<p>There are 3 questions on the FAFSA form that asks about your assets. For example, one of them is "As of today what is the student's total current balance of cash, savings, and checking accounts?". The other two are about your investments and such. When I filled out this form last year, I was given the opportunity to not answer these questions. But for some reason, I have to answer them this year. I read somewhere on Yahoo Answers that these questions a NOT optional...but then why did I have the option to not answer them the last times I filled out FAFSA. I conversed with some friends about this, and one of them said that she doesn't need to fill that section out. She was given the question about whether or not she wants to answer it. I know each family is different, but my friend and I are in almost the same circumstances. We're both dependent. The only difference is that her family has 3 members; mine has 2. Her family probably makes a little more money than mine, and she also has a job herself. I don't have a job, and my mom is a widow. </p>
<p>So, I guess my question is if this question is "not optional", why was she asked if she wanted to answer it or not this year? And why am I forced to answer them (I can't move on to the next page without answering) when I didn't have to before?</p>
<p>Some people qualify for a thing called the simplified needs test where assets are disregarded and do not have to be reported. The requirements for simplified needs are parent AGI below $50,000 plus meeting one of the other criteria such as being eligibile to file a 1040a or 1040ez tax return or receiving means tested benefits such as free lunch or being a dislocated worker. My guess is that last year you qualified for simplified needs so were not required to report assets and this year you do not qualify so are required to report assets. If you are required to report them then you must do so.</p>
<p>that seems to make sense…but our AGI is below $50,000. I used to get free lunch in high school, but they don’t really offer free lunch in college anymore…and I also didn’t have to put anything about those benefits last year either. For the 1040a thing, I put “Don’t Know”, which is also what I said in the previous FAFSA forms. I still don’t really understand why they’re having me filling out the assets part. My situation is pretty much similar to last years…</p>
<p>Something must have changed in the way you answered the qualifying questions compared to last year. Did your parents file a 1040a or 1040ez last year and not this year? If so then that along with the AGI below $50k would have qualified you for the simplified needs test without the other questions.</p>
<p>Well last year (like this year too), my mom already filled out and completed the 1040 tax form, so I don’t think it was that. I’m not sure if she qualifies for the 1040a, but for last year and this year, I put the same answer about whether or not she qualifies ("Don’t Know). The only thing that is a little different this year are some of the numbers which increased a little, but still in no way exceed $50,000.</p>
<p>By the way, I really appreciate your help! I just don’t understand why it’s changed when my circumstances really haven’t.</p>
<p>Well I could have opted out on answering these questions about reporting assets and I stupidly reported them anyway. I put that my daughter had $3,000 in her bank account. Now my EIC is $2,200 more than last year…could this be the reason why? I didnt think it would make much difference. Also I have one less dependent, can this make that much difference? Can I claim my son as a dependent even if he files his own tax return as an 'independent". He did live at home part of the year last year (I know should be at least 5 months)? Thanks for any help. Yikes, I thought since we made less money this year that my daughters financial aid would be more not way less.</p>
<p>jamjar, since you were given a choice not to enter assets it’s likely that you qualified for the Simplified EFC formula, under which all assets are excluded from the calculation. You did not qualify for the Automatic 0 EFC, which requires an AGI under $31K. Answering the optional asset questions did not increase your EFC. You may want to look at the worksheets/tables in the EFC Formula Guide for more insight into how the EFC is calculated.</p>
<p>skr8mom,
Thanks for your info. Looks like we just made over the $31,000 bummer. Yes, my son only lived with us for 3 months that year, and then moved out. Family household is for that same tax year right? I believe the criteria is at least 5months in the house, but of course who knows that!!</p>
<p>Well, having one less in the household and $3K in student assets will affect the EFC…though the student asset question was optional so that won’t cause an increase for you. Having fewer household members decreases the parent’s income protection allowance by a few thousand, which in turn increases the AAI…but if your AGI is under $50K, less that 30% of that increase will show up in the EFC. Is it possible you made an error on the FAFSA filing? If not, you might want to work through the EFC formula manually to see what is causing the increase:</p>
<p>sk8rmom
Thanks for your help…Yes it doesnt make sense that it went up that much just because of one less dependent, thats why I was shocked.
It doesnt appear that I made an error…how do I work through it manually to find the increase?
One way I have discovered to lower my AGI to under $31,000 is to put some money in an IRA…however!
Can it be to do with the school, as my daughter has just transferred, its nothing to do with that at this point right?</p>
<p>sk8rmom
I may have found part of the problem…my daughter earned about 8,000 in income from her job. They must be including this also as income.
However, I did do it manually and it doesnt make that much difference between 3 or 4 dependents, nor if I put income in at under $31,000. I am assuming its that extra money my daughter made.</p>
<p>Yes, that would definitely make a difference. Students have a fairly low income protection allowance, as you can see on the worksheets in the formula guide, and then 50% of their income is assessed toward the EFC.</p>
<p>yes thanks, i do think that must be it. Thanks for all your help.
Although when I tried the different EFC formulas, none of them came out the same as the fafsa I submitted, and they were all vastly different, alot higher infact. Do you recommend one to use?</p>
<p>if you can bring your AGI below $31k (IRA contribution?) and can file a 2010a or ez (or meet one of the other qualifiers like free lunches), you would be eligible for the auto 0 EFC and your daughter’s income would be disregarded.</p>
<p>Not sure where that number is coming from…worksheet A show a dependent student has income protection of $5250, plus allowances for taxes.</p>
<p>Swimcatsmom, wouldn’t the IRA deduction just be added back in as untaxed income when she answers question 92? Or is that question skipped if the qualifiers for Auto 0 are met?</p>
<p>Assuming things have not changed since last year, in every other case IRA deductions are added back. But for qualifying for simplified needs and automatic 0 EFC it is the AGI that counts. So for simplified needs an AGI below $50,000 (and meeting other qualifiers) would cause the assets to be ignored, though the contribution would be added back to income for calculating the income generated part of the EFC. For auto 0 EFC if the AGI meets the income criteria (and other qualifiers are met), the calculation stops there. Kind of a little loophole there, though most people with an AGI that close to $31k would probably find it hard to contribute to an IRA.</p>