<p>I'm kind of frustrated right now. After my parents submitted the 2007 tax returns, I had to adjust the income numbers a bit. At first my EFC was 0. I entered the new income numbers, which were barely any higher than the original ones, a difference of about $3000 for both parents, and the EFC shot up to 18,005! </p>
<p>My dad lives overseas and needs his own money to support himself. He doesn't send the money over to our family here in America. It's not the same, and the EFC value doesn't appear to consider that.</p>
<p>When my sisters went to college the EFC was 0, and it was originally 0 when I filled out the FAFSA for the first time, and now it's 18,000! I'm just wondering if there's something wrong with the way they calculated it. </p>
<p>By the way, what's the difference between "Adjusted Gross Income" and "Earnings from Work"?</p>
<p>Could be several things. When you originally submitted FAFSA was the income below either $50,000 or $20,000 and did you say the tax return filed would be a 1040A 0r 1040ez? And when you changed it did the income go over one of these thresholds or did the income tax return type change to something other than a 1040a or 1040ez?</p>
<p>The above circumstances generate either the simplified needs test (below $50,000 with 1040A or 1040ez) where all assets are ignored in the EFC calculation. Or the automatic zero EFC (below $20,000 with 1040a or 1040ez) where the EFC is automatically zero (which can mean certain things that could otherwise have a high impact on the EFC like certain untaxed income, students earnings and assets do not have any impact). </p>
<p>A change in these items can make a significant difference to the EFC. For instance if there are significant assets then losing the eligibility for the simplified needs test would mean those assets are now taken into account. Losing the elgibility for automatic zero EFC would mean any untaxed income (such as social security income) is now taken into account and parent assets and student assets and student income will also be taken into account.</p>
<p>Adjusted Gross Income includes all taxable earnings reported on the tax return - earnings from work, interest income, dividend income, taxable scholarships etc. Earnings from work means just that - earnings from work - a job. On FAFSA this is used 2 ways. If there is not enough income to require a tax return then the earnings from work represent your taxable income. If there is an AGI figure that is used for taxable income. Mostly the earnings from work figure is used to calculate an allowance for social security taxes (usually earned income X 7.65% of income). FAFSA uses actual taxes paid for federal taxes but gives an allowance for State and social security taxes based on tables in the formula. No idea why it is done that way rather than using actual figures paid.</p>
<p>If none of the above apply is it possible you made an error in entering your numbers? Go over it carefully. Good luck.</p>
<p>
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My dad lives overseas and needs his own money to support himself. He doesn't send the money over to our family here in America.
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You're right - the EFC doesn't care. Nor should it. It cares only whether your father can afford to help, not whether he will. Many kids with separated/divorced parents (heck, many kids with married parents) face the situation in which one or both refuse to help. Generally, you're out of luck.</p>
<p>Without seeing the numbers, it's impossible to say why your EFC increased. As usual with her advice, swimcatsmom is on target for where to start.</p>
<p>My dad's income was a bit over 50,000 both times, and my mom's income jumped from slightly below 20,000 to over 20,000. I think that's the only thing that changed.</p>
<p>With income of $70,000 there is no way your EFC would normally be zero. Generally it takes an income below $20,000 to generate a zero EFC.</p>
<p>As your Dad is earning his money overseas is it untaxed in the US? (I know there is a foreign income exclusion of some sort that is reported on a different tax form to the 1040 series). If that is the case the only thing I can think of off the top of my head is that with your Mom's income being in the USA and being under $20,000 you may have originally qualified for the automatic zero EFC if your Dad's income is untaxed (and reported on one of the worksheets instead of in the AGI) and you said you were filing a 1040a or 1040ez. When your Mom's income went over $20,000 you no longer qualify for the automatic zero EFC then everything - including your Dad's income and any parent assets and any student assets and income are taken into account. I may be completely off base there but that is what comes to mind as I think it is the AGI that triggers the automatic zero EFC rather than the total income. To be quite honest a bit of a flaw in the system if it is the case as a $70,000 income should not give you a zero EFC. </p>
<p>On its own an income of $70,000 would not generate an EFC of $18,000 so there must be parent assets and/or student assets/income as well. Though an AGI below $50,000 should exclude assets if a 1040a or 1040ez was filed.</p>
<p>After checking I think if you file for the foreign tax exemption your parents are ineligible to file a 1040a or 1040 ez as the foreign tax exclusion has to be reported on a 1040. If that is the case and you originally put that they were filing a 1040a or 1040ez FAFSA probably mistakenly calculated that you were eligible for an automatic zero EFC then when you corrected the FAFSA and put the 1040 return it made the correct adjustment that you were not eligible for the automatic zero EFC. </p>
<p>According to the finaid.org EFC calculator Parent income of $70,000 where $50,000 is untaxed in the US would generate (assuming 3 in the family and 1 in college) an EFC of around 16,700. The remaining difference would bee from parent assets or student income/assets.</p>
<p>So did you originally put that your parents were eligible to file a 1040a or 1040ez? If so that was the error that produced the zero EFC and the current one is probably correct.</p>
<p>I am not a financial aid advisor or a tax expert so you should check with the appropriate expert for all the above.</p>
<p>My mom filled out the 1040A, and my dad filled out the 1040 and the Foreign Exclusion, so I'm not sure if my dad is eligible to file a 1040A or a 1040EZ or not. Do you know? </p>
<p>In my correction I said that my parents were eligible to file a 1040a or 1040ez, and I got the $18,000 EFC. Something tells me that my dad wasn't eligible for 1040A or 1040EZ, because 1040A is supposed to be through the US Federal Individual Tax return, and he doesn't live in the US.</p>
<p>Okay, I redid the FAFSA, really to the best of my ability, as accurately as possible (the only thing that's missing is that it doesn't include parents' total of cash, savings, and checking accounts. On the FAFSA it's given as $0. How will that change things? Apparently the new EFC is about 14,000.</p>
<p>Will colleges take into consideration the fact that my dad lives in Hong Kong and uses his income to provide mainly for himself, out of necessity?</p>
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<p>it doesn't include parents' total of cash, savings, and checking accounts.>></p>
</blockquote>
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<p>It depends on what those assets amount to. You need to include them on the FAFSA for an accurate EFC number. The bottom line is your parent's assets are supposed to help pay for your college education.</p>
<p>I do not think that the FAFSA considers maintaining two separate households in the equation.</p>
<p>Perhaps you could contact the Financial Aid office at the school you will be attending (or the ones you are considering) to see how to file a special circumstances form. Then you could explain the need two maintain to households. See what the colleges come up with.</p>