<p>im having a problem with my financial aid. im 28 years old. first heres my story, i was self employed last year. i only made 17k and it was my only job last year. i filed my taxes to pay income tax, but my tax preparer used my mileage as a deduction. as a result i didnt have to pay anything.</p>
<p>fast forward to now...i applied for a pell grant(fafsa) to go to JSU. i applied independently. i got my award letter email today and they said i was not eligible for pell grant. (only offered student loan which i havent accepted yet.)
i called them and they said the reason is my expected family contribution is too high. the reason for that is they listed my total income as untaxable income. therefore im not eligible.
technically that is taxable income. i would have had to pay taxes on it. can someone tell me if this is right? can it be changed? i have to call the financial aid administrator tomorrow and see.</p>
<p>Log onto the Fafsa website and look at your SAR. Did they change it or did you file incorrectly? You can update it and resubmit but it’s unlikely that reclassifying income had anything to do with your EFC. </p>
<p>The income protection allowance for independent students without a dependant other than a spouse is only $7,000. Above that, your EFC increases at 50% of income. So, a $17K income would result in approximately a $5K EFC which is above the Pell cutoff of $4617. If you’d like to see it on paper, there are worksheets and table here:
<a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf</a></p>
<p>It is not to do with whether it is taxable income. Your income is too high for much in the way of a pell grant whether it is taxable or not (assuming you don’t have any dependents other than a spouse). All that paying taxes on it would do is that the tax paid is an allowance against the income when the formula calculates the EFC. This reduces the amount of available income when the formula calculates the income. If you did not pay any taxes then obviously you will not get any allowance for having paid taxes. But if you had to pay taxes then, well you would have had to pay the money out in taxes so would be no better off. </p>
<p>The maximum EFC for Pell eligibility for 2009-2010 is 4619. But to get the max Pell of $5350 your EFC must = 0. As your EFC increases the amount of Pell goes down until you have zero eligibility at over 4619 EFC.</p>
<p>One thing to check on your FAFSA is that you correctly answered the question about how much of your income was earned income. This number seems to be a duplicate of the AGI question but is not. It is used to calculate allowances for FICA taxes. Omitting this question means you would not get those allowances.</p>
<p>Other than that there is probably nothing you can change. Now if you do have a dependent other than a spouse come back and ask about the automatic 0 EFC.</p>
<p>i called fafsa and thats what they told me…untaxable income. my income technically is different.
i was self employed as a driver. so most of my money was spent on travel expenses. only a portion of that went to me as pay. my tax preparer just didnt use that as deductions. so my actual income was even less.</p>
<p>If you believe your tax returns are in error you should look into that. When you say you were self-emplyed and made $17K, was that the net profit after business deductions that went onto your 1040? If so, then that is what went into your AGI, which is the figure that FAFSA uses. Any errors along the way are really your responsibility to fix - FAFSA and the FA office can only work with what you give them!</p>
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<p>It isn’t. Untaxable income is treated exactly the same as taxable income in the EFC formula. Anyway your income was taxable income - you just didn’t owe any taxes on it. Two completely different things.</p>
<p>i understand. my tax forms are not in error, its that there are costs that i couldnt list. this is how my tax preparer told me would be best for me, and thats why i listed it that way. financial aid cant factor that in. i have to list my total income and i understand thats what they are basing it on. not all of that went to me because there were other costs like gas, food, etc. which took alot of expense.</p>
<p>anyway my point is i made 17k last year which is low income. ill make about half of that this year at my other job. and i cant get a grant? i was offered a student loan so i guess i will have to take that.</p>
<p>If you were the parent of a dependent student then that income would be low enough to get federal grants. But independent students do not get as much protected income as parents (about $7000 is this year I think) and any income over that 50% goes toward your EFC.</p>
<p>Aid for this year is based on income from last year. You could talk to the financial aid department of your school and tell them your income is going to be much lower this year and provide documentation proving this. They may or may not be willing to make an adjustment to reflect this. Some will, some won’t - it is at their discretion. It is only the school financial aid officer that can make such an adjustment - not you and not the people at the end of the phone at FAFSA.</p>
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<p>If you had deductible expenses that were not included on your Schedule C, then your taxes may not accurately reflect your net profit and therefore your FAFSA may not accurately reflect your income. I don’t know what your tax preparer did -was this a well-qualified person or just someone working at a tax shop? It just doesn’t sound quite right. I file a Schedule C every year and deduct all of my business expenses plus mileage for travel. Your gas expenses should have been offset by the mileage deduction, but that doesn’t cover meals, tolls, etc.</p>
<p>In any case, unless your income drops to $16K or so you’re unlikely to become Pell eligible.</p>
<p>I have a question about the Pell Grant. In my award letter it says I was eligible for a Pell Grant, but in the Swarthmore Financial Aid Handbook, it says “We do not fill the gap, however, if you miss application deadlines or if you fail to follow through with the Pell Grant application process.” Were we supposed to apply separately for the Pell Grant or something? I did get the grant, didn’t I?</p>
<p>There is no other application for the Pell other than FAFSA as far as I know (we have never done anything else). Do they have an online page where you can check your financial aid? Both schools we are involved with so.</p>
<p>If you have the Pell in your award and have done everything else they ask of you should be fine. For instance you may have to ‘accept’ your financial aid - my daughter has to go online and click and accept button for several aid items, though some are automatically accepted for her. Also if you were asked for verification documents such as tax returns you would have to make sure you provided them.</p>