As a college-bound high school graduate or the parent of a student applying to colleges, you may wonder if independent students get more financial aid, like student loans, than dependent students.
Overall, the answer is no, although some Department of Education (DOE) programs provide more money to independent students than dependent ones.
Dependent vs. Independent Students
Many college-bound students fit the requirements of dependent students. These are young adults between the ages of 18 and 24 who are recent high school graduates, still rely on their parents’ financial support, and are not married. When most people think about a student pursuing an associate or bachelor’s degree, that is the profile they think of.
However, more independent students are enrolling in college. The job market increasingly requires education beyond a high school diploma or GED, and older adults who may have dropped out of college or completed an associate degree rather than a four-year degree are returning to school after working for a few years. Independent students are those who do not rely on their parents for financial support.
How Do Independent Students Get More Financial Aid?
The DOE uses several factors to determine whether students qualify for financial aid. One part of the calculation for student loans is dependency status, but this is the only program that uses this information directly.
As an independent student, you may have lower income and fewer assets, which can indirectly impact your FAFSA information.
Fill Out the FAFSA
The Free Application for Federal Student Aid (FAFSA) is an application that you and/or your parents or guardians fill out and submit to the federal government, so the DOE can determine which types of financial aid you qualify for. Your FAFSA number is based on a mathematical equation from two sources:
- Expected family contribution (EFC): This is the income and assets you or your family can spend on your education. If you are a dependent student, this information predominantly comes from your family. If you are an independent student, this is your own information.
- Cost of attendance (COA): This is the cost of attending a college, university, trade school, or professional school that you listed on your FAFSA.
The DOE subtracts your EFC from the COA to create your FAFSA number. This information is sent to each school you list on your FAFSA (up to 10 schools at a time). Each school then creates financial aid award packages for you to go along with your acceptance letter, if they accept your application.
As an independent student, you may have fewer assets and income than the combined financial power of your parents. You may be younger but working at a full-time job. You may have debts of your own, and you may have a spouse and dependent children of your own.
All this information affects your EFC as an independent student, so you probably qualify for more financial aid than some dependent students. Still, this is not guaranteed. You should fill out the FAFSA no matter what, so you can get financial aid information.
Types of federal financial aid awarded through the FAFSA include:
- Pell Grants. After you fill out the FAFSA, your financial information indicates whether you qualify for the federal Pell Grant program. Pell Grants are most often awarded to undergraduate students based on financial need, but some professional or postbaccalaureate students also receive this money.
As of the 2019–20 school year, you can receive up to $6,195 per year for your education. This is not calculated directly on your dependency status, though being independent can affect your personal finances. Almost 90% of Pell Grant recipients do not live with their parents, and 66% reportedly have dependents of their own.
- Direct student loans. Both subsidized and unsubsidized loans through the direct loans program offer financial assistance to students attending postsecondary school. Subsidized loans go to students with significant financial need, while a wider range of students qualify for unsubsidized loans.
Unlike the Pell Grant, both types of loans in the federal direct loan program vary in amount based on whether you are a dependent or independent student. For example:
- First-year undergraduate students: Dependent students can take out as much as $5,500 ($3,500 of which can be subsidized loans), while independent students can take out $9,500, with the same amount in subsidized loans.
- Second-year undergraduate students: Dependent students can borrow up to $6,500, while independent students can borrow $10,500.
- Third-year undergrads and beyond: Dependent students qualify for $7,500 in loans, while independent students qualify for up to $12,500 in loans.
Graduate students are considered independent, so everyone can take out up to $20,500 in unsubsidized loans, without any subsidized loans, per year.
Should You Become an Independent Student to Get More Financial Aid Help?
Research shows that about half of students attending undergraduate programs are independent, and many have dependents of their own, such as children and spouses. Among independent students, most are the first in their families to attend this level of higher education. Many took years off from school after getting their high school diploma so they could work and support a larger family unit, including parents and younger siblings.
More independent students are people of color, recent immigrants or from immigrant families, or from abusive family situations who emancipated themselves.
While emancipation from your parents is one route to becoming an independent student, it is not inherently worthwhile for your financial aid application. There are several complicating factors in the FAFSA.
If your parents give you any financial support at all, but you are an independent student, your EFC number could be much higher than if you remained a dependent student. Most students qualify for several forms of financial aid, from need-based grants to merit-based scholarships to student loans.
You may not qualify for the same amount of financial aid every year, but taking on a little more in student loans one year, or finding outside scholarships or work opportunities, can help you make up the difference. Private student loans are a great way for many college students, both dependent and independent, to make up small gaps in their education costs.
Private student loans do not rely on FAFSA information, but on your credit score, so you can get a better deal on some of these.