Question with Financial Aid and Outside Support

Paying for College
1

<p>Okay, so I filled out the FAFSA and I was eligible to skip the questions about my parent's income and my own income because in my 2010 tax returns, my income is negative, and my mom is on disability; so she doesn't have to file. </p>

<p>In 2010, my grandma, on the other hand, gave me around 4000 cash and I also bought a car in 2010, which at the time I could afford, but when my business fell through, I was getting behind and since she was a cosigner on the car, she called up the bank and paid off the whole thing (Roughly 18,000 at the time.) I was able to skip these questions, which would be the question 44a-j with J being "Money Received or Paid on Student’s Behalf:"</p>

<p>Now I got a verification and a form titled dependent verification worksheet from my community college. On this form, along with asking for my tax returns from 2010, and my parent's income information are asking for my untaxed information. The question says this:
"Funds received for child support and other untaxed income. (See question 44 of the FAFSA).
Then has a table to fill in child support, workman's compensation, and Untaxed pensions. </p>

<p>The car was in my name but she called the bank and wired in the money to it, and the 4,000 cash was wired as well when I needed rent and food money but I was not in college at this point. So, does the money she paid for the car with + the 4,000 cash have to be put into the "Untaxed Pensions" section of this worksheet as 22,000? And if so, with my community college expected costs being roughly 17,000, will I be eligible for grants because before they asked for this, my efc was 0 and I was eligible for everything but now I am concerned. </p>

<p>**Also, on an unrelated note, for the next year, 2011, she has been giving me some money on a monthly basis to pay for rent, food, etc. Will I put this amount on verification as well? </p>

<p>And, how does the outside aid affect eligibility? If the cost is 17,000 and I received the 22,000, will I get no eligibility, or is only a percentage of the 22,000 counted against the "need of the student". I guess what I am asking is need is determined by "Cost of attendence(17,000) - EFC ( 0 at the time, but what does the 22,000 do to this ) = need. </p>

<p>Sorry for it being so long. Thanks for any help you can give.</p>

2

<p>Anyone have any knowledge on this subject on this forum?</p>

3

<p>So, if I understand correctly, you are filing your FAFSA without providing information about your parents’ income and assets… so you are independent for FAFSA purposes?</p>

<p>I don’t see how a “negative” income and a mother on disability gets you to independence for FAFSA – but it sounds like that’s what you’re saying.</p>

<p>I don’t think the financial assistance you’ve received from your grandmother would show up in the question about pensions. More likely it would show up in the question about “student’s other untaxed income or benefits.”</p>

<p>Untaxed “income” to a student – which is what this is – is hit pretty hard in the FAFSA formula for dependent students, but not sure it’s so bad for an independent student.</p>

<p>Have you tried running your numbers through an online FA calculator to get an estimate?</p>

4

<p>No, I am considered a dependent, not an independent. The reason I could skip the questions was because of my income + my mother not filing(because of disability), so it gave me a question to skip over questions that dealt with “untaxed income”. So on the fafsa, I was able to not put in the help my grandmother gave me, but now the school wants that information through verification.</p>

5

<p>Okay, that makes sense. Then, yes, the untaxed income from your grandmother will likely have a negative effect.</p>

<p>The basic formula for student income is:
Income, minus taxes, minus a $5250 proteced income allowance = Available income
Available income times 50% = Student’s contribution from income.</p>

6

<p>Did you qualify for the auto 0 EFC? It sounds like you did, based on the fact that you were able to skip all that data. In that case the money from your grandmother will have no affect on your EFC at all. That is the whole point of the auto 0 calculation - it ignores all other data. So as long as you actually qualify for the auto 0 (parent AGI $30,000 plus one of the other qualifiers - parent files a 1040A or EZ or is not required to file, or someone in family receives means tested benefits, or parent is a dislocated worker) then the untaxed income has no impact. Even if they require the information through verification, it does not change the EFC formula.</p>

7

<p>I did not know that, Swimcatsmom. I knew a 0 EFC allowed you to skip reporting assets, but didn’t realize it also allows to you to not report untaxed income.</p>

<p>That should be a great help to the OP.</p>

8

<p>^ Well, the auto 0 allows you to skip the student income section- so wouldn’t that include untaxed income as well? I was never asked whether or not I had untaxed income because of auto 0.</p>

9

<p>The auto 0 may or may not allow you to skip the data - it depends on the state. Our state does not allow you to skip any of the questions (no idea why as the small state grant is based on an EFC of 1700 or below and does not take assets into account as far as I know). Once the formula determines that a student is eligible for the auto 0 based on parent income and meeting other criteria, it stops there. It ignores all other data (whether reported or not) - that includes assets (parent and student), untaxed income (parent and student), and student taxed income.</p>

10

<p>Thanks for the replies, but I’m still a tad confused on one point. I CAN skip all the questions on the FAFSA site about mine and my parent’s income as I DO qualify for auto 0 efc.
My main question is on what swimcatsmom said in regards to the untaxed income not effecting the efc.I understand it ignores all other data on the FAFSA, but what if my school in California gets that information, can they change my efc even though the government/FAFSA has already made it auto 0? Or are they just wanting to make sure it’s actually auto 0?</p>

<p>Because one thing is for sure, they are definitely asking me for untaxed income on the form they gave me and specifically referred to the question on FAFSA dealing with untaxed anything including gifts/paid on my behalf, which my car certainly goes under, and I am not gonna lie to the government :P</p>

<p>So, I 100% have to report the income, but I am wondering that if my personal and mother’s income checks out - will my efc stay 0 or will they change it based on grandmother’s aid?</p>

<p>Tried to make that clear enough. Thanks.</p>

11

<p>They are just verifying that the information you have provided is accurate. The form is probably a standard form the school send out for verification purposes. We have been verified several times and are always asked for the same information. </p>

<p>If you do qualify for the auto 0 EFC, the school cannot change the FAFSA EFC to something different.</p>