<p>I read that if your parent's income is below 50,000$ you will have to fill out the Simplified Needs Test and assets will be ignored?</p>
<p>Well, my mom is self-employed and only works to buy food or whatever. My dad makes around 25k a year and he said that he includes my mom's "income" on the taxes as a few thousand a year. Anyway, their adjusted income is less than 50,000 a year..like 30-40k . Does that mean our assets are ignored? My dad works in a different state so lives in a different house than my mother, my siblings and me. </p>
<p>I am asking because I would think that the assets should include both houses which will bring up my EFC (If I'm right?) but I read about the Simplified Needs Test on finaid. Basically what kind of EFC will I expect?</p>
<p>To qualify for the simplified needs test your family’s AGI (adjusted gross income) must be less than $50,000 a year AND you need to file a 1040A or 1040 EZ tax form OR you need to have received one of the means tested benefits (food stamps, free lunch, etc). </p>
<p>I’m pretty sure self employed folks cannot use a 1040 A or 1040 EZ tax form. Someone else will have to verify this. If that is indeed accurate, your family would need to have received one of the means tested benefits to qualify for the simplified needs test. Any chance you received free or reduced lunch benefits or the like?</p>
<p>If you qualify, you don’t need to fill anything else out. You will answer questions on the FAFSA and if you qualify you will not be asked to provide your asset information.</p>
<p>When you fill out the FAFSA there will be a series of qualifying questions which will then determine whether you qualify for the Simplified EFC formula or not. Having an AGI under $50K is one of the qualifications, but your parents must also meet another qualifier. The qualifiers are being eligible to file 1040A or EZ; a household member qualified for a federal means tested benefit (food stamps, TANF, reduced/free school lunches) within the past two years; or one parent being a dislocated worker. If your answers indicate that you would qualify, the asset questions will be optional for FAFSA (although your state may require you answer them to receive any state aid).</p>
<p>So both of my parents would have to qualify for the 1040A/EZ? I think my dad qualifies but like you said my mom doesn’t because she is self-employed. And yes, I have received free lunch but I cannot remember if it was Freshman or Sophomore year. I am still eligible for it but I didn’t have free lunch this year or last year because the lunch at my school sucks so I just bring some snacks from home every day…would I be able to fill out a free lunch form now or something?</p>
<p>You can request the form from your HS but I’m pretty sure the income qualifiers can be found online if you want to check to see if you qualify first.</p>
<p>Even if you don’t qualify for the simplified formula, it may not make that much of a difference depending on how much equity they have in the second home. Your primary residence is not an asset for FAFSA. If your dad owns the house in the other state, the value of that asset is current market value less debt (mortgage/home equity) against it. Parents do have an asset protection allowance, based on the age of the older parent, so if they don’t have a lot of other savings then that’s available to reduce the equity in the second home. Finally, parent assets are only assessed at 5.6% for FAFSA.</p>
<p>Hmm, actually I forgot to include something in my OP. The house in the other state is not under my dads name, it is under my aunt’s name (they live together). So is that included as an asset? AND, we have a small house that we do not live in but random people live there and pay rent…so I’m sure that is an asset? Not sure what equity is…</p>
<p>As for me, I do not have a job or any income but my dad opened up a bank account for me (not sure if its on his name or mine) that has like 5000$ in it.</p>
<p>Unless their name is on the deed, your aunt’s house is not your parents’ asset. The rental property would be. Equity is the difference between what an asset is worth and the debt that is held against it…in other words, it’s the cash that’s left in your pocket when you sell something that you still owe money on.</p>
<p>Ownership of the $5K account would affect your EFC. Students have no asset protection and their assets are assessed at 20%, unless they’re in a 529 account (which is a tax-qualified college savings account), then they would be treated as a parent asset at the 5.6% rate.</p>
<p>So, you’re a senior and haven’t filed FAFSA yet? I would recommend you file at least an estimated FAFSA asap if you think you might be eligible for need based aid…some campus based aid is quite limited and some colleges use the FAFSA filing date in awarding those funds. In any case, make sure you do not miss the filing deadlines at any of your schools!</p>
<p>Your aunt’s house does not count as your asset. The “random house” does count as an asset and any rent you get should be listed as income also. Neither of your parents can file a 1040 form to qualify for simplified needs. Why not apply for free lunch…? You don’t have to BUY the lunches…you just have to apply and qualify for them.</p>
<p>Hmm, I have to check if his name is on the deed thing. Where can I check the requirements for free lunch? And also, what if I qualify for reduced lunch and not free lunch?</p>
<p>And I’m planning to do my FAFSA soon so would it count if I get free lunch a few days before I fill the form out?</p>
<p>My son did not receive any of the items like SSI or reduced price lunch that would qualify him for the FAFSA Simplified Needs Test. He is on the state CHIP program, which is considered by the HHS a “federal means-tested public benefit.” Is there any way to enter this on the FAFSA so that he would qualify for the SNT?</p>
<p>I don’t believe so…I think the qualifier questions are very specific as to which programs you must have participated in. But you could always double check by viewing the FAFSA instructions!</p>
<p>Okay, so I just talked to my dad and asked him if he’s done his taxes or whatever and he said he can’t yet because he does his and my mom’s together. He does his taxes in the state he works in, which is different than where my mom and I live because here there are less taxes. Since I’m going to school here, and my dad is doing his taxes thing in another state, will that matter for FAFSA and toward getting financial aid?</p>
<p>I’m not really sure I understand all of this but I want to complete my FAFSA because the finaid deadline is approaching soon…</p>
<p>The FAFSA uses skip logic, so you’ll only actually see the questions that pertain to you, but you can see all of the questions, and the explanations in the instructions:</p>
<p>Thank you. Okay, so can you run by me the biggest determinants of the EFC? My parents can’t really afford to pay for college for me. My dad tried to invest in buying a new home for people to be able to rent but has not been able to pay the mortgage for that house because of the economy and stuff. So that house is on “low modification” or something of that name. Will this affect my aid?</p>
<p>Yes, it’s loan modification, haha! The biggest factor in determining EFC is your parents’ Adjusted Gross Income, which includes net rental income. After that, it’s probably going to be the net value of their assets above the asset protection allowance (which depends on the age of the older parent), assuming you don’t have any significant income or assets in your own name. When reporting the rental property, you will use current market value but at a price for a quick sale…meaning what he’d expect to sell it for if he wanted it sold immediately. Deduct the current loan payoff amount and typical selling costs from that to find the net asset value…that’s the number you would use for FAFSA.</p>
<p>Okay, so I don’t have income or any savings under my name except a bank account with $1000. My dad told me he already reports the rental income thing from the other house on his taxes and combined with his income is still less than 50,000 a year. My dad is 48. Do you think I will be eligible for the best financial aid?</p>
<p>Btw, what kind of aid do you get from filling out the FAFSA? I heard 5,500 is the max or something. Is that all you get?</p>