FAFSA: Postdoc and Grad Fellowship Income relevant to EFC?

Paying for College
1

Hi -

My wife is starting a new degree program next year. She has been a Ph.D. student for the past several years, and will finish that degree this year before starting the new one. For part of the year last year her pay came from a ‘fellowship’; part came from working as a T.A… I have my Ph.D. and have been a postdoc with a large federal agency for the past two years (paid, but classified as a trainee, rather than an employee).

Because our incomes come largely from ‘fellowships’, I’m confused about how to compute our income for EFC. Both fellowships are taxable AFAIK; mine comes from the government and is reported on a 1099G as a ‘taxable grant’; hers is from a prviate university and is self-reported on tax forms on the ‘wages’ line with the qualification ‘SCH’. I’ve seen some sources that suggest that this income will not count for EFC. Two questions: (a) is that correct? And (b) if it is, does that mean we will not need to count our assets, either, since our income outside these fellowships is well below the 50,000 threshold? Or, rather, is that threshold based on the AGI from our tax return, which includes these source of fellowship income?

Thanks

2

Why do you need an EFC? Are you proposing to borrow some grad loans? Or, is there an undergrad student in your family who is looking for need-based aid?

3

Thanks! Maybe I don’t know how EFC works. My Wife is starting a new grad program next year, and will only have a partial scholarship. We’re not looking for loans or federal aid, but isn’t FAFSA EFC also used to compute need-based aid from school and foundation sources? If not then you’re right, this is a moot point.

4

For a graduate/Ph.D program, you are likely looking at loans only to cover the rest of the costs that aren’t covered by the partial scholarship. Your EFC wouldn’t matter in this case.

5

For tax purpose, fellowship was reported as other income (without W2). I had that for a few years. It will show up in the AGI in the end.

6

“We’re not looking for loans or federal aid, but isn’t FAFSA EFC also used to compute need-based aid from school and foundation sources?”

This would be a good question to take up directly with the universities where you both are studying, and with the foundations that either of you would apply to for support.