It’s summer job time! If your student is a rising high school junior or above, they should be aware of the FAFSA’s Income Protection Allowance for dependent students. For the 2017-2018 FAFSA, it’s $6,420. That means that the first $6,420 they earn in 2016 does not increase their EFC, but any earnings above that do, to the tune of 50 cents per $1 of income. So a student earning $7,000 in 2016 would increase their EFC by $290.
Likewise, parents who employ their student in their own business can pay the student up to $6,420 this year both to reduce their own income taxes and to transfer that income out of the parent income calculation of the EFC.