<p>Hello,
I was just wondering if the FAFSA would OR would not consider a dependent student's assets as far as determining their EFC AND qualifying for the simplified needs test if both the parents and the student could qualify to fill out a Form 1040 A tax return and the parents income was under $50,000. I think the parents would be exempt from asset reporting and qualify for the simplified needs test but how about the 18 year old student still living at home. Does he have to report his assets if he files a federal tax return? Is that the trigger? The Federal Tax Return??</p>
<p>He doesn't have that much saved, but I didn't want it to be used against him year after year to decrease his financial aid because he had saved or grandmother had given him a little money. Maybe he should buy the car we just let him use every day to go classes, it's just like his anyway. It is never available for anyone else to use. Thank you.</p>
<p>CONTINUED: I know he would report his salary that he earned for the year, but how about any money in the bank, etc. Is there a ceiling that the pell grant considers as an amount being sheltered in assets, or is all the students assets apart from his salary at his job assesed at 20% against him. Or do you not have to report the student assets if the parents meet the simplified needs test, by filing out a 1040A Tax form and making under &50,000 a year. </p>
<p>I am asking for next year, as I think I already made a mistake this year. We filled out a 1040 even though we qualified to fill out a 1040A, and my son didn’t have to file a tax return, but next year he will have to file a tax return. Thank you.</p>
<p>It is the parent tax return that is important for the simplified needs test. If the parent falls within the income limits (<$50,000) and can file a 1040A then assets are ignored, including student assets. It does not matter what type of return the student files (I think it did up to 3 or 4 years ago)…</p>
<p>The Pell grant is completely based on the EFC. The Pell requires an EFC of 4617 or less. The EFC is calculated based on parent and student income and parent and student assets (unless eligible for the simplified needs test).</p>
<p>Student income has some protection - the first $4500 is not considered. After that 50% goes to the EFC. A dependent student (most students under age 24) has no asset protection. But the assets are ignored if you qualify for simplified needs.</p>
<p>Unless the FAFSA tells you you can omit assets then you must report them. Even if you are eligible for simplified needs you may be asked for assets. We are elgible for the auto 0 EFC but always have to report assets as our state requires it.</p>
<p>Thank you so much Swimcatsmom.<br>
Hello,
If I already mailed the student and parent asset information to the College Financial Aid Office as the Financial Aid Office said I had to,-- Can the college use the assets to raise the EFC?</p>
<p>I have proof that I could have filed a 1040A. We filed out a 1040 to report election inspector income and the schedule L for a tax deduction for tax on a new car purchased in 2009. Both of the above reasons-according to the IRS website- could have been filed on a 1040A. Those were the only two reasons, and we make under $50,000/year. </p>
<p>Can the College still raise the EFC, now that they have a record of the assets. The supervisor at financial aid at the college said the EFC could change. Another financial aid person at the college said it couldn’t change as we made under $50,000/year. Thank you.</p>
<p>Oh,There is one thing I didn’t mention. The Fafsa said I COULD omit the parent and student assets, but the Financial Aid person at the college said that the Schedule L for reporting the tax deduction on the car was itemizing so that’s why the system was triggered to ask for assets for parent and student. Our State, NYS, doesn’t ask for assets automatically. The financial aid department might have made a mistake, saying we couldn’t file a 1040A. </p>
<p>The financial aid person said I should have said NO on the Fafsa, so the college could have changed it to YES-----------Regarding Could you have filed a 1040A.</p>
<p>The deduction for the taxes on a car can be reported on a 1040a, line 24. It is not itemizing. So that should not make you ineligible.</p>
<p>I always make sure I actually file a 1040A so as to avoid this sort of situation. The tax software programs seem to automatically file a 1040 so I have to make them do a 1040A.</p>
<p>Thank you. I was thinking of calling them, but didn’t know if I should. Your last post has given me the encouragement I needed. It may be too late if I wait to see if the EFC changes after they see the student assets that are not sheltered in any way. </p>
<p>So, I quess they can now use the student assets I sent them in the mail to raise my son’s EFC, because they have them in their possession and they have us down as filing a 1040 and unable to file a 1040A. It doesn’t matter that we make under $50,000 as the financial aid persons told me. They can still use the fact that they said I couldn’t file a 1040A even though I could, to raise the EFC. Is that true? They said I could just put down all 0’s, they just needed the assets form in case the college was audited. I am so confused by the college financial aid. </p>
<p>I thank you so much for all your help. Every thing you told me is going to greatly help our family in the up coming college years. I was going to have my son spend the money he had instead of saving it for his senior year, or if Pell doesn’t pay that much of his tuition. Also he can work and not worry about that, although he was going to continue his college job and is still looking for a summer job.</p>
<p>I will have to figure out the FAX tonight so I can be ready to send them the 1040A instructions page 34 and the 1040A form line 24, I think. Thank you</p>
<p>Thank you Swimcatsmom:
Well, due to your expert advice and more than generous giving of your time to me, my son does not have to have his parent and student assets used in figuring his EFC. </p>
<p>After calling the School Financial Aid today, and using line 40a on the 1040 Form, as you suggested, and stating that we did not itemize deductions, and that they had a copy of our tax transcript. Both the itemized deduction and standard deduction are on the same line on the 1040. I said there was no Schedule A attached to our taxes itemizing deductions. </p>
<p>I checked back on the school Financial Aid Website and the request for student and parent assets was cancelled. They are also mailing our parent and student assets that I sent them back to us. </p>
<p>I can’t believe it. Thank you so much. clbmom</p>
<p>Great news! I am so glad you got it all sorted out.</p>
<p>I dreading when they “simplify” FAFSA (possibly next year) because no one (us or FA officers) will understand what is going on. Wish they would wait another year till we are through with FAFSA till they change it.</p>