A lot of students think they're making too much money to qualify for student aid, so they skip the FAFSA entirely. Here's the thing though—there's actually no income limit for FAFSA eligibility, which means you could be leaving money on the table if you don't apply.

The numbers are pretty wild. Back in 2021, around $3.75 billion in Pell Grants just went unclaimed because students didn't bother filling out the form. And it's not just a small percentage—only 57% of high school graduates from the class of 2021 even completed the FAFSA. That's a lot of people missing out on financial aid they might actually qualify for.

So how does this work? After you submit your FAFSA, the government calculates your Expected Family Contribution (EFC)—basically what they think your family can contribute toward school costs. This number is what determines your financial need, and colleges use it to figure out how much aid to give you. The lower your EFC, the more aid you're eligible to receive. They're actually phasing out the EFC and replacing it with something called the Student Aid Index (SAI) starting in 2023, which is supposed to be a bit more flexible for students dealing with unexpected hardships.

Now, while there's no hard income cap for FAFSA eligibility, some types of aid do have restrictions. Pell Grants, for example—which can be worth up to $6,895 for the 2022-23 school year—are reserved for students with real financial need. Your EFC has to be $6,206 or less to qualify. Federal subsidized loans also require significant financial need. Some states and colleges have their own need-based grants too, like New Jersey's Tuition Aid Grant or Colorado State's Ram Grant.

There are other options that don't care about income at all though. Unsubsidized loans, PLUS loans, and scholarships based on merit are all available regardless of how much your family makes.

Bottom line: fill out the FAFSA early, even if you think your household income is too high. The formula takes into account way more than just raw income—it looks at family size, the schools you're applying to, and other factors. You might be surprised at what you actually qualify for.