The Free Application for Federal Student Aid (FAFSA) is the gateway to all types of financial aid the federal government issues, including Pell Grants and Stafford Loans. The FAFSA evaluates a student's income and assets. For dependent students, their parents' income and assets are also used to determine the student's financial need. The FAFSA asks about Supplemental Security Income but does not count it as income for students or parents.
Reporting Receipt of Supplemental Security Income
Two questions on the FAFSA ask specifically about Supplemental Security Income (SSI) under SSI wage reporting. FAFSA Question 74 asks if the parents or anyone in their household received SSI during the previous two years. Question 96 asks if students or anyone in their households received SSI during the previous two years. Answering yes to these questions increases the chance that the student will qualify for an automatic zero Estimated Family Contribution or have the EFC calculated with a simplified formula.
SSI Wage Reporting
Since 2009-10, students and parents no longer need to report SSI income as untaxed income on the FAFSA. Therefore, students who receive SSI should not count these when adding up untaxed income for the FAFSA. The same rules apply to parents making application for their students. Previously, SSI wage reporting counted as untaxed income, per the Higher Education Act of 1965. Now, applicants do not enter the amount of SSI received anywhere on the FAFSA. However, if the social security benefits are taxable, they are included in gross income calculations and do affect eligibility for financial aid.
Effect of SSI Income on EFC
Excluding SSI from the category of untaxed income significantly decreases the student's Expected Family Contribution (EFC). The EFC counts a percent of the student's and parents' incomes as available to pay for college expenses. Because the SSI does not count as income, it does not affect the EFC. In addition, if someone in the household receives SSI and the parents' adjusted gross income is less than $50,000, the EFC formula uses the simplified needs test, which excludes assets from the calculations. This further reduces the EFC during the SSI and college financial aid process.
SSI Income Impact on Aid
Receiving SSI does not guarantee that a student will receive any particular type of financial aid, but it does increase the chances through lowering the EFC. The lower a student's EFC, the more need-based aid the student is eligible to receive. Looking at SSI and college students, the federal government bases Pell Grant awards entirely on a student's EFC. Full-time students with a zero EFC get the maximum award of $5,550 and those with an EFC of $5,273 or less get at least a small Pell Grant. The government also awards subsidized federal student loans based on a student's financial need, which is the difference between the EFC and the cost of attendance at the student's college.
