Reminder – automatic zero EFC maximum income DROPPED TO $23,000

by Grace

Last month Congress made it harder to qualify for an automatic zero EFC by reducing the maximum income allowed from $32,000 to $23,000 for the 2012-13 Award Year.  A zero EFC usually makes a family eligible for the highest amount of financial aid.

This significant change seemed to have stayed mainly under the radar, even though it will hit low-income families hard since over 4 million students qualify for the automatic zero provision this year.   Perhaps some provisions of President Obama’s 2012 “Blueprint for Keeping College Affordable and Within Reach for All Americans” will counteract this benefit cut to poor families.

Here are more details about how dependent students can qualify for the automatic zero EFC, updated from last year’s post.

For the 2012-2013 school year, a dependent student automatically qualifies for a zero EFC if both (1) and (2) … are true.

1) Anyone included in the parents’ household size (as defined on the FAFSA) received benefits during 2010 or 2011 from any of the designated means-tested Federal benefit programs: the SSI Program, the Food Stamp Program9, the Free and Reduced Price School Lunch Program, the TANF Program, and WIC; OR
The student’s parents:
• filed or were eligible to file a 2011 IRS Form 1040A or 1040EZ11,
• filed a 2011 IRS Form 1040 but were not required to do so, or
• were not required to file any income tax return; OR
the student’s parent is a dislocated worker.

AND

(2) The 2011 income of the student’s parents is $23,000 or less.
• For tax filers, use the parents’ adjusted gross income from the tax return to determine if income is $23,000 or less.
• For non-tax filers, use the income shown on the 2011 W-2 forms of both parents (plus any other earnings from work not included on the W-2s) to determine if income is $23,000 or less.

Federal Pell Grant Program of the Higher Education Act – Background, Recent Changes, and Current Legislative Issues  (pages 20 & 22)

Related:  Congress curtails Pell Grants and federal loan grace period 

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