Did you have a job in high school? Was it mowing yards during the summer, helping at a local business, or perhaps at the grocery store? Working during that stage of life probably paid off beyond just spending money. The experience likely influenced your path towards the working world and taught you the value of hard work. You might be thinking about how your son or daughter can have a similar experience during their teenage years. As valuable as it is, could there be an impact on need-based financial aid later when they go to college? Let’s find out.
"It is the hard-working farmer who ought to have the first share of the crops." 2 Timothy 2:6 ESV
First, know the FAFSA Form
The Free Application for Federal Student Aid (FAFSA) is the starting point for most questions around student aid. This form, from the federal Department of Education, is the basis for applying for financial aid from a variety of sources like the federal government, states, and most universities. Some private opportunities and scholarships ask for information from the FAFSA as well. Because most aid it tied to FAFSA, the explanations below will reference FAFSA frequently.
What does FAFSA look at?
FAFSA methodology looks at a multitude of factors regarding your student’s and your family’s financial situation, school choices, and more. The formula is complex so keep in mind we’re just talking about income here. One the of the key nuances is the lag the FAFSA form operates on. When you fill out this form before admissions, most of the financial data will be from a previously filed tax return. As an example, families filling out the 2021-2022 version of the form will be asked for information on your family’s 2019 tax return. This means that financial data for Mom, Dad, and your aspiring student will all be on this lag of about two years.
How much income is too much?
The good news is there’s an amount your student can make that is exempt from consideration in the FAFSA calculation. For the 2020-2021 form, the amount is $6,840 known as the "income protection allowance". This dollar amount changes each year to account for inflation. Given that threshold and the likely wage that your student is earning, few students will be affected negatively by a summer or part-time job. After the minor’s income exceeds this threshold, there can be an effect on the FAFSA methodology.
Here’s a few more specific scenarios to consider:
Can a part-time job affect a scholarship?
Some scholarships are directly affiliated with a college and some are affiliated with non-profits, foundations or other private entities. While colleges adhere very closely to the FAFSA methods, private scholarships can use, for the most part, any criteria they want. This includes any student generated income if they choose to ask. The scholarship provider or committee could use a different threshold or ignore the issue entirely. Ask the sponsor of the specific scholarship or check their guidelines to see for certain.
Can a part-time job affect a student loan?
This is only one of a number of factors, but income above the threshold we discussed earlier could affect your student’s ability to get a subsidized loan from the federal government. Note it does not disqualify your student, but it could reduce the amount of aid or reduce likelihood to receive aid.
Can a part-time job affect an education grant?
Grants, from the federal or state government, could be affected by a summer job if your student’s income for the year in question is above the threshold we discussed above. Keep in mind this is just one of a number of factors.
Could a teenage job help with student aid?
Another scenario to consider is how work opportunities during high school could help secure financial aid. Some companies make scholarship opportunities available for their teenage employees. These are often overlooked options. There’s also an opportunity in the essay writing process, that many scholarships require, to make a case on how the work experience differentiated your student.
Should my teenager have a job?
Employment during the teenage years is a question with many factors outside of just college financial aid questions your family will have to answer. A first job will have many life benefits beyond just some spending money. Help your teenager navigate this question and help them celebrate the act of turning their skills into a paycheck.
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