<p>Can someone explain these two concepts to me? And how much is protected? My S doesn't have assets but he does have earned income and will also show Social Security income. thanks....this is a great forum!</p>
<p>Dependent students don’t have any asset protection. 20% of a dependent student’s assets go to the EFC.</p>
<p>A Dependent student has $5250 income protection. 50% of income over that amount goes to the EFC. Untaxable SS income is not reported on FAFSA.</p>
<p>Parents have income protection based on the number of family and the number in college. For instance a family of 3 with one on college has around $20,000 income protection. For amounts over that, from 22% to 47% goes to the EFC (more as income goes higher). Parents also have some asset protection based on the number of parents and the age of the older parent.</p>
<p>For lower incomes there are also 2 special formulas. Incomes below $50,000 may qualify for the simplified needs test where assets are ignored. Parent incomes below $30,000 may qualify for the Automatic 0 EFC, where the EFC is automatically set to 0.</p>
<p>^ I believe the Auto 0 income limit was raised to $31K (AGI) for 11/12.</p>
<p>Yes, you are right, it is $31k. Force of habit.</p>
<p>Man, I should retire, and then we can do that simplified-needs thing! Seriously. I have soooo much to learn, and so little time to learn it in…hoping to submit FAFSA tomorrow morning.</p>
<p>it’s not just income for the simplified needs test. You also have to meet some other criteria such as being eligible to file a 1040a or ez, or being a dislocated worker etc. Just being retired and having an income under $50k is not enough.</p>