Getting Financial Aid When Your Parents Make Too Much

By Jody McMaster · August 01, 2023 · 5 minute read

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Getting Financial Aid When Your Parents Make Too Much

Many college-bound students with high-earning parents may suspect that they don’t qualify for federal financial aid when they actually might.

Some may focus on need-based aid and not know that non-need-based aid exists.

And some students who face a crevasse between costs and means may not realize that options exist to bridge that gap.

It All Starts With the FAFSA®

The world of college financial aid needn’t be mysterious.

It’s widely recommended that anyone who wants a shot at help with college expenses fill out the Free Application for Federal Student Aid—commonly known as the FAFSA®—because it’s the gateway to not only federal student aid programs but state aid programs and, in many cases, college-based aid.

There’s no income cutoff for federal student aid. Eligibility is based on a number of factors.

Who Determines Aid Amount and Type?

The financial aid office at the college or career school will determine how much financial aid you, the student, are eligible to receive.

1.   The first factor considered is the cost of attendance (COA), or what it costs a typical student to attend a particular college or university for one academic year. Cost of attendance includes tuition and fees, sure, but also books, lodging, food, transportation, loan fees, personal expenses, and eligible study-abroad programs.

2.   Then the school considers your Student Aid Index number (SAI). The formula includes your family’s taxed and untaxed income, assets, and benefits such as Social Security.

3.   To determine how much need-based aid you can get, the school will subtract your SAI from the COA. Need-based aid includes Pell Grants, Direct Subsidized Loans, and federal work-study.

4.   To determine how much non-need-based aid you qualify for, the school takes the COA and subtracts any financial aid you’ve already been awarded. Federal non-need-based aid consists of Direct Unsubsidized Loans, Direct PLUS Loans, and TEACH Grants.

One big difference between subsidized and unsubsidized loans is when interest accrual starts. Because subsidized loans are need-based, the government covers any interest that accrues until loan repayment starts. With unsubsidized loans, the interest starts to accrue from day one.

Want to estimate your eligibility for federal student aid? The FAFSA4caster does that.

Recommended: Subsidized vs. Unsubsidized Loans: What’s the Difference?

What Are Rules on Dependency, Divorce?

A student’s dependency status makes a big difference, clearly, on the SAI for FAFSA purposes.

Not living with parents or being claimed on their taxes does not an independent make. To be considered independent for federal financial aid, a student must be 24 or older, a veteran, an orphan, or married, or meet a handful of other criteria.

Currently, if a dependent student’s parents do not live together and are divorced or separated, or they never married, just one parent is responsible for completing the FAFSA. That will be the parent with whom the student lived for most of the 12 months before the FAFSA was filed.

Other Routes to Meeting All Needs

The government isn’t the only path to money for school. Here are several options.


The best thing about scholarships? You don’t need to pay them back. The second best thing is that they’re most often based on merit, not need.

So even if your parents make a “richest” list, you may still be eligible. While many are awarded solely on academics, others are given for athletic talent, specific interests, and lineage.

Patience, effort, and timing come into play to land merit aid for college. There’s a lot of scholarship money out there—billions each year.

Recommended: Find Scholarships and Grants in Your State”

An Appeal of Your SAI

If your financial aid offer is less than you can afford, you are within your rights to appeal to the school’s financial aid director.

You might want to be prepared to back up your request with detailed information such as your SAI, the amount you’ll need to successfully attend school, or circumstances that affect your family’s actual ability to pay, such as a parent’s job loss.

Parent Loans

A federal Direct PLUS Loan, commonly referred to as a parent PLUS Loan when made to a parent, is a fixed-rate loan offered by the federal government, but it’s based on parents’ creditworthiness rather than income. The rate for the 2023-2024 academic year is 8.05%.

Some private lenders also offer parent loans for college expenses. SoFi Parent Student Loans come with no fees and may have a fixed or variable rate.

Both kinds of loans can be used to cover any gaps left over after scholarships, grants, and other financial aid have been applied, up to the full cost of attendance.

Private Student Loans

Private student loans are available for helping to cover the costs of higher education, and they could be a good Plan B in either of these scenarios:

•  Your parents make too much to qualify for federal need-based aid.

•  There’s a gap between aid received and the cost of attendance.

Private student loans don’t have federal benefits like income-driven repayment plans, grace periods, and interest rates set by law, but you can apply for them at any time of the year, unlike federal student loans.

Private student loans can have either a fixed or variable interest rate, and the process is based on creditworthiness rather than need.

Recommended: Choosing between Fixed and Variable Rate Student Loans

The Takeaway

What happens if your parents make too much money to qualify for financial aid? You may have to shift course a little bit, but there are other ways to get help paying for all of the expenses of college.

A SoFi Private Student Loan may be able to bridge any gaps in your higher-education path. SoFi charges no loan origination or late payment fees, and offers flexible repayment plans to fit your budget.

Check your rate, and apply with a cosigner in minutes.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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