What distinguishes an independent student from a dependent student in terms of income eligibility?

The distinction between independent and dependent students in terms of income eligibility primarily revolves around the requirement to report parental income. Independent students are classified as such due to various factors, such as age, marital status, military service, or having dependents of their own. Because they are considered self-sufficient, independent students do not have to report their parents' income when filling out financial aid applications. This is key to determining their own eligibility for various programs, including housing assistance.

In contrast, dependent students are required to provide parental income information as this is used to assess their financial need. Thus, the accurate understanding of independence in the context of financial eligibility hinges on the ability of independent students to operate without having their parents' financials taken into account, making option C the correct one. This reflects a fundamental principle in financial aid assessments, wherein independent and dependent statuses significantly influence the resources and support available to students.