Side hustles can impact college students' financial aid eligibility based on earnings and aid type. Need-based aid may be affected if your side hustle income exceeds the income protection allowance, while merit-based aid remains unaffected unless it violates award conditions.  To avoid penalties, it is crucial to accurately report your tax returns and FAFSA. Consult a financial aid counselor or tax professional for guidance on aligning your side hustles with aid and deductions.