Hello,
I just completed my fafsa and my SAR is higher than in the past. I am wondering if the fact that my answer to the question (44d) asking about student College Grants or Scholarships Aid reported to IRS is higher than previously entered. Does anybody know? THanks so much!
I didn’t think school financial aid amounts were included in the FAFSA calculations.
@BelknapPoint am I wrong about that…@kelsmom
FAFSA question 44.d. asks about tax exempt interest income that has been reported on IRS Form 1040 line 2a. It has nothing to do with student College Grants or Scholarships Aid reported to the IRS. However, FAFSA question 43.d. asks about “Taxable college grant and scholarship aid reported to the IRS as income.” Any amount entered here is subtracted from the student’s adjusted gross income (AGI). The higher the number entered for question 43.d., the more the student’s AGI will be reduced, potentially leading to a lower FAFSA EFC (not SAR).
@BelknapPoint is correct. If a student has to report scholarships & grants in excess of tuition & qualified educational costs as income on their 1040, reporting it on the FAFSA on the correct line will back it out of the formula (so it won’t increase EFC). If the OP incorrectly reported this amount for 44d, instead of for 43d, the EFC would rise.
Make sure you reported on the correct line.
Thank you, all! I entered it on the correct line, just wrote it incorrectly here. I’ll get back and check everything else. Her income was up from 2K to 5K last year (not including the Grant/Scholarship amount reported to IRS). Would that increase her EFC by 2K?
Thanks, again.
Yes, it could. Students are expected to contribute a much higher percentage of earnings to their education than parents are expected to contribute.
Thank you!
Income up to ~$6400 should be excluded from the formula. If she has any of this income in a savings account, that is included in the formula (20%) but shouldn’t make the EFC rise that much.
@BelknapPoint shouldn’t savings that is financial aid money NOT be included as an asset on the financial aid forms?
Correct, at least for FAFSA.