Does Working Part Time Affect Financial Aid?

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Part-time work may reduce the amount of financial aid you're eligible to receive.
Part-time work may reduce the amount of financial aid you're eligible to receive. (Image: Jupiterimages/BananaStock/Getty Images)

If you are receiving financial aid for college or other postsecondary schooling, you may wonder whether you are also able to work to pay for expenses not covered by your financial aid. Unfortunately, the answer is not always the same and depends on a few different factors.

Defining Financial Aid

Financial aid is any and all assistance you receive to help you pay for your education, including grants and loans from the federal and state government, and educational loans procured from private banks. It can also include any money earned through a work-study position on campus. Scholarships, grants and loans made directly to you by your institution are also considered to be financial aid.

What Won’t Be Affected

Any type of financial aid that is merit-based—that is, based on your academic performance—will not be affected by income earned from a part-time job. Scholarships and private grants are often merit-based. Also, private grants procured by you directly from a bank or other lender won’t be affected. These are based only on your credit worthiness and sometimes enrollment status. The federal government’s Stafford and PLUS loans are also available to students regardless of whether they have income from a part-time job.

What May Be Affected

Government grant and loan amounts may be diminished or completely eliminated as the result of you taking part-time employment while attending school. The government uses complicated formulas and information taken from tax returns as reported by students on the Free Application for Federal Student Aid to come up with an expected family contribution, or an amount that the government expects that you can cover. The more earnings you report on your tax forms, the less money in grants and subsidized loans the government typically awards.

Important Considerations

Just because your financial aid may be affected by part-time employment does not mean that taking part-time work while going to school is a bad idea. Remember that any loans you take out as part of your financial assistance package will have to be paid back once you graduate. Students sometimes prefer to receive less financial aid and pay more of their tuition and other costs of attendance out of pocket from money earned in part-time jobs to graduate with less debt.

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