Several questions and observations.
- If your ex wife's AGI was indeed $25,000 or less, then did anyone in her household receive federal means tested benefits in 2016 or 2017? Like free/reduced lunch, SNAP, etc? That would be another way to qualify for auto zero EFC.
- your D's coop income was from 2016 and was reported on her 2016 tax return? The 529 money you gave her was also given to her in 2016?
- How much were your D's assets? Roughly, you don't have to give exact amounts.
- I agree that if the mom made around $25,000 and even if auto zero EFC would not apply, her available income (AI) for FAFSA EFC calculation would be very small (or zero or negative) because of federal, state, soc sec tax deductions, income protection allowance and employment expense allowance.
- I do not agree that the student portion of FAFSA EFC would be $2,500 if the coop income of $10,000 was not subtracted. If total income was $16,000 and then federal, state, soc sec tax were deducted, and income protection amount of $6,570 was deducted, then available income would be about $8,000, so student's contribution from AI would be 50% of that, so around $4,000.
Then added to that would be the 20% student contribution from assets.
Did your D go through her SAR and check if she entered all the numbers correctly in the right places?