FAFSA Income Protection Allowance

FAFSA does have a minimal income protection allowance. For parents, it tracks the federal poverty line fairly closely but has an additional variable of number attending college. For students, it’s a flat $6,420.

Here is the table from this year’s FAFSA for dependent students:

fafsa-ipa-1718

Note that the Income Protection Allowance goes down for each additional college student. Shouldn’t it go up since more students in college should yield more aid? Remember that you’re calculating EFC, Expected Family Contribution, not expected student contribution. So although you may have multiple students and each will have their own EFC calculated, the total parent contribution is then divided by the number of students in college to arrive at the “Parents’ Contribution.” Confused? Look at the Parents’ Contribution section on page 9 of the FAFSA Formula Guide here.

2 thoughts on “FAFSA Income Protection Allowance

  1. Hi, I have a question because FAFSA didn’t give me a correct reply about this.
    So, I can do a part-time job ( I am a college student) and earn up to $6k? If i pass that then it goes to my EFC?

    1. Yes, if you’re a dependent, you get an income protection allowance of $6420 for the 2017-2018 school year. Remember though that students don’t get any asset protection so if you earned that doing a summer job, you’ll want to spend it first for school expenses so that you don’t have to report it on the FAFSA. Your $6000 of income doesn’t add anything, but if it’s sitting in your checking account, it will add .2 x $6000 = $1200.

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