Automatic 0 EFC

Paying for College
1

<p>My parent's have a small buisness that makes very little money. It is well under the limit for an automatic 0 EFC. We do however have over $300,000 in savings. Would I still get a 0 EFC? I tried it out on the FASA4Caster and it said be EFC would be like $2,000.</p>

2

<p>I want to be sure I understand this. Your parents have income less than $30,000 a year, but they have $300,000 in a regular savings account? Is that correct?</p>

3

<p>Yeah, it’s pretty strange. They used to save a lot when the buisness was making good money.</p>

4

<p>Hmmm…I could be wrong…but how would you qualify for the auto zero? Maybe I’m not accurate, but the simplified needs test requires a low income level, and the ability to file a 1040 A or 1040EZ (not sure you can do either when you own a business), or receipt of a means tested benefit (food stamps or free/reduced lunch for example). </p>

<p>If you do qualify for simplified needs and an auto $0 EFC, your EFC would be $0 because your assets would not be considered at all.</p>

<p>If your $300,000 asset is taken into consideration, there is an asset protection allowance, but $250,000 or so would be counted. At 5.6%, it would add $14,000 to your EFC.</p>

5

<p>Thanks! </p>

6

<p>Well…I might be wrong! Hoping someone else pipes in!!</p>

7

<p>

See <a href=“http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf[quote]For”>http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf

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8

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<p>And this…do your parents fit this criteria?</p>

<p>And an income of $49,000 or less.</p>

<p>The $24,000 or less is for the auto $0, I believe.</p>

9

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<p>And the above for auto zero.</p>

<p>So I believe you would need to have the 1040a or ez requirement OR means tested benefit criteria for this auto zero.</p>

<p>Unless I’m reading this incorrectly.</p>

10

<p>If your parent own a business, they cannot file a 1040A or 1040 EZ. You are not eligible for an automatic 0 EFC.</p>

11

<p>But isn’t it 1040a/1040ez OR a means tested benefit (number 1 above…)? Plus the income limit (number 2 above)?</p>

<p>So if the student received free lunch, or the family SNAP, AND their income was below a certain amount wouldn’t they qualify?</p>

12

<p>it says </p>

<p>For the 2014–2015 Award Year, a dependent student qualifies for the simplified EFC formula** if
both<a href=“1”>/b</a> below and (2)</p>

<p>While free lunch snap benefits fulfill section 1, they still have to meet the requirements for section 2. This is not to say that a family may still not end up with a 0 EFC, it probably will just not be an automatic 0 EFC.</p>

13

<p>The parent AGI has to be below $24,000 and ONE of the following must be true: a) the parent was eligible to file a 1040A or 1040EZ; 2) someone in the family received federal means tested benefits in 2012 or 2013; c) the parent is a dislocated worker. a, b, and c are “OR’s” … that is, it can be any one of the three, along with the <$24,000 AGI, that makes auto 0 kick in.</p>