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Independent vs. Dependent: How it Affects Your Student Loans

Broc Sleek

In College Planning & Financial Aid Managing MoneyBroc Sleek

When filling out the Free Application for Federal Student Aid (FAFSA) for the first time, you may have several pressing questions. One of them is: are you an independent or dependent student? There’s no one-size-fits-all answer to this question, and your response can significantly impact how much federal financial aid you’ll be eligible to receive. Learn more about what goes into these classifications, how they can affect your assistance, and changing your status if it doesn’t accurately reflect your situation.

What Difference Does Independent vs. Dependent Make? 

The FAFSA uses a student’s dependency status to calculate how much aid the student needs. This aid can often take the form of grants, subsidized loans, or unsubsidized loans. In general, students classified as “dependent” will qualify for less federal aid because the government assumes their parents or guardians will help them with college costs. (This assumption is what lies behind the “expected family contribution” (EFC) generated on the FAFSA). Independent students may qualify for more federal aid, this includes those who are older, married, or with a child, .

Dependency status can also come into play if one is hoping to qualify for in-state tuition rates. A student’s in-state status is based on their parent’s (or parents’) residency. This residency may require parents to formally change their custody or visitation agreement to establish the student’s college state. Independent students who live on their own on or near campus generally won’t qualify for in-state tuition rates unless they’ve been living in the state for a specified amount of time pre-dating their college enrollment.

What Factors Are Considered?

A few common factors the FAFSA relies on to determine whether or not a particular student should be classified as dependent or independent. These classifications are relatively fluid and can change as students’ circumstances change (more on that below).

Some of the questions that will be asked in determining whether a student is a dependent or independent include: 

  • Can the student be claimed as a dependent on someone else’s tax returns? 
  • Will the student be age 24 or older at the start of the school year?
  • Does the student have dependents, like a child or spouse, who rely on the student for their support?
  • Is the student an “unaccompanied youth” who is homeless or at risk of becoming homeless?
  • Will the student be working on a master’s or doctorate degree?
  • Is the student an emancipated minor, have they spent time in foster care,or have they previously declared a ward of the state?
  • Is the student currently serving on active duty in the U.S. armed forces?

If a student answers “no” to all the above questions but the first one, they’re likely a dependent. On the other hand, a student needs to respond “yes” to only one of these questions to be considered independent. This list isn’t exhaustive, and other factors like military status or marital status may also impact the ultimate decision. However, these questions can give students a good idea of whether they’re likely to fall on the independent or dependent side of the scale; and, accordingly, how much student aid they might qualify for.

More than half of all students who complete the FAFSA are classified as independent, though this figure is somewhat skewed by graduate students (who tend to be independent). Only around 14.7 percent of undergraduate students are deemed independent. 

Can You Change Your Dependency Status?

Many students who are deemed “dependent” (and, as a result, required to fill out the FAFSA along with their parents or guardians) may be discouraged at the expectation that their family will help pay for college if they can’t afford to. Unfortunately, a lack of family support alone isn’t usually a sufficient reason to classify a student as an independent.

However, in other situations, the student may seek a change in dependency status based on a change in circumstances. Listed below are some examples of particular circumstances that can be considered when determining your financial aid eligibility.

  • Parents who are wholly unable to contribute to your education. If your parents have low income, high debt, or a large family, they may wind up with an EFC of $0. EFCs of $0 can make you just as eligible for certain loans and grants as you’d be if you were an independent student with the same level of assets. If your parents’ financial circumstances have changed since they filled out the FAFSA, it’s worth amending this information to reflect the situation more accurately.
  • Incarcerated, hospitalized, or deceased parents. If you’re a dependent student and one or both of your parents is incarcerated, hospitalized, or institutionalized, they may no longer be deemed available to help you with your education. Adult orphans or those whose parents can’t be found can also qualify for independent status. 

Dependency Status Action Steps

If your situation falls into one of these categories, there are a few things you can do. First, it’s essential to report accurate, up-to-date information to FAFSA—but after your form has been processed, you need permission to make specific changes. You can update your dependency status or the number of people in your household by amending the form online. You can also update your name, mailing address, and other contact information at any time. But if you’ve had a change in marital status, you’ll need to check with your school first to see whether this should be reported. 

In addition to reporting specific changes to FAFSA, you also may want to contact your school’s student loan office to see if you’re eligible for a “dependency override.” A dependency override allows your school to manually change your status even if the FAFSA criteria disagrees. Because dependency overrides must be manually performed and are heavily regulated by the federal government, they can be tough to get—schools are often limited to a handful per year or per rolling period. However, your school’s loan office can work with you to determine your eligibility or see whether options allow you to reduce your college costs.

Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.