FAFSA Expert Help Please! Newbie hoping we did it correctly!

BelknapPoint
Fri, 02 Oct 2020 13:14:43 +0000

It said to use the income listed on our form 1040 line 8b which I did, however I was under the impression that it would use our income amount after the standard deduction (line 9) was subtracted to calculate our EFC and aid amount. Does it take the standard deduction off the gross I reported in the formula used when they process fafsa or did we enter the wrong amount from our tax returns?

No, FAFSA uses AGI, as the instructions indicate. The standard deduction is just a tax policy thing. Subtracting a standard deduction from your AGI doesn’t mean that you don’t have that money to help pay for a child’s college. It means that money won’t be subject to income tax.

Another thing that bothered me was that I was never asked about cash, checking balances on hand etc. In the parents financial section. Only in my son’s financial section was it asked. The form ended with no more financial questions after asking if our “total assets exceeded $7,300?” On the summary page before signing, it showed those questions but they were greyed out and not clickable.

It sounds like you qualified for the simplified needs test, which causes assets (like cash on hand and checking account balances) to be ignored.