Financial Aid FAFSA question

[elixirspring]

<p>Alright so my EFC for this incoming year was relatively high, and it was mostly attributed to my parent's assets. I've come to understand that if your parents make less that $50,000 the FAFSA doesn't take your assets into consideration, is this true? If so if my parents were to make below this (we're barley above this number by a few thousand) would my EFC score for my sophomore year in college decrease dramatically? PLEASE HELP I need to know if this is how things work, it would make a difference in what school i would attend!! </p>

[annoyingdad]

<p>AGI below $50k is only half of the requirement for the simplified needs formula which doesn’t count assets. The other half is meeting one of these requirements:</p>

<p>

Anyone included in the parents’ household size (as defined on the FAFSA) received
benefits during 2012 or 2013 from any of the designated means-tested federal benefit
programs: the Supplemental Security Income (SSI) Program, the Supplemental Nutrition
Assistance Program (SNAP), the Free and Reduced Price School Lunch Program,
the Temporary Assistance for Needy Families (TANF) Program1, and the Special
Supplemental Nutrition Program for Women, Infants, and Children (WIC); OR
the student’s parents:
• filed or were eligible to file a 2013 IRS Form 1040A or 1040EZ,
• filed a 2013 IRS Form 1040 but were not required to do so, or
• were not required to file any income tax return; OR
the student’s parent is a dislocated worker.

</p>

<p>See page 4 here:</p>

<p><a href=“http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf”>http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf&lt;/a&gt;&lt;/p&gt;

<p>How much your EFC would drop depends on how much your parent’s assets are. Parent assets are only assessed at 5.6% of the amount of assets above the asset allowance. The asset allowance is shown in Table A5 on page 19 of that link.</p>

[thumper1]

<p>One thing you need to consider is whether YOUR college guarantees to meet full need for ALL of its students. If te school does NOT, a drop in your EFC won’t guarantee an increase in your need based aid (unless you become eligible for a portion of the Pell Grant…but to,get the WHOLE Pell of $5600, your efc would need to be $0… And it would NOT be $0 with just under $50k in income).</p>

[4kidsdad]

<p>I find the requirement of filing 1040A / 1040EZ is a major road-block to simplified needs formula. See <a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid;

[annoyingdad]

<p>Well, you can’t itemize for the current year but also if you itemized the year before and have to include a state tax refund in income you still can’t file a 1040a for the current year. I think that one gets a lot of people. </p>

[thumper1]

<p>To the OP…it also doesn’t sound like your family will be eligible for any of the means tested benefits (SKIP, free/reduced lunch, etc). If you have unearned income above a certain amount…I also believe you must file a 1040 long form (I’m not a tax expert…I’m sure someone will correct me if I’m wrong). But if the assets generate a HUGE amount of interest, than this could be an issue as well.</p>

<p>When you say your parents have a LOT of assets, what do you mean?</p>

[annoyingdad]

<p>No, there is no separate limit on interest/ordinary dividends beyond the AGI/taxable income limits which the OP’s family doesn’t exceed if they are close to $50k. Over $1500 of either requires attaching schedule B but that can be done with the 1040a.</p>