right arrow
GUEST STUDENT OF THE WEEK: AMALehigh is a rising sophomore at Lehigh University, majoring in Finance. He answers questions about academics, networking, finance, Greek life, or Lehigh in general. ASK HIM ANYTHING!
Make sure to check out our July Checklists for HS Juniors and HS Seniors. Consult these quick resources to get you started on the process this month.
As we work to adjust to the current reality, make sure to check out these dedicated COVID-19 resources: our directory of virtual campus tours, our directory of extended deadlines, as well as the list of schools going test optional this fall.

How will student income affect financial aid?

AphromoAphromo 10 replies6 threads Junior Member
I am more than blessed to be attending a college that will offered an unbelievable amount of student aid. My efc is 0, and I am only expected to pay a small amount this year, which my college believes I will be able to earn myself by working in campus, therefore not needing to take out loans.
I recently got a summer job, and by the looks of it I will have the total amount of money I'll need to pay for my tuition and will have a 'considerable' amount left over. This along with the fact that I want to begin using some of that extra income in various investments is starting to worry me. Is there a limit to the amount of money I should earn this year in order to not negatively affect the financial aid being offered by my school? I just don't want to end up with 15k savings this summer just to see that my tuition for sophomore year has been lowered by 20 thousand dollars.
6 replies
· Reply · Share

Replies to: How will student income affect financial aid?

  • BelknapPointBelknapPoint 4953 replies19 threads Senior Member
    edited June 24
    I am more than blessed to be attending a college that will offered an unbelievable amount of student aid. My efc is 0, and I am only expected to pay a small amount this year, which my college believes I will be able to earn myself by working in campus, therefore not needing to take out loans.
    I recently got a summer job, and by the looks of it I will have the total amount of money I'll need to pay for my tuition and will have a 'considerable' amount left over. This along with the fact that I want to begin using some of that extra income in various investments is starting to worry me.

    If you will have a "considerable" amount of your earned income left over after paying your expected share of the coming year's education expenses, than you might consider that the best short-term investment you can make is in your own education. It's nice for you that you are getting such great need-based aid calculated using past earning and asset numbers, but if those numbers increase going forward, it's reasonable to think that any need-based aid received may decrease. That's the "need" part of need-based aid.

    Is there a limit to the amount of money I should earn this year in order to not negatively affect the financial aid being offered by my school? I just don't want to end up with 15k savings this summer just to see that my tuition for sophomore year has been lowered by 20 thousand dollars.

    Need-based financial aid should never decrease by an amount equal to or more than the amount of any additional student income. Not even close. At a certain point, some of the money earned by a student receiving need-based aid will be expected to be used to help pay education expenses, which is only fair, right?
    edited June 24
    · Reply · Share
  • cptofthehousecptofthehouse 30394 replies59 threads Senior Member
    Financial Aid starts with FAFSA if you are an American citizen or have a green card. The Expected Family Contributed (EFC) is calculated using income in the year two years before the start of the affected school year. So your EFC for the school year starting fall of 2020 used 2018 income earned by your parents and you.

    Money you earn in 2020 could affect your FAFSA EFC for the school year starting in 2022. The current FAFSA formula uses 1/2 of student income over $6840 towards EFC with. certain exceptions such as work study income. Also there is a provision for an Automatic zero EFC if parents earn below a certain amount and the student or family was eligible for certain government aid. Otherwise assets held by the students are assessed 20% of the amount on the day FAFSA Is filed towards EFC. So any assets held by you on the day you file next years FAFSA and the year after will affect each corresponding FAFSA EFC.

    However, it is extremely doubtful that your school uses FAFSA only in determine your financial aid package. Most schools that give out need packages described by you, will use another financial aid calculator after determining your FAFSA EFC to get whatever government aid for you. Usually that is PROFILE, though additional questions from the school itself can also be in the picture. How each school will determine financial aid is entirely up to the school. You have to talk to your financial officer at your college and ask that question because none of us will know that formula.

    You can google 2020 FAFSA formula and do the math yourself, inputting Expected amounts of income and reading the rules for simplified needs and Automatic zero. It’s not likely you will find your college’s formula financial aid anywhere, so you need to talk to Financial Aid for that.

    · Reply · Share
  • kelsmomkelsmom 16075 replies99 threads Senior Member
    Are you at UMich?
    · Reply · Share
  • AphromoAphromo 10 replies6 threads Junior Member
    edited June 24
    No, I am not. I'm attending a Nescac school.
    kelsmom wrote: »
    Are you at UMich?

    edited June 24
    · Reply · Share
  • AphromoAphromo 10 replies6 threads Junior Member
    edited June 24
    Yea I agree with you. Wasn't my intention to come off as argumentative towards the system haha. Just wondering if making money this summer would compromise my financial aid.
    I am more than blessed to be attending a college that will offered an unbelievable amount of student aid. My efc is 0, and I am only expected to pay a small amount this year, which my college believes I will be able to earn myself by working in campus, therefore not needing to take out loans.
    I recently got a summer job, and by the looks of it I will have the total amount of money I'll need to pay for my tuition and will have a 'considerable' amount left over. This along with the fact that I want to begin using some of that extra income in various investments is starting to worry me.

    If you will have a "considerable" amount of your earned income left over after paying your expected share of the coming year's education expenses, than you might consider that the best short-term investment you can make is in your own education. It's nice for you that you are getting such great need-based aid calculated using past earning and asset numbers, but if those numbers increase going forward, it's reasonable to think that any need-based aid received may decrease. That's the "need" part of need-based aid.

    Is there a limit to the amount of money I should earn this year in order to not negatively affect the financial aid being offered by my school? I just don't want to end up with 15k savings this summer just to see that my tuition for sophomore year has been lowered by 20 thousand dollars.

    Need-based financial aid should never decrease by an amount equal to or more than the amount of any additional student income. Not even close. At a certain point, some of the money earned by a student receiving need-based aid will be expected to be used to help pay education expenses, which is only fair, right?

    edited June 24
    · Reply · Share
  • kelsmomkelsmom 16075 replies99 threads Senior Member
    Okay - you had posted about UM in the past, which is why I asked. I would have been able to answer about UM!
    · Reply · Share
Sign In or Register to comment.

Recent Activity