look for scholarships and grants.
4. Use non-need-based federal financial aid.
5. Consider private student loans.
6. Readjust, regroup, and adapt.

Let’s explore each potential solution in more detail.

1. Fill out the FAFSA

Should I complete the FAFSA if my parents are rich? It’s a legitimate question, and the answer is a resounding yes.

You should complete the FAFSA every academic year, wealthy parents or not. You might be surprised and find out you’re eligible for aid you didn’t think you could get.

Besides, you can always update your FAFSA should your financial situation change. For example, if you or a parent loses a job after submission, you can amend your FAFSA and get a modified SAI.

2. Appeal your financial aid

You can also appeal your financial aid decision and request that your college reconsider your financial aid package.

After submitting your FAFSA, your college will send you a financial aid award letter. This letter outlines the institutional scholarships, federal grants, and federal loans it’ll give you. The letter should also include appeal instructions if you think your initial aid is inadequate.

You’re not guaranteed to receive more aid after an appeal, but you could leave money on the table if you don’t.

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3. Look for scholarships and grants

Another option for obtaining financial aid for college when parents make too much is to consider scholarships and grant funding. A misconception about scholarships and grants is that these funds are only available to low earners, but that isn’t the case. 

While some scholarships and grants are need-based, others are awarded for academic achievement, community service, artistic or athletic ability, or pursuing a particular career. 

Deadlines vary, so get a head start by beginning to search for scholarships and grants at least a year before you plan to start school. Many major scholarship applications open up during the summer and early fall, so this period is crucial for researching and gathering all the necessary information.

A significant number of scholarships have deadlines in the fall, particularly between October and December. Make sure you have everything prepared well in advance for these deadlines, including letters of recommendation, essays, and transcripts.

4. Use non-need-based federal aid

You could still qualify for non-need-based aid, regardless of your income or SAI. Non-need-based aid includes the following types of federal student loans:

• Direct Unsubsidized Loans: Federal loan limits are based on the year of school the student is completing and the total cost of attendance. Although payment is not due on these loans until you leave school, interest accrues while loan payments are deferred.
• Direct PLUS Loans: Direct Grad PLUS Loans and Parent PLUS Loans work similarly to Direct Unsubsidized Loans in terms of deferment and interest accrual, but they have higher rates and no loan limits.

Federal student loans can be a viable way to cover the costs of college since they have low interest rates and favorable repayment terms. Keep in mind that while Direct Unsubsidized Loans don’t require a credit check, Direct PLUS Loans do.

5. Consider private student loans

Private student loans may be your next best option if you don’t qualify for federal financial aid or have exhausted federal and state funding options.

Private student loans are available from banks, credit unions, and online lenders. They usually require a strong credit history or a cosigner with one (but student loans without a cosigner are available).

Having a high-income parent act as a cosigner could work in your favor. If your cosigning parent has a steady income and good credit history, that could make it easier to get approved and secure lower interest rates.

Rates, repayment terms, and benefits vary, so compare rates and loan offers with multiple lenders before accepting a private student loan.

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6. Readjust, regroup, and adapt

Say you’ve explored your financial aid options and haven’t found realistic solutions. In that case, it may be time to think outside the box.

If you’re not set on one particular school, consider one with a lower COA. You might also look for schools in areas with a lower cost of living. You could also start your degree at a community college or take free or low-cost dual-enrollment courses through your high school.

If you’ve already started your program, you could transfer to a more affordable school or take a gap year to save up. Studying abroad in a country with lower tuition could also be an option.

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Tip

Try to get a paid internship or entry-level job in your field. You’ll earn money you can use for school, and you might also earn course credit. Your employer may even help cover some or all of your tuition.

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When it comes down to it, remember that your educational journey is exactly that: yours. You can likely qualify for aid even if your parents earn a high income, but even if you don’t, you aren’t out of options. Weigh each one, adjust as you go, and know it’s all part of the process.