EFC formula 2020/21 released

[mommdc]

https://ifap.ed.gov/efcformulaguide/attachments/2021EFCFormulaGuide.pdf

[mommdc]

Simplified Needs Test

For the 2020–2021 Award Year, a dependent student qualifies for the simplified EFC formula if both (1), below, and (2), on the next page, are true:
(1) Anyone included in the parents’ household size (as defined on the FAFSA) received
benefits during 2018 or 2019 from any of the designated means-tested federal benefit
programs: the Medicaid Program, the Supplemental Security Income (SSI) Program, the
Supplemental Nutrition Assistance Program (SNAP), the Free and Reduced Price School
Lunch Program, the Temporary Assistance for Needy Families (TANF) Program1
, and the
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
OR
the student’s parents:
• filed a 2018 IRS Form 1040, but did not file a Schedule 12
,
• filed a tax form from a Trust Territory3
, or
• were not required to file any income tax return;
OR
the student’s parent is a dislocated worker
AND
(2) The combined 2018 income of the student’s parents is $49,999 or less.
• For tax filers, use the parents’ adjusted gross income from the tax return to determine
if income is $49,999 or less.
• For non-tax filers, use the income shown on the 2018 W-2 forms of both parents (plus
any other earnings from work not included on the W-2s) to determine if income is
$49,999 or less.

[mommdc]

Auto Zero EFC

Certain students are automatically eligible for a zero EFC. The requirements for receiving an
automatic zero EFC are the same as those for the simplified EFC calculation except for these
differences:
• The income threshold for the parents of dependent students and for independent students and
their spouses is $26,000 or less (for an automatic zero EFC) instead of $49,999 or less (for
the simplified EFC calculation), and
• For independent students, those without dependents other than a spouse cannot receive an
automatic zero EFC.

[cshell2]

@mommdc

Simplified Needs Test

For the 2020–2021 Award Year, a dependent student qualifies for the simplified EFC formula if both (1), below, and (2), on the next page, are true:
(1) Anyone included in the parents’ household size (as defined on the FAFSA) received
benefits during 2018 or 2019 from any of the designated means-tested federal benefit
programs: the Medicaid Program, the Supplemental Security Income (SSI) Program, the
Supplemental Nutrition Assistance Program (SNAP), the Free and Reduced Price School
Lunch Program, the Temporary Assistance for Needy Families (TANF) Program1
, and the
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
OR
the student’s parents:
• filed a 2018 IRS Form 1040, but did not file a Schedule 12
,
• filed a tax form from a Trust Territory3
, or
• were not required to file any income tax return;
OR
the student’s parent is a dislocated worker
AND
(2) The combined 2018 income of the student’s parents is $49,999 or less.
• For tax filers, use the parents’ adjusted gross income from the tax return to determine
if income is $49,999 or less.
• For non-tax filers, use the income shown on the 2018 W-2 forms of both parents (plus
any other earnings from work not included on the W-2s) to determine if income is
$49,999 or less.

That should say Schedule 1, not 12.

Also there are exclusions. If you only file schedule 1 for capital gains, unemployment compensation, Alaska Permanent Fund dividends, educator expenses, IRA deductions, or student loan interest deductions, then you answer the FAFSA question as “No” that asks if you filed a schedule 1.

[mommdc]

Yes, thank you, when I copied from the link I quoted, it copied the footnotes as well.
I didn’t see it in time to edit my post.
The details can be found in the EFC formula that I posted the link for in the first post.
I just wanted to post some information about the simplified needs test and auto zero EFC because people had been wondering how the tax reform (no more 1040A or EZ) might affect the criteria to qualify.

[mommdc]

The Collegeboard EFC calculator seems to be updated to reflect the 2020/21 EFC formula now (federal methodology).

[cshell2]

They should have a question in there about the Schedule 1 qualifier. Using this calculator I don’t qualify for Simplified Needs test or Auto Zero because I don’t receive government assistance and am not a dislocated worker.

[mommdc]

I don’t know, I did not delve into it in detail.

I just noticed that it now said 2020/21 EFC calculator and asked about 2018 income.

We don’t qualify for auto zero EFC or simplified needs, and in previous years the CB EFC calculator has been pretty accurate for us.

Maybe you can contact them and give them some feedback?

[PSUmomTN]

Anyone else have their EFC double over last year - with only a $400 increase in income?

[mommdc]

Our EFC doubled because we went from 2 students in college to one.

Did your household size change, did you have assets above parent asset protection allowance?

Compared to last year the APA was much lower. Ours went from $13,000 to $7,000.

[NJdad07090]

I wonder how many colleges really try to match the EFC. Most schools I have had my kids apply to must just laugh at it. My EFC for child number 2 is about 18K ( child one is out of college and his brother is three years behind him) and most OOS state schools have no problem tripping that.

[NJdad07090]

Should be tripling that not tripping.

[Yankeefan20]

@mommdc

Simplified Needs Test

For the 2020–2021 Award Year, a dependent student qualifies for the simplified EFC formula if both (1), below, and (2), on the next page, are true:
(1) Anyone included in the parents’ household size (as defined on the FAFSA) received
benefits during 2018 or 2019 from any of the designated means-tested federal benefit
programs: the Medicaid Program, the Supplemental Security Income (SSI) Program, the
Supplemental Nutrition Assistance Program (SNAP), the Free and Reduced Price School
Lunch Program, the Temporary Assistance for Needy Families (TANF) Program1
, and the
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
OR
the student’s parents:
• filed a 2018 IRS Form 1040, but did not file a Schedule 12
,
• filed a tax form from a Trust Territory3
, or
• were not required to file any income tax return;
OR
the student’s parent is a dislocated worker
AND
(2) The combined 2018 income of the student’s parents is $49,999 or less.
• For tax filers, use the parents’ adjusted gross income from the tax return to determine
if income is $49,999 or less.
• For non-tax filers, use the income shown on the 2018 W-2 forms of both parents (plus
any other earnings from work not included on the W-2s) to determine if income is
$49,999 or less.

How does the SSI Program work?

[Yankeefan20]

@NJdad07090

I wonder how many colleges really try to match the EFC. Most schools I have had my kids apply to must just laugh at it. My EFC for child number 2 is about 18K ( child one is out of college and his brother is three years behind him) and most OOS state schools have no problem tripping that.

It may not use the EFC if it uses the CSS Profile.