<p>My parents only make $50,000 a year. But our net worth is around $200,000. We invested a lot in mutual funds and stocks and save a lot. Is their any chance of getting any aid, considering the income is so low? Cost of living in Southern California is very high so $50,000 just doesn't cut it.</p>
<p>bump...i'm almost in the same exact situation</p>
<p>Yes, there is a chance. Only about 5-6% of parental assets are considered as "available" to pay for college. Go to one of the financial aid calculators (here on this site, or at finaid.org, or collegeboard.com), plug in the figures and see what comes out.</p>
<p>If your parents adjusted gross income is $49,999 or less and they file or are eligible to file a 1040a or 1040ez you will qualify for a simplified needs test which means assets are not taken into account. If their income is that it may be worth them looking into whether it would be beneficial to file the 1040a/1040ez (it may mean possibly losing some tax benefits)</p>
<p>Unless your parents qualify for the simplified needs test, they will most likely have to dig into some of those assets. After an allowance, it will be 5.6% of the excess. If they can open up a qualified retirement plan, Roth Ira, etc, those assets can be sheltered. Otherwise they will be hit with that % every single year. That's just the way it works.</p>
<p>simplified needs only applies to FAFSA, not Profile though, right?
if they see 1099s, interest etc., even with simplified needs, do they ever look into assets if they see high interest, earnings from dividends, etc reported?</p>
<p>Yes simplified needs is just FAFSA. Profile digs a lot deeper.</p>
<p>They do not have to file the 1040EZ or 1040a to qualify for simplified needs. They just have to meet the critieria to be eligible to file for it. If they fall into the catergory where they are not eligible, they would have to simplify some of their holdings to a point of eligible for those forms,but then they may lose other monetary benefits all for some more fin aid eligibility. Someone has to run the numbers to see if it is a beneficial move.</p>
<p>thanks everybody :)</p>
<p>wecandothis - the important things for simplified needs are the total AGI on your tax return and the eligibility to file the 1040a/1040ez. </p>
<p>1099s/interest etc are included on your tax return so they would not look at them differently. But some unearned incomes may mean you cannot file 1040a or 1040ez. For instance with over $1500 in interest you cannot file 1040ez. Another example is that any taxable state tax refund (my pet peave as we were unable to get simplified needs because of it :( ) means you have to file a 1040. The formula seems fairly rigid which may be beneficial to those with high assets and low income and detrimantal to those that cannot file the 1040a or 1040ez for whatever reason - whine whine whine ;) . Whether they are eligible to file these forms are tax questions (so by definition complicated) that your parents will need to figure out.</p>
<p>pages 3 & 4 details the criteria for simplfied needs (FAFSA only)</p>
<p>I think that the reason that the simplified needs test sets eligibility based on the 1040a/1040ez is simply that people with a substantial amount of assets ordinarily are not going to be able to use those forms, because of income from sources like interest or capital gains. Unless the family puts their money in a mattress, once they hit a certain threshold their tax situation is going to get a little more complicated. </p>
<p>As to the OP: based on the figures you provided, as a very rough estimate your family's EFC will probably be around $11-$12,000, with around $9000 attributable to the assets.</p>