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fafsa for students with parents on disability

koala11koala11 Registered User Posts: 2 New Member
Hi I was wondering if anyone could give me some professional advise on my situation. My dad suffered a work accident about a year ago and had his leg injured. For a while our main source of income was my father's workers compensation check. My parensta are seperated and i live with my father so he had no spouse to help him with the financial things. The doctors gave him many restrictions on what sort of physical labor he could do. His job before the accident was to repair old tires so when he tried to go back to work the company wouldn't give him his job back. He then applied for disability. The check they send him barely covers any axpenses. My older brothers and sisters have tried to pitch in as much as tehy can to help. I am the first in my family to attedn college and i am not really familiar with the process. I would liek to know if my father being on disability will be of a banefit to me financially when applying for FAFSA. Does anyone know of any grant or federal aid program available for students in my situation. (I am a resident of Texas.) Any information or advise you have will be of great use and much appreciated! Thank You!!!!
Post edited by koala11 on

Replies to: fafsa for students with parents on disability

  • sybbie719sybbie719 Super Moderator Posts: 20,823 Super Moderator
    Your custodial parent(father) will still have to file a fafsa if you are looking to get any type of financial aid(especially federall aid, Pell, SEOG or loans).

    Even if his only income is from workers compensation -which is still considered taxable income. He shouls also be filing taxes if for no other reason, he could be eligible for tax credits.

    In addition, your mother will have to fill out her financials as the non custodial parent.
  • MarylandMomMarylandMom Registered User Posts: 255 Junior Member
    We had a similar situation and worker's compensation for disability is not taxable income. We included it on the Fafsa but it goes in seperate column and is listed as workers compensation and non-taxable income. This was for non-custodial ex-husband.
  • CC AdminCC Admin Administrator Posts: 32,334 Senior Member
    As to FAFSA, your family’s EFC (expected family contribution) is derived from four factors: parent’s income, student’s income, parent’s assets, student’s assets. Look for the line on any 1040 form: Adjusted Gross Income (AGI). If your parents income is beneath $50000 and you parents file a short form (1040A or 1040EZ), then two of the above factors (parents assets and student assets) will be excluded when your EFC is determined. This is called the simple needs test.

    In addition, if your parent’s AGI (at least for tax year 2004) was beneath $15000 and they file a short federal tax income return (1040A or 1040EZ), or if your parents don’t file a tax return and have combined income from work of less than $15000, then your EFC is automatically set to zero. If your parent's meet either of the above two scenarios, your EFC will be automatically set to zero even if you have lots of income and/or assets.

    As a general rule, worker’s compensation benefits are not taxable income. I assume your father has no other income. Your EFC (and what need based aid you will get) will be determined in large part by what your mother’s financial situation is. What is entered on FAFSA lines 73 (parents adjusted gross income), FAFSA lines 76 and 77 (father’s income earned from work, mother’s income earned from work) and FAFSA line 71 (type of tax form used (short or long) will be pivotal.

    Because of my disability, my son (while he was still in high school and a minor) and I were awarded a substantial sum of money (almost six figures) in social security disability benefits (this amount included a lump sum payment for previous years). Under federal law, none of this money was considered taxable income. Despite having received this money and properly reporting it on FAFSA line 78 (worksheet A), since my wife and my only taxable income (and hence our AGI) for the year was beneath $15000, neither of us had income from work, and we had filed a short form, my son’s EFC was automatically set to zero. Approximately 75% of his estimated cost of attendance was covered by need based grants and the rest was covered by subsidized Stafford loans.

    Again, the above FAFSA lines will be central to determining what need based aid you get. I hope it helps. Good luck.
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