Financial Aid Questions: Work in College or Go Full-Time?

<b>I am 26 and looking to start attending school full time this fall. I am also taking some summer classes at a community college to get all the credits I can before starting. I am also a transfer student with 37 credits from another school I went to right out of high school. I am currently married and am considering quitting my job to attend school full time. We would be able to just barely live off my wife's income but I'm wondering if the lower income would help by making me eligible for additional federal and state grants. As of now, I qualify only for Stafford loans and nothing else. The alternative for me would be to keep working part time and make about $10,000 a year in addition to my wife's $25,000. Do you think it is worth it for me to keep working and receive no grants, or quit, get some grants, and be able to focus completely on school? — John W. Financial aid formulas are heavily weighted toward income, so quitting your job will increase your eligibility for need-based financial aid. In particular, the federal student aid formula has an income threshold at $26,000 that can have a big impact on aid eligibility. Students with family income below this threshold who were eligible to file an IRS Form 1040A or 1040EZ (or who satisfy certain other criteria) will have their expected family contribution (EFC) automatically set at zero. Students with a zero EFC qualify for a full Pell Grant. If your family income just misses the auto-zero-EFC threshold, you will still qualify for a Pell Grant, although perhaps not a full Pell Grant. Note that the financial aid forms ask for information about your family income during the prior prior tax year. Since you will be quitting your job, the year that your income is assessed will not be reflective of your ability to pay during the academic year. You should ask your financial aid office for a professional judgment review to make an adjustment for the drop in income. Some colleges call this a special circumstances review or financial aid appeal. Most colleges will make an adjustment to the income figures on your Free Application for Federal Student Aid (FAFSA), switching you from last year's income to an estimate of this year's income. However, since you are in the 12% tax bracket, you will probably net about $2,500 to $3,500 more after taxes with $10,000 in additional income than with lower income and a higher Federal Pell Grant. Federal and state grants may reduce the need to work and let you focus more on academics, but you may be better off financially if you work part-time. Nevertheless, you should take care to balance your work and school obligations. A study by Public Agenda found that work, school and family conflicts are the primary reason why many students drop out of college. Work conflicts are more likely for students who are employed full-time as opposed to students who are working part-time. On the other hand, other studies have shown that money problems are a major reason why some students drop out of college. If you decide to work while in college, don't work more than 12 hours a week. Working part-time can improve grades by forcing you to learn time-management skills. But working more than 12 hours a week takes away too much time from academics. Students who work 12 or fewer hours a week graduate with Bachelor's degrees at above-average rates. Remember, to qualify for financial aid each year of college, you must renew the FAFSA. Make it a point to do so every year after as soon as possible after October 1 in order to maximize your financial aid package.