Confused about extremely high EFC...

<p>It's probably a bit late to be asking this, but my mother and I can't figure it out. We filled out the FAFSA with my mom and stepdad's income at roughly -$250,000 for last year, as my stepdad owns a business and lost quite a bit of money. The report at the end of the FAFSA stated that I would likely be eligible for a Pell grant of up to $4,600, I believe it was, and that our EFC would be $800. So I waited to hear back from the two schools I applied to - one, a local university, and the other, a local community college. </p>

<p>I was required to send copies of my parents' tax return in for verification to both of the schools, so I did. I got my financial aid offer from the university in April, which included a $4,600 Pell Grant for the year. The financial aid offer from the community college didn't arrive until June, and I was disappointed to see that the only thing I was offered was a loan. But the community college also stated that our EFC would be roughly $31,000! Thinking that perhaps I made a mistake while filling out the FAFSA, I went back and looked through it. Everything matched the tax returns exactly. Called the financial aid department at the community college and asked how they arrived at that number. They said, "We got it from calculations we did on your tax return" and couldn't be more specific than that. Called FAFSA to ask how the school could have possible gotten an EFC of $31,000 when the report from FAFSA's website said it was merely $800, and they didn't have an answer either other than that it changed when the school initiated some sort of change in my file.</p>

<p>So the school isn't admitting to anything or able to provide calculations/documentation of how they reached the EFC of $31,000, and I am extremely confused as to how they got that when my parents had a negative income of almost $250,000 last year. I am not sure why I was offered a pell grant at one school and not another, and why my EFC is $31,000 when the FAFSA website itself said that it was $800. Can anyone provide any insight as to whether or not this could possibly be correct, or why that might be? And what other steps should I be taking, if any? I just feel like that's completely wrong but I can't seem to get answers from anyone.</p>

<p>
[quote]
. . . they didn't have an answer either other than that it changed when the school initiated some sort of change in my file.

[/quote]

Were you notified of a FAFSA Correction based on the changes the school made? Have you compared the corrected FAFSA to the original one you submitted?</p>

<p>Do your parents have assets? Savings? investments? </p>

<p>Did your step-dad put a large amount into a retirement acct last year?</p>

<p>Your family claimed a "negative income" last year. Well, schools are going to wonder what y'all lived on last year.</p>

<p>did your parents pull out money from a retirement acct in order to live on that money?</p>

<p>Take the FAFSA you submitted with the negative adjusted gross income and compare it to the SAR that you have right now. You should be able to find the difference if you look line by line. Pell grants are generally reserved for low income families so showing an adjusted gross income of a negative quarter of a million dollars is going to raise some flags.</p>

<p>Nevermindddddddddddddd</p>

<p>Check the amount on the "income from work" field on FAFSA against these numbers on your parents' tax returns:</p>

<p>Income from work includes the amount reported on line 7 of the 1040/1040A (line 1 of the 1040EZ). In addition, the following are added to income from work:
the amount reported on line 12 of the 1040, the amount reported on line 18 of the 1040, and income from box 14 [code A] of Schedule K-1 (Form 1065)</p>

<p>Thanks for the replies, everyone. I was able to go into the FAFSA website and view the changes that the school made, which I didn't know I was able to do. </p>

<p>Momofthreeboys, I followed your advice and looked at the FAFSA I submitted versus the corrections made by the school. Apparently they changed the "Parents' 2010 Adjusted Gross Income" from -$256,891 to -$242,921. Okay, that's not a huge difference. But what was also changed was the "Parents' Other Untaxed Income or Benefits" which I had marked as $0 and they changed it to $88,256. Those were the only two changes made by the school when the EFC jumped to $31,000, so I'm assuming it has to do with that last one. Not quite sure what exactly that includes, but I'll sit down with my parents after they get home in a few days and try to figure out where that number came from because it looks like that's the cause of the higher EFC.</p>

<p>Did you choose a school to attend? That is the only one that really matters in all of this...</p>

<p>The calculations for self-employed are still quirky. There is (apparently) an assumption self-empl folks have more control over certain categories of expenses, accounting methods, etc. Many complaints on CC, including how losses are viewed. Also, did the schools look at just one year's taxes or two? They often look at history- not just what happened in 2010. Often, when people call in with finaid questions, the person on the other end is not the savviest. You may have the option of asking for a sit-down with someone in authority, to explain. Btw, your comm coll doesn't actually cost 31k, does it?</p>

<p>You'll need to ask your parents as untaxed income can be many different types of income. It could be related to your stepdad's business and how distributions were made or any number of things that we couldn't possibly guess.</p>

<p>But what was also changed was the *"Parents' Other Untaxed Income or Benefits" which I had marked as $0 and they changed it to $88,256.** Those were the only two changes made by the school when the EFC jumped to $31,000, so I'm assuming it has to do with that last one. Not quite sure what exactly that includes, but I'll sit down with my parents after they get home in a few days and try to figure out where that number came from because it looks like that's the cause of the higher EFC. *</p>

<p>Yes, do ask your parents about that. Your parents may have taken some kind of cash withdrawal from a 401k or some other retirement account. </p>

<p>That said, the EFC is still high, even with the school thinks your parents had an income last year of $88k....but I guess since the money isn't from a salary, it may get "hit" harder since those moneys aren't hit with SS deductions and such. </p>

<p>How much does your com college cost?</p>