<p>Hi all. I applied for my senior year of FAFSA just now. For the last 3 years, my parents' income has been low enough that our EFC is usually about 70 and I get full Pell Grant. However, this last year I had the good fortune of winning $25,000 on Jeopardy, which I of course reported to the IRS. Consequently, my EFC went way up and my Pell Grant estimate went way down, like 1/4 of what I usually get. Nothing I can do about that, I guess, but I was just curious as to how much influence having a certain amount of money in your checking/savings account for that one particular question has on your EFC and Pell Grant estimate? Like, if I'd decided to deplete my bank account the day before doing FAFSA, would it have made a difference? I certainly hope I haven't screwed anything up for myself.</p>
<p>Thanks!</p>
<p>Congratulations on your win! It’s unfortunate that you put it in your bank account. Student assets are assessed at 20%. Had you put it in a 529, it would be assessed at the parent level which is 5.6% after a certain amount. (That certain amount, in the thousands, is called asset protection and varies based on parents’ marital status and age. So, for example, they may decide that your single parent can have $16K asset protection or your two parents can have $45K. They won’t even consider the $ until they have at least that much in assets.) </p>
<p>Does your school meet full need? If not, it may not matter much anyway.</p>
<p>Something does not add up. I would not expect you to be eligible for *any Pell with $25,000 student income. A dependent student has around $5000 (a little over) income protection. Anything over that (and allowing for taxes) 50% goes to the EFC. So say 25000-5000-2500 taxes = 17500 - I would expect your EFC to increase by about 1750050% = 8750 based on the impact of income alone. Then 20% of whatever you still have in the bank would also go to your EFC.</p>
<p>swimcatsmom, From the post, I think the student listed it as an asset and not income on FAFSA. I’m confused about this too because he must have received a tax form and filed taxes on it.</p>
<p>If that is the case then he has a problem. It is required to be reported as income.</p>
<p>uh-ohhhhhhhhh… </p>
<p>i hear the jeopardy music playing… LOL</p>
<p>I thought winnings from game shows, lottery, etc, are taxed at a much higher rate than income? He would have much less cash actually left after taxes on that, which could account for why he still qualified for Pell…</p>
<p>No difference in tax rate that I am aware of. Thought the untaxable part is probably lower as it is unearned income.</p>