What income to put on financial product applications as a student

Quick insights

• It’s important for students to accurately report all eligible sources of income on financial applications, such as credit card and financial aid applications.
• Money that you’ve earned through work or by receiving grants and scholarships can typically count as income, while that which you’ve borrowed and may need to pay back might not.
• Understanding what funds qualify as income can be tricky, and you should carefully review the guidelines of each application before submitting them.

As a student, you may need to report your income on various applications, such as those for credit cards, loans and financial aid. Understanding what counts as income and how to accurately report it can help you maximize your chances of approval and the benefits you receive.

Common applications that require your income

There are several types of applications where you may need to report your income as a student. Understanding the specifics of each application can help you better prepare and potentially improve your chances of approval. We’ll look at a few of the most common examples below:

Student credit card applications

When applying for a student credit card, you'll need to provide information about your income. This helps the credit card issuer determine your credit limit and whether you qualify for the card. For instance, students reporting an income range of $15,000 to $25,000 might qualify for credit cards with higher credit limits and better benefits than those with ranges of $0 to $5,000.

That said, there is no set minimum income requirement that applies to all student credit card applications, and not having a job does not immediately disqualify you for a credit card. Lenders consider a variety of factors when determining whether to extend an applicant credit, and these include income as well as debt-to-income ratio, credit history, age of credit and more.

Student loan applications

If you're applying for a student loan, whether federal or private, you'll need to report your household income to determine your eligibility and the amount you can borrow. For federal student loans, income information can help determine your Expected Family Contribution (EFC), which can influence the types of loans and the amounts you qualify for. Lower incomes could possibly result in higher eligibility for subsidized loans, as could a student applicant receiving no financial assistance from their legal guardians. Other factors that could impact student loan terms, amount and eligibility include the applicant’s credit score, credit history, school year and dependency status.

All of that said, according to the Federal Student Aid Office "there is no income cut-off to qualify for federal student aid. Many factors—such as the size of your family and your year in school—are considered."disc-studentaid-understand-aid-eligibility For more information about the Free Application for Federal Student Aid (FAFSA^®) and the steps to take after filling it out, you can visit studentaid.gov.

Financial aid applications

When applying for financial aid, such as grants, scholarships, and work-study programs, you'll need to provide information about your income, and likely the income of your parents and/or legal guardians, as well. This helps the financial aid office determine your financial need and the amount of aid you're eligible to receive. For example, students with household incomes below $50,000 might be eligible for more substantial need-based aid than those with incomes above $200,000. In addition to household income, other common factors that could impact financial aid decisions include credit score, credit history, family connection to the school, academics and extracurricular activities and more.

Loan applications

If you're applying for a loan, such as a car loan or personal loan, you'll need to provide information about your income. This helps the lender determine your ability to repay the loan. Generally, higher income levels can lead to more favorable loan terms and interest rates, as they suggest a lower risk to lenders. On the other hand, lower incomes might require additional documentation or co-signers to secure approval, and they could lead to higher interest rates.

What counts as income for applications

When reporting your income on applications, you can generally include any regular and reliable source of income. This may include:

• Job wages: This includes both full-time and part-time work, as well as any tips or commissions you earn.
• Self-employment income: If you run your own business or do freelance work, you can include this income.
• Financial aid: Some forms of financial aid, such as work-study programs and scholarships, can be included as income.
• Passive/investment income: While not particularly relevant for many college students, investment income includes anything you earn from investments, such as rental properties, dividends or interest.
• Parental support: If your parent(s) or guardian(s) provide you with regular financial support, some applications may allow you to include this as income.

What income should you put on financial applications if you’re a student?

So, all of that said, what income should you put on your financial applications? As a student, it's important to accurately report all eligible sources. This includes all income categories listed above, including job wages; scholarships, grants, some financial aid and stipends; passive and/or investment income; and potentially regular financial support from your parent(s) or guardian(s).

Be sure to review each application's guidelines carefully, as some may require you to report household income if you’re considered a dependent, while others might instruct you to omit that information or leave it up to your discretion.

What doesn’t count as income on applications?

When filling out financial applications, certain types of financial support don’t count as income. For instance, federal and personal loans; one-time gifts from family or friends and non-cash benefits such as food stamps, housing assistance, or subsidies should not be included as income.

As a general rule, if it’s money you earned through work, it’s probably income; if it’s something you borrowed and may need to pay back, it probably isn’t.

Bottom line

Understanding what constitutes income on financial applications can be confusing for anyone, and student income potentially even more so. It's important to accurately represent your income and always refer to the specific guidelines provided in each application, as definitions and requirements can vary. Remember to be honest and accurate when reporting your income. Misrepresenting your income can lead to serious consequences, including denial of credit, damage to your credit score, and potentially even legal action.