The value of a college degree is undisputed. A 2010 report from the College Board estimates that, among full-time workers, high school graduates earned a median annual income of $33,800; workers with an associate’s degree, $42,000; and, workers with a bachelor’s degree, $55,700.

Chapter 4 | Federal Financial Aid

The information included on this webpage was excerpted from Chapter 4 of College Access and Success for Students Experiencing Homelessness: A Toolkit for Educators and Service Providers, available in its entirety at

thinking thought bubbleChapter 4, Part 3 | Understanding Dependent and Independent Student Status
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Calculation of Federal Student Aid

According to the Office of Federal Student Aid, a student’s federal financial aid package is calculated as follows:

  • The financial aid staff assesses a student’s cost of attendance (COA) at the school.
  • The U.S. Department of Education, through its Central Processing System, calculates the student’s Expected Family Contribution (EFC) based on the information provided on the student’s FAFSA. The EFC is an index that college financial aid staff use to determine how much financial aid a student would receive if he were to attend their school. The EFC is calculated according to a formula established by law.
  • The staff subtracts the student’s EFC from the COA to determine the amount of the student’s financial need and, therefore, how much need-based aid the student can receive.
  • To determine how much non-need-based aid a student can get, the school takes the COA and subtracts any financial aid the student already has been awarded; eligibility for non-need-based aid, which consists primarily of loans, is calculated without considering the EFC.

Dependent vs. Independent

Office of Federal Student Aid Dependency InfographicA student’s EFC is calculated based on the income and asset information the student provides on his FAFSA. The information that must be provided, and the effect this information has on the calculation of student aid, depends on whether a student is considered dependent or independent. For purposes of filling out the FAFSA:

  • A dependent student must provide information about her own income and assets and also those of her parents and must have a parent signature on the FAFSA.
  • An independent student must provide information only about her own income and assets and does not need to have a parent signature on the FAFSA.

In general, federal student aid programs are based on the concept that it is primarily the student’s and her family’s responsibility to pay for her education. A dependent student is assumed to have the support of her parents; thus, the parents’ financial information must be evaluated along with the student’s in order to get a complete picture of the family’s financial strength. If a student qualifies as dependent, this does not mean automatically that the student’s parents will need to contribute towards the cost of the student’s education; it simply means that the parents’ financial information is factored into the calculation of the student’s EFC.

An independent student is considered to be financially independent from his parents and, therefore, does not need to include parent information on the FAFSA. According to the Office of Federal Student Aid, A student qualifies as independent if any of the following are true:

  • he is 24 years old or older;
  • he is married on the day he applies for financial aid;
  • he will be enrolled in a master’s or doctoral degree program at the beginning of the academic year covered by the FAFSA;
  • he is serving on active duty in the U.S. Armed Forces for purposes other than training;
  • he is a veteran of the U.S. Armed Forces;
  • he has children who will receive more than half their support from him during the academic year;
  • he has legal dependents (other than his children or spouse) who live with him and receive more than half their support from him;
  • when he was age 13 or older, both his parents were deceased and he was in foster care or a ward of the court;
  • as of the day he applies for aid, he is an emancipated minor as determined by a court in his state of legal residence;
  • as of the day he applies apply for aid, he is in a legal guardianship as determined by a court in his state of legal residence; or
  • at any time on or after the July before he files his FAFSA, he was determined to be an unaccompanied youth who was homeless.

If a student does not meet any of the above criteria, he is considered dependent and must include his parents’ information on the FAFSA, with the possible exception of qualifying as an independent student through a dependency override.

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weUp Next: Part 4 | Dependent Homeless Students and the FAFSA

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Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6

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NAEHCY 2018 Conference
Anaheim, CA
October 27-30, 2018
The Every Student Succeeds Act of 2015
Homeless Students in ESEA Reauthorization
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