This section will focus on the net worth of the student’s current assets as well as the taxed and untaxed income for the year 2015
Section 5 also asks about the student’s 2015 taxed and untaxed income as well as the current net worth of the student’s assets. The assets and the income of the student would be treated similarly to that of the parent’s assets and income. However, the support received by a student in the form of cash is exempted from FAFSA.
Let us get a clearer picture of the exemption-
- If a dependent student receives cash support, then it is not reported on the FAFSA
- If the cash support is received from the custodial parents, it is not reported on the FAFSA
- If a dependent student receives cash support from other sources that include the grandparents, uncle and aunts, external third party sources, etc. The support needs to be reported as untaxed income on the FAFSA.
Questions Meant for Independent Students
Note - If the Independent students who receive cash related support from a source other than their spouse, then they have to report it as untaxed income on the FAFSA. So, they might ask-
What if an independent student is married at the time of FAFSA submission- How can a student report his/her spouse’s assets?
In this case the student is required to report the total worth of his/her spouse’s asset, along with the worth of his/her own asset, irrespective of whether the marriage took place after 2015.
As the section will deal with the financial information of the student, it is important to understand- Who will be eligible for zero EFC?
The Zero EFC facility is meant for those Independent students, who have dependants excluding their spouse. Those students, who do not have any dependents (spouse not included) will not be benefited from the zero EFC.
Independent Students – What Questions to Expect?
Independent students will have to answer additional questions. Let us discuss them in detail-
The size of the Household
The independent students should expect questions based on the size of their household. It is a mandatory question, which will be used to determine the income protection allowance, that is already discussed in the previous sections.
So, let us understand- Who should be included as members of the household-
- As discussed in the previous sections, a student needs to be included
- The spouse of an independent student must be included, unless they are separated or divorced.
- The student can also include other members (uncle, aunty, parents, etc.) if and only if the student is going to provide more than half of their support, and will continue to do so till June 2017.
- Similarly, if the children of the independent student, receive more than half of the support, they should be included.
From the above points, it is evident that the support plays a vital role, but the independent students need to note that the support is calculated for the entire year. So, no matter if the student starts supporting his/her children from the mid of the year, the support should be more than half for the entire 12 months.
Number of College Going Household Members
The independent students will come across questions like- How many members of your family are expected to attend the college in 2016-2017?
An independent student is required to give an estimate the total number of members from his/her family that are expected to be enrolled on at least a half time degree in a recognized post-secondary institution for the academic year starting from July 1, 2016- June 30,2017.
Why is the number important?
We have already discussed in the previous sections, that the number will positively impact the expected family contribution by reducing it, and thereby increasing the need-base eligibility for a student.
The number in college has a big impact on eligibility for need-based aid because the expected family contribution for an independent student is divided by the number of household members in the college. (The number in college is also used to reduce the income protection allowance because most living expenses for college students are considered as part of the college’s cost of attendance figure.)
Other lessons on FAFSA