How Student's Summer Job Impacts Financial Aid

With college costs soaring, students are being called upon more and more frequently to foot some portion of the bill. Some are required to take out student loans while others will earn money for school through work. One question many families have relates to the impact a student's earnings will have on their financial aid award.

One misnomer is that student earnings will ALWAYS count against a family when financial aid is calculated. This is not the case across the board. The deciding factors are the amount of money earned and the type of financial aid forms that are being completed.

The FAFSA allows students to shelter up to $6400 in earnings for the 2015-16 school year. When taxes are factored in, students can earn more than $7000 for the year and still not see a reduction in need-based financial aid received. That threshold is above what most currently receive during part-time summer jobs or internships, meaning there may be no impact for your student.

While this is the case on the FAFSA, more and more schools are requiring an additional financial aid form, the CSS Profile. Schools that use this form will assume that students will be contributing at least some amount of money through earnings or assets, with the amount varying from school to school. The bottom line is the CSS Profile doesn't provide the income allowance that the FAFSA does. Here is a full list of CSS Profile schools.

While you get a break when it comes to student earnings, it's important to realize that even the FAFSA doesn't provide an allowance when it comes to student assets. Any money that is held in a student's name -- think checking or savings accounts -- will reduce the family's financial aid eligibility. There are a few college savings vehicles that are also counted as student assets, including trusts like UGMAs and UTMAs, so families have to be especially aware when it comes to how they are saving and preparing for college. There are ways to reduce the impact of student assets, and you can let me know if you'd like to discuss more as related to your family.