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Like most college students, you’re probably planning to work a summer job to help pay for school next year. If you currently receive college financial aid, you may be wondering how your summer job will affect your aid eligibility. Below is helpful information to help you understand the impact of your student earnings on your college financial aid.


First, let’s spend a moment refreshing your memory about the Free Application for Federal Student Aid (FASFA) and your Estimated Financial Contribution (EFC). These topics are essential in understanding how your earnings can affect your financial aid. To qualify for financial aid, the FAFSA must be filed each year you attend college. The FAFSA collects information about your family income and assets. This information is part of a formula which calculates your family’s EFC for college. If you are financially dependent, your parents’ information and yours will be used. If you are financially independent or a graduate student, the EFC will be calculated using your information only. You school then deducts the EFC from the total Cost of Attendance to calculate your financial aid eligibility.

How much of your earnings will be included in the EFC? The good news is that there is an earnings threshold before any contribution from student income is considered. For the EFC formula for the 2016-2017 academic year, dependent students can earn up to $6400 and independent students with no dependents can earn up to $9960 before any contribution is expected. After that, a percentage of your income will be used in the EFC calculation.


Is it still worth it to earn more than the income threshold each year? The numbers would indicate that the answer is yes. Since the EFC considers only a percentage of your earnings, you will net more than you contribute toward college.

Here are some important facts you should know:

  1. Federal Work-Study is not included in your EFC. Since work-study is a form of financial aid your school awards, any earnings you receive do not factor into the formula. Read the directions and do not report your Federal Work-Study earnings on your FAFSA.
  2. Each year the FAFSA will be based on income from a previous year. For instance, when you next file the FAFSA, available in October 2016, you will report income information from the 2015 calendar year. You report the income you earn this year on the FASFA available in October 2017 or 2018. That reporting timeframe is important for planning purposes. Bear in mind that the 2017-2018 FAFSA will also introduce some changes to how you report income.
  3. Be cautious about double-reporting earnings. In theory, you use your earnings this year for college, so they will probably not be in a savings account when you file your FAFSA next year. You should be aware that the EFC calculation considers both your savings and earnings when determining student contributions toward college expenses. If you use the money you earned from income to pay upcoming college bills, read the FASFA directions. Only true savings need to be reported.

Although we can provide general guidance, it is always best to check with your college financial aid office to learn the best option for your specific situation. They can tell you more about how your current earnings, including your summer job, may affect your financial aid in future years.