FAFSA income limits for 2025-2026

Many assume that if a family earns “too much,” there is no point in completing the FAFSA. This myth persists because some grants and institutional aid have income limits. but The FAFSA itself does not impose a fixed income cap.

FAFSA eligibility is not an all-or-nothing gateway. Instead, your Student Aid Index (SAI) It is calculated using multiple inputs. Your income is one factor among many (such as family size, assets, number of students in college).

Because the formula is so layered and nuanced, many families with six-figure incomes still fill out the FAFSA and, in many cases, receive aid, especially institutional or government grants.

It’s no secret that the cost of attending college has increased rapidly over the past several years and decades. Although there are many scholarships and programs available to help cover the cost of higher education, it is still too expensive for many people.

So it makes sense to try to reduce the cost you have to pay. Some ways to do this include choosing a low-cost college, living at home, and getting financial aid. However, to be eligible for any form of financial aid, you must fill out a FAFSA form each year. Keep in mind that there are income limits to qualify. Here’s what you need to know.

What is FAFSA?

FAFSA is short for Free Application for Federal Student Aid. As the name suggests, the FAFSA is a government form administered by the Department of Education that helps allocate various forms of financial aid for higher education.

The FAFSA opens each year on October 1 and closes on June 30 of the year you apply for aid. This gives you approximately two full years to apply.

The FAFSA is simply a request for assistance. It collects all of your information (income, assets, etc.) and creates a Student Aid Index — which is then sent to colleges and state aid agencies who will compile your actual financial aid award.

How SAI and financial aid work in practice

The SAI collects information from:

• Adjusted gross income (AGI)
• Assets (investments, savings, real estate, business/farm)
• Family size and number of people in college
• Income protection allowances, tax credits, and living expense factors are area-based

Once SAI is calculated, your file Financial need It is generally calculated as follows (although each school can change this):

Cost of Attendance (COA) – Supreme Audit and Financial Auditing Authority = Aid eligibility (theoretical maximum need-based aid)

Because COAs vary by college, even families with relatively high SAIs may “need” more expensive institutions.

Examples and scenarios

Here are some scenarios:

Is there an income limit on the FAFSA?

There is no income limit on the FAFSA. Anyone can fill out the FAFSA, and it’s a good idea to fill out the FAFSA every year. While many grants and certain types of loans have income limits, you may qualify for certain opportunities even if you or your family have a high income.

Since there is no downside to filling out the FAFSA, you should plan to fill it out for every college student in your family each year.

What about Pell grants?

Pell Grants are a form of financial aid, and they have an income limit. The maximum Pell Grant award is just $7,395, making it one of the smallest forms of financial aid.

Although there is no general income limit, Pell Grant eligibility It uses its own thresholds:

• To qualify for maximum Bill, a family must meet certain criteria including a low income compared to poverty guidelines.
• The AGI of the parents of a dependent student must be subject to certain multiples of the poverty guidelines (e.g. ≥ 175% for non-single parents) to be eligible for the maximum Pell.

You can see the full Pell Grant income chart here.

So, while you can file the FAFSA regardless of income, your ability to get the full Pell Grant depends on how your SAI compares to those limits.

Common myths and misconceptions

Frequently asked questions

Does high income mean I don’t get federal grants?

maybe. SAI reduces, but does not always eliminate, eligibility for need-based federal grants such as Pell, especially in generous institutions or families with large families.

Can assets disqualify me from aid eligibility?

Yes. Higher asset levels can raise your SAI level, reducing your imputed need. But allowances and deductions in the formula mitigate this effect.

Will filing the FAFSA affect my taxes?

no. The information is used for federal student aid, not taxes.

Should I estimate my tax return or wait?

You must use prior year’s income regardless of when you file. So the 2026-27 FAFSA will always use your 2024 tax return information.

Families should always file the FAFSA, regardless of income

There is no fixed income limit for the FAFSA — even people with high incomes should always file. What matters is how your financial picture compares across the SAI formula, cost of school, and institutional aid policies.

Filing the FAFSA gives you access to the following:

• Federal student loans: Regardless of income, filing the FAFSA opens up the ability to obtain subsidized or unsubsidized federal loans, often at favorable interest rates.
• Institutional aid and grants: Many colleges require the FAFSA to award aid based on need or merit. Some institutions allocate aid only after obtaining FAFSA data.
• State aid eligibility: Some government grants use the FAFSA to determine eligibility, even for middle- or upper-income families.
• Situations change year after year: Income, assets, and family size vary. Skipping the FAFSA by a year could cost you potential aid you could have earned.

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