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With the average annual cost of college now $36,435, figuring out how to pay for college as a low-income student can be daunting. It’s important to keep in mind, however, that students from low-income backgrounds often qualify for grants and scholarships (which you don’t have to pay back), as well as student loans.

Federal student loans are available to all college students, regardless of income, and don’t require a credit check. If you still have gaps in funding after tapping financial aid and federal loans, you may also be able to qualify for private student loans, even with a low income.

Read on to learn more about the financial aid options available to you if you qualify as a low-income student and how to apply for student loans.

What Are Student Loans?

Student loans are an often-used option to help pay for college. In fact, nearly 52% of students who complete their undergraduate programs take out federal loans at some point during their college years, according to the Education Data Initiative.

Student loans can be used to pay for tuition, room and board, and other fees, as well as other associated costs of college like books and rent.

Students can use either federal or private student loans to pay for college. Students who take out federal student loans borrow money from the government, through the U.S. Department of Education. Federal student loans typically offer low, fixed interest rates and other benefits, such as income-driven repayment plans and access to forgiveness programs.

Private student loans, by contrast, are available from banks, credit unions, and other private lenders. These lenders set their own interest rates and conditions for their student loans. To qualify for a private student loan, you need to fill out an application and disclose personal financial information, such as your income and credit score.

Since students typically don’t have well-established credit histories, many private student loans require a cosigner. A cosigner is someone who agrees to pay back the loan if the primary borrower is unable to do so. Because private student loans don’t offer the same borrower protections that come with federal student loans, you generally only want to consider them after you’ve depleted all of your federal student aid options.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

Can You Get Student Loans With a Low Income?

Yes, you can get student loans if you have a low income. If you can’t cover the full cost of college with scholarships and grants, student loans can help you take care of the remaining costs of college.

You can access federal student loans no matter your income level, but you do need to meet specific qualifications. You must:

•   Have a high school diploma or a recognized equivalency, such as a GED, or have completed a state-approved home-school high school education.

•   Be a U.S. citizen or an eligible noncitizen

•   Have a valid Social Security Number

•   Be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program

•   Maintain satisfactory academic progress in college

You may also be able to qualify for some private student loans if you have a low income (more on that below).

Recommended: Finding Free Money for College

Low-Income Financial Aid Options

Students and their families pay for college in a variety of ways, including savings, scholarships, grants, work-study, and student loans. Indeed, paying for college often looks like a puzzle — all the pieces fit together in different ways to make everything “fit.”

Here’s a look at how to access low-income student aid options.

FAFSA

Every student (whether they’re low-income students or not) can file the Free Application for Federal Student Aid (FAFSA). The FAFSA is the free form you can fill out to apply for financial aid for undergraduate or graduate school, and is one of the most important steps students and their families can take to pay for college.

In conjunction with the school you plan to attend, the FAFSA determines your eligibility for need-based and non-need-based financial aid. The FAFSA results determine the amounts you receive for federal grants, scholarships, work-study, and/or federal student loans. In addition to subsidized federal student loan (which are need-based) and unsubsidized federal student loans (which are not need-based), there are two other types of federal aid low-income students may qualify for based on the FAFSA:

•   Federal grants Students who demonstrate financial need may qualify for federal grants, which you do not need to pay back. Some examples of federal grants include Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Iraq and Afghanistan Service Grants, and Teacher Education Assistance for College and Higher Education (TEACH) Grants. Each grant has its own eligibility requirements. Some, like the TEACH Grant, even have requirements you must fulfill after you attend school. Look at each grant’s eligibility requirements to determine whether you qualify.

•   Work-study Colleges and universities offer part-time work-study opportunities through the Federal Work-Study program. Graduate and undergraduate students who demonstrate financial need can get it whether they are part- or full-time students, as long as your school participates in the Federal Work-Study Program.

How Do You File the FAFSA?

Typically, the FAFSA becomes available on October 1 for the following academic year. The 2024-2025 academic year, however, is an exception. Due to upcoming changes to the FAFSA (and some adjustments to how student aid will be calculated), the application will be available some time in December 2023.

Since some aid is distributed on a first-come, first-served basis, it’s a good idea to complete the FAFSA as soon after its release as possible. Here’s how:

1.    Create your Federal Student Aid ID, also called an FSA ID. You can do this in advance of getting your materials ready and filing the FAFSA.

2.    Make a list of schools you’d like to attend. You can add up to 20 schools on the 2024-2025 FAFSA.

3.    Gather financial documents you’ll need. You’ll need information for both yourself and your parents, such as your Social Security numbers, Alien Registration numbers (if you’re not a U.S. citizen), most recent federal income tax return, W-2s, details of any untaxed income you’ve received, current bank statements, records of any investments you have.

4.    Complete the FAFSA. Using your FSA ID, log in to the website, read the directions, and submit your information.

5.    Review your FAFSA Submission Summary to make sure your information looks correct. The FAFSA Submission Summary, formerly known as the Student Aid Report (SAR), is a document that summarizes the information you provided when filling out the FAFSA. It includes your Student Aid Index (SAI), previously called Expected Family Contribution (EFC). Colleges and universities receive your SAI to determine your eligibility for federal and nonfederal student aid.

Federal Pell Grant

Your SAI will determine your eligibility for a Federal Pell Grant, so you have to file the FAFSA in order to qualify.

Undergraduate students who qualify for a Federal Pell Grant must show exceptional financial need. These grants are usually reserved only for undergraduate students, though some students enrolled in a post-baccalaureate teacher certification program might qualify.

How much can you receive from a Pell Grant? The amount varies, depending on your SAI, the cost of attendance of your school, whether you are a part-time or full-time student, and whether you will attend for a full academic year or not. The maximum Pell Grant award for the 2023-2024 academic year is $7,395. (The amount for 2024-2025 has not been announced yet.)

Scholarships for Low-Income Students

Colleges and universities may offer need-based scholarships. The money is yours to use for education — you do not need to pay it back. The results of the FAFSA help colleges and universities determine your eligibility for need-based scholarships and scholarships for low-income students.

You can also find need-based scholarships through employers, individuals, private companies, nonprofit organizations, religious groups, and professional and/or social organizations. There are a number of online search tools that can help you find scholarships you might qualify for.

Student Loans for Low-Income Families

As mentioned above, you can tap into either federal or private student loans for low-income students. Here’s a closer look at both.

Federal Student Loans

Based on the results of the FAFSA, you may qualify for a few types of federal student loans. Subsidized federal loans are need-based, while unsubsidized federal student loans are available to all students regardless of income or financial need.

Here’s a quick overview of three main types of federal loans:

•   Direct Unsubsidized Loans can go to undergraduate, graduate, and professional students. They are not need-based but you are responsible for paying all interest, which begins accruing as soon as the loan is dispersed.

•   Direct Subsidized Loans are for undergraduate students who demonstrate financial need. The government pays the interest on these loans while you’re in school, during any deferment, and during the six-month grace period after you graduate.

•   Direct Plus Loans are available for graduate or professional students or parents of undergraduate students and are not need-based or subsidized. Borrowers must undergo a credit check to look for adverse events, but eligibility does not depend on your credit scores.

Private Student Loans

Federal student loans don’t fully cover the cost of attendance for many students, and some students may consider tapping into private student loans as well.

Private lenders set their own requirements, however, and some students may find it challenging to qualify for a private loan if they have:

•   Little to no income

•   A negative credit history

•   A bankruptcy on file

•   A low credit score

How do you get around these issues? You may need to get a job while in school to prove you have some income. You may also want to work on building your credit before you apply for a private student loan. While you may be able to qualify with low income and low credit, you may make up for it by paying more in interest.

Another way to qualify for a private student loan with a low income and/or poor (or limited) credit is to apply with a cosigner. A student loan cosigner is a creditworthy adult who signs for a loan along with you. It’s a legally binding agreement stating that they’re willing to share the responsibility of repaying the loan on time and in full. Many borrowers turn to a family member for cosigning.

How to Apply for Student Loans

How to apply for student loans will differ depending on whether you are interested in federal or private student loans.

To apply for federal student loans, the first step is to fill out the FAFSA. Once you’ve filed the FAFSA, you basically sit back and wait to see what the school you’re planning to attend will offer you in federal aid, which may include a mix of grants, scholarships, and federal student loans. Your school will tell you how to accept all or a part of the loan.

Before you receive your loan funds, you will be required to complete entrance counseling, a tool to ensure you understand your obligation to repay the loan, and also sign a Master Promissory Note, agreeing to the terms of the loan.

Applying for private student loans involves directly going to a lender website or simply talking to your college or university’s financial aid office. Many institutions put together what they call “preferred lenders.”

Even if your school makes it easy for you to apply for a private student loan, it’s a good idea to do your research outside of the preferred lender list to find low interest rates and compare interest rate types (fixed or variable), repayment schedules, and fees. You want to find the terms and conditions that best fit your needs.

As you are researching private student loans, you’ll want to make sure that you (or your cosigner) meets the requirements to qualify for the loan.


💡 Quick Tip: Federal student loans carry an origination or processing fee (1.057% for Direct Subsidized and Unsubsidized loans first disbursed from Oct. 1, 2020, through Oct. 1, 2024). The fee is subtracted from your loan amount, which is why the amount disbursed is less than the amount you borrowed. That said, some private student loan lenders don’t charge an origination fee.

The Takeaway

Even if you’re a low-income student, you can access student loans. To find out what federal student loans you are eligible for, you’ll need to fill out the FAFSA. As a low-income student, you may qualify for subsidized federal student loans, which won’t accrue any interest while you’re in school and for six months after you graduate. This makes them more affordable than unsubsidized federal student loans and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What qualifies as a low-income student?

The U.S. Department of Education defines a low-income student as an individual whose family’s taxable income for the preceding year did not exceed 150% of the poverty income level established by the Census Bureau. For example, a student from a family of four living in the contiguous U.S. with a household income of $45,000 or less is considered low-income.

Do low-income students get free college?

Some low-income students are able to go to college for free through financial aid or merit scholarships. But even without a full ride, low income students can often pay for college through a combination of scholarships, grants, and loans.

Does FAFSA help low-income students?

Yes. Filling out the Free Application for Federal Student Aid, better known as the FAFSA, gives low-income students access to financial aid, including grants, scholarships, work-study programs, and federal student loans.

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Photo credit: iStock/Souda

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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 SoFi.com/eligibility-criteria 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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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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In your financial life, overdrafting your bank account is bad enough; no one likes to feel as if they’ve run out of money. But being charged an overdraft fee can dig you even deeper into the hole.

That’s why it can make sense to take some simple steps to avoid overdraft fees. You may be able to get a reprieve by contacting your bank or by linking accounts, among other moves.

In this guide, you’ll learn more about overdrafting and the charges involved, plus smart ideas for how to avoid overdraft fees.

What Is an Overdraft Fee?

If you pay out more than is in your bank account, your bank may go ahead and process the payment you’ve initiated, taking your balance into negative territory. They will likely charge you for this privilege (that is, letting you spend more than you have), and that is an overdraft fee.

How Much Do Overdraft Fees Cost?

Overdraft fees aren’t cheap. The cost can vary somewhat depending on the bank or financial institution, but they generally run around $35.

It’s important to note that the overdraft fee is generally per overdraft. So if you overdraft your account and don’t realize you overdrafted, you might make multiple purchases and incur a fee on each one.

And these fees can add up quickly. At $35 a pop, just three small purchases could set you back over $100.

Some banks may also charge extended overdraft fees (sometimes called continuous or sustained fees) if your account doesn’t go back into positive territory within a few days.

It’s no wonder that Americans paid $7.7 billion in overdraft and the related non-sufficient funds (NSF) fees each year.

However, a bit of hope: Over the last year or two, some banks are beginning to lower their overdraft fees. For instance, Bank of America reduced their fees to $10, and some financial institutions, often online banks, don’t charge any fees for, say, the first $50 of overdraft.

10 Ways to Avoid Overdraft Fees

Next, consider these ways to avoid overdraft fees. These strategies can keep overdraft fees from accumulating — or ever being charged in the first place.

1. Keep an Eye on Your Balances

How often do you monitor your balance typically? It’s a good idea to make a habit of checking your accounts weekly or even more frequently to make sure your balances aren’t too low.

This can be done quickly online, via mobile app, when you take money out of the ATM, and/or by calling the bank and getting an automated update on your account.

2. Maintain a Cushion

One simple way to avoid overdraft fees is to keep a cash cushion in your checking account. A cushion means you have a little more stashed in your account than you typically spend each month in order to cover unexpected or forgotten charges.

This cash cushion can prevent overdraft. You might even add it as an item on your budget to make sure it gets replenished if you use it up.

3. Set up Balance Alerts

An easy way to help avoid unexpected overdrafts, plus those high overdraft fees, is to set up some automatic alerts.

•   One that is particularly helpful is a low balance alert, which means you will be notified (by text, email, or cell phone notification) whenever your balance falls below a certain amount.

You could then immediately transfer money from savings, or hold off on making any purchases until another paycheck comes in.

•   Another useful alert you may be able to set up is the overdraft alert. This means you would be notified whenever you overdraft your account.

This alert won’t help you avoid the initial overdraft fee, but it could stop you from continuing to make payments and incurring more overdraft fees.

4. Opt Out of Overdraft Coverage

It is possible to prevent your bank from using the automatic overdraft. You just need to opt out of overdraft coverage.

Customers typically have to “opt-in” to a bank’s overdraft protection program, which many do without thinking much about it when they open their accounts.

This gives the institution permission to clear a transaction even if there is not enough money to cover it in the account. If you’re unsure about whether you’re enrolled in an overdraft program when you opened your account, you can contact your bank to find out whether you have this coverage or not.

There are pros and cons of overdraft coverage. If you have overdraft coverage, you may want to consider opting out. Without overdraft coverage for debit card purchases and ATM withdrawals, you will not be able to overdraft.

Instead, if you try to withdraw more than you have in the account, your charge will simply be declined — no money will be withdrawn from your account, and no fees will be triggered. This may help some people stay more mindful and accountable about their spending.

Keep in mind, though, that opting out of overdraft coverage programs typically does not protect you from fees charged for bounced checks.

5. Link to Another Account

Next on the list of how to avoid overdraft fees: Connect your accounts.

Your bank or financial institution might offer an overdraft protection service that is different from overdraft coverage. This service, which typically involves signing a contract to set up, will link your checking account to another account at the same institution.

Then, in the event that there’s not enough cash in your checking account to cover a transaction, the needed money would then be transferred from the linked account to cover it.

It’s important to remember, however, that some savings accounts have a limit of six withdrawals per month. Also, there may be a fee involved for the funds transfer, but these charges are typically lower than overdraft fees.

Another perk of overdraft protection is that it can help you avoid the awkwardness of having your transaction denied.

Recommended: Can You Overdraft Your Savings Account?

6. Be Careful About Where You Use Your Debit Card

Here’s another way to avoid incurring overdraft fees:

•   You may want to use something other than your debit card to check into a hotel or rent a car. These companies may put a hold on your card equal to or sometimes greater than the full amount of your bill.

In this case, money wouldn’t actually be withdrawn from your account, but it also wouldn’t be available for you to use. If you use your debit card to make another purchase and don’t realize that the hold is tying up your money, you may put yourself at risk for overdrafting.

If you’re planning to use your debit card to book a hotel or rent a car, you might want to check company policies in advance.

•   You may also want to avoid using your debit card to make lots of small purchases. These might be harder to keep track of and could add up quickly, making it more difficult for you to know how much money is flowing out of your account.

If you lose track of your spending, this too could put you more at risk for overdrafting.

7. Use Prepaid Debit Cards

Another tactic for avoiding overdraft fees is to do your spending with prepaid debit cards. These cards are often branded with a credit card logo and can be bought in a variety of sums. They come preloaded with that amount of money, and you spend until the cash value is gone. In this way, overdrafting isn’t a possibility. This might help some people stick to their budget.

8. Schedule Payments Carefully

You might also eyeball when payments are due, and see how that dovetails (or doesn’t) with your paycheck schedule. For instance, you might be more likely to overdraft your account if your credit card payment is due a couple of days before your paycheck hits. If that’s the case, you might try contacting your credit card issuer and see if they could move your due date slightly to better accommodate your cash flow. Many companies will do that.

9. Use Mobile Banking Apps

Here’s one more way to avoid overdraft fees: Use a mobile bank app, which can let you see your balance, pending payments, and spending in one click glance at your mobile device.

This can make it easy to eyeball how your money looks and avoid overspending.

10. Consider a Bank With No Overdraft Fees

Some banks are recognizing what a pain point overdraft fees can be for consumers. You may find that some are lowering their charges, and others are actually providing fee-free overdraft coverage. This may be limited to a certain amount (such as covering the first $50 of an overdraft) and may require the customer to get back to a positive balance within a certain period of time (say, until your next direct deposit hits). It can be wise to shop around for this feature; you may find it more often at online vs. traditional banks.

What to Do If You Overdraft

If you overdraw your account, here are some steps to take:

•   The best first step is generally to transfer money into the account right away. You might still be able to prevent an overdraft fee.

You may then want to see if your provider has a daily cutoff time or deadline for adding money to an account to correct a negative balance that same day to avoid fees.

Even if you miss the cutoff, transferring money into the account soon can prevent other fees. That’s because leaving a balance negative for several days can sometimes result in an extended overdraft fee.

•   If you are charged an overdraft fee, however, that doesn’t automatically mean you are stuck paying it. It doesn’t hurt to negotiate to try to have the fee reimbursed.

You can try to get overdraft fees waived by calling the bank and politely asking if they will remove the charge—if it’s your first offense, you might prevail. You may also want to ask your bank if it has a formal forgiveness program. Some institutions have policies to waive the first fee charged each year or if a customer is experiencing economic hardship.

The Takeaway

Overdrafting is when you try to spend more money from your checking account than you actually have in that account. Banks will often let your charge go through instead of declining it, but then will charge you an overdraft fee that can be around $35. These fees can add up quickly, especially if you don’t realize you overdrafted your account and continue to make purchases.

But there are a few simple ways to avoid hefty overdraft fees, such as opting out of overdraft coverage, setting up an automatic low-balance alert, linking your accounts, keeping a little cushion in your account, or banking where you get a level of no-fee overdraft coverage.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with up to 4.60% APY on SoFi Checking and Savings.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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The Free Application for Federal Student Aid or FAFSA® form is required for students who are interested in receiving federal financial aid. This task can be challenging and can increase in complexity when a student has parents who are divorced.

The federal government treats divorced parents differently than parents who are married. Understanding the requirements for the financial information required by the FAFSA could help students improve their chances of receiving federal student aid and potentially lowering the amount of student loans they need to obtain a degree.

Continue reading for more information on filling out the FAFSA if your parents are divorced or separated.

What Complicates FAFSA for Divorced Parents?

The FAFSA treats parents who are divorced differently than it treats parents who are married. If a student’s parents are married, the FAFSA requires both of the parents to submit their financial information. Students who have divorced parents will usually include the salary and other financial information of the parent that he/she lived with for the majority of the time for the past 12 months. This parent is considered the custodial parent.

If a student lived with each parent for equal amounts of time, they’ll provide information on the parent that provided the most financial support during the year.

If the parent has remarried by the time a student is filing the FAFSA, the financial information of the parent’s new spouse will also typically be required on the form.

Recommended: Important FAFSA Deadlines for Students and Parents

FAFSA Tips for Students with Divorced Parents

Here are some important questions to ask yourself and tips for completing the FAFSA application with divorced parents:

Who to Count as Parents for FAFSA

If your parents are divorced, the FAFSA generally requests information on the parent whom you live with for the majority of the time during the previous 12 months. In the case of shared custody where you live with each parent equally, you’ll provide information on the parent who provides the most financial support.

If your parent is remarried, you’ll provide information on the stepparent, as well.

What Is a Custodial Parent?

As briefly mentioned, a custodial parent is the parent you spend the most time living with during the year.

What About Stepparents and Common-Law Spouses?

Generally, you’ll need to provide the financial information for a stepparent who is married to the custodial parent.

Should Alimony Be Included as Income?

Any alimony or child support received by the custodial parent should be reported on the FAFSA.

Parent’s Education Level

The FAFSA will ask you to include the education levels of your parents. You only need to include information about either your birth or adoptive parents. In this section, the FAFSA does not need information about your stepparent.

What If My Divorced Parents Still Live Together?

If your parents live together, but are divorced, the marital status should be “Unmarried and both legal parents living together.” You need to provide information about both of them on the FAFSA form.

If your parents live together, but are separated, the marital status should be “married or remarried.” Do not use “divorced or separated.” You should provide information about both of them on the FAFSA form.

Additional Sources to Finance Tuition

Many students seek alternative financial aid to finance college if they do not qualify for federal aid or if the amount of federal aid allocated will not cover the entire tuition cost.

About half of college tuition and living expenses are paid by the income and savings of a student’s family members, according to a Sallie Mae study, “How America Pays for College in 2024 .”

Federal Aid

There are many other sources that could help a student obtain funding for tuition, books, and living expenses. When filling out the FAFSA, students are applying for federal financial aid. This includes federal student loans, the federal work-study program, and some federal grants.

Some colleges also use information provided on the FAFSA to determine awards for scholarships. Federal aid is provided on a first-come first-served basis, so it can potentially be helpful to file your FAFSA early. Check out even more detailed information in SoFi’s FAFSA guide.

Federal student loans can be either subsidized or unsubsidized.

Subsidized federal loans are given to students based on financial need. The interest on these loans is subsidized by the federal government, which means students will not be responsible for repaying the interest that accrues while they are enrolled at least part time or during their grace period.

Unsubsidized loans are not awarded based on need and will begin accruing interest as soon as the loan is disbursed.

Recommended: Types of Federal Student Loans

Scholarships

If federal aid is not enough to cover the cost associated with attending college, there are other options available to help you pay for college. Two sources of funding are grants and scholarships. These are highly sought after by students because they do not have to be repaid. Many of them require students to apply annually.

SoFi’s Scholarship Search Tool can help you find scholarships based on your location, level of study, and more.

Part-Time Job

Some students may also consider getting a part-time job to help pay for tuition or living expenses. Consider looking both on and off campus, or even online.

Private Student Loans

Private student loans could be another option for students to fill the gap to pay for tuition and other necessities, such as room and board and books.

Private student loans are offered by private organizations, like banks or online lenders, and can be more expensive than federal student loans. They also don’t come with the same borrower protections as federal loans, like deferment or income-driven repayment plans. That’s why private student loans are generally considered an option after students have exhausted all other sources of financing.

The loan terms and interest rate will vary from lender to lender and will likely be determined by the borrower’s financial history and credit score. Those interested in borrowing a private loan should consider shopping around with various lenders to find the best fit for them.

SoFi’s Private Student Loans

If your federal student aid, scholarships, and grants do not cover the entire amount of your tuition and living expenses, you can consider an undergraduate private student loan from SoFi. In just a few minutes, students can see if they pre-qualify for a private loan, what the interest rates are, and if a cosigner is needed.

SoFi has four repayment options for its undergraduate loans, giving students financial options to meet their budgets and financial circumstances.

SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.

FAQ

Does FAFSA require both parents’ income if they are divorced?

If your parents are divorced, you’ll generally report the information for the parent you lived with for the most amount of time in the past 12 months. If your parents have joint custody and you spend an equal amount of time with both parents, you’ll report the financial information of the parent who provided the most financial support during the previous 12 months.

How do you determine who parent 1 and parent 2 are for FAFSA?

Parent 1 and Parent 2 will be determined by how their information was entered into the FAFSA when the form was being completed. If the mother’s information was entered first, she would be Parent 1 and vice versa. If you cannot recall who was listed as Parent 1 or Parent 2 on your FAFSA, you can look the information up by navigation to the “Personal Information for Parent” page of your application and reviewing the information provided.

What is the maximum parent income to qualify for FAFSA?

There are no income limits when it comes to filling out the FAFSA or qualifying for federal financial aid. Even if your parents are high earners, you could still qualify for certain types of aid, such as scholarships or federal student loans. The FAFSA application is free to fill out, so it’s almost always worth taking the time to do so.

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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 SoFi.com/eligibility-criteria 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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