There are many levels of poverty and wealth. You're right, very poor families making $20k per year will qualify for need-based financial aid. However, "middle

There are many levels of poverty and wealth. You're right, very poor families making $20k per year will qualify for need-based financial aid. However, "middle class" families making $50k may not. They're sharing expenses and the kids are working just to stay in a house and have a car to split among the family members, and it feels like there's not enough to go around for day-to-day, but hypothetically enough to send one kid to college. Maybe they have two kids and the younger is a high school junior, FAFSA will assume that all the available money is available to send the first to their freshman year and not plan for next year. But if they're making $150k/year, they can have a lawyer and accountant help them structure their funds so that the kids do get financial aid.