Bank Account and efc

I am an independent student. For the last fafsa, I had about $2000 in my checking and my efc was 0. Currently I have $5000 in a checking account. How will this affect my efc for the next fafsa cycle? Is there an allowance before the money in my checking account counts toward my efc?

You can do a web search to see the allowance. If you qualify for simplified formula, your assets are not considered. If not and you are unmarried and under 50, 20% of the extra 3k will count toward your EFC.

If your AGI is under $49,999 assets are ignored completely.

IIRC…

@cshell2 if you are talking about the simplified needs test (where no assets are considered), income needs to be less than $49,999 AND the person needs to qualify for a means tested benefit, or Be a dislocated worker (if independent). You used to be able to file a 1040A or 1040EZ as an option but when the tax law changed, those forms went away…I forget what is in place instead.

My point is…the income threshold is only one of the two prongs for qualifying for the simplified needs test.

The other qualifier is not having to file schedule 1 unless it’s for one of these exceptions:

Capital Gains (line 13 may not be less than 0)
Unemployment compensation (line 19)
Other income to report an Alaska Permanent Fund dividend (line 21 may not be less than 0)
Educator expenses (line 23)
IRA deduction (line 32)
Student loan interest deduction (line 33)

I was just assuming that a student probably just had W2 income, but yeah, if they have their own business or rental property or something like that that required schedule 1 then they would not qualify for simplifed needs.

@cshell2 so the student would need $49,999 or less income AND one of the following qualifiers:

  1. Qualifies for a means tested benefit

OR

  1. Is a dislocated worker.

And the student cannot file schedule 1?

@kelsmom is that correct now for qualifying for simplified needs test since the tax code changed?

It’s any of those 3 things. There is no AND. We qualify based on income and tax filing status only.

Got it! Hope the OP responds!

I haven’t have a job for the past 2 years so I would think that I would qualify for means tested benefit?