Hi everyone, this is the first time helping our son do his fafsa, as we have never done one in the past, he is a senior this year. We tried using the data retrieval tool …several times…and it wouldn’t work. So I had to manually input everything. Two things threw me for a loop. First was the question about “adjusted gross income”. It said to use the income listed on our form 1040 line 8b which I did, however I was under the impression that it would use our income amount after the standard deduction (line 9) was subtracted to calculate our EFC and aid amount. Does it take the standard deduction off the gross I reported in the formula used when they process fafsa or did we enter the wrong amount from our tax returns?
Another thing that bothered me was that I was never asked about cash, checking balances on hand etc. In the parents financial section. Only in my son’s financial section was it asked. The form ended with no more financial questions after asking if our “total assets exceeded $7,300?” On the summary page before signing, it showed those questions but they were greyed out and not clickable.
Hoping someone can ease my mind on these two things…and that we didn’t do it wrong. ?
No, FAFSA uses AGI, as the instructions indicate. The standard deduction is just a tax policy thing. Subtracting a standard deduction from your AGI doesn’t mean that you don’t have that money to help pay for a child’s college. It means that money won’t be subject to income tax.
It sounds like you qualified for the simplified needs test, which causes assets (like cash on hand and checking account balances) to be ignored.
Thank you so much @BelknapPoint ! I appreciate you replying. My husband was working when we were filling it out so of course he questioned if I had done it correctly, lol. I feel better…sounds like I did. We will be full pay (although he should qualify for Cal Grant) but I think he was hoping that wouldn’t be the case.
@thumper1 i didn’t look into all the qualifiers yet, but his grades are there and hoping we are under the income ceiling for Calgrant. At least that would be a little something that will help since it looks like there won’t be any federal aid other than loans which we don’t really want to do. That would be last resort.