See exactly how much of your part-time job income is sheltered from the FAFSA formula before it affects your financial aid — and why work-study income doesn't count at all.
For the 2026–27 award year, a dependent student can earn up to $11,770 from a regular job before any of it factors into the FAFSA formula at all — this is the student Income Protection Allowance (IPA), set annually by the Department of Education. Every dollar earned above that threshold is assessed at 50%, meaning half the excess adds to your Student Aid Index (SAI). A student earning $15,000 has $3,230 above the allowance, so $1,615 gets added to their SAI — not the full $15,000, and not the full $3,230.
Federal Work-Study earnings are excluded from the FAFSA income calculation entirely, no matter how much you earn from it. This isn't the same mechanism as the IPA — it's not sheltered up to a limit and then assessed above it, it simply doesn't appear in the income side of the formula at all. A student who earns $11,770 from a regular job and another $5,000 from work-study reports $0 in SAI-countable income from the work-study portion, while the regular-job portion is measured against the $11,770 IPA exactly as usual.
An SAI increase isn't a dollar-for-dollar aid cut. The 50% assessment changes your Student Aid Index, which is one input your school uses — alongside its own funding and your cost of attendance — to build your actual award. A higher SAI can reduce need-based aid, but the relationship isn't a direct one-to-one subtraction from your award letter the way it is with SAI itself.
How much can a student earn before it affects financial aid? For 2026–27, a dependent student can earn up to $11,770 before it counts against aid eligibility. Every dollar above that is assessed at 50% toward the SAI.
Does work-study income count against financial aid? No — Federal Work-Study earnings are excluded from the FAFSA income calculation entirely, regardless of amount. Regular job income is sheltered only up to the IPA and then assessed at 50% above it.
Is the income protection allowance the same for independent students? No — the $11,770 figure here applies to a dependent student's own earned income. Independent students use a different allowance based on their own household size and marital status; check studentaid.gov for that figure.
Does a $2,000 raise in income really only cost $1,000 in aid? Only for the portion above the $11,770 allowance, and only as an increase to your SAI — not a direct dollar-for-dollar cut to your award. Your school combines SAI with its own funding and cost of attendance to set your actual package.
Financial Aid Calculator — see your true net cost once grants and loans are separated.
Pell Enrollment Intensity Calculator — see your exact Pell % at your credit load.
Pell Grant Changes for 2026–27 — the OBBBA changes to Pell eligibility rules.
How Does Financial Aid Work? — the full FAFSA-to-award-letter process.