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What is Auto-Zero EFC?
Students receive a zero EFC when FAFSA determines the student’s household does not have the financial means to contribute to educational costs for the upcoming school year. Some students may even qualify for an Auto-Zero EFC. This means they may be able to skip some of the financial questions on the FAFSA. Read on to learn more about Auto-Zero EFCs.
What does auto-zero EFC mean?
The Free Application for Federal Student Aid (FAFSA) requires that students provide their financial information, In the case of dependent students, financial information of the biological/adoptive parent(s) they live with most of the year is required. The FAFSA is attempting to take a financial snapshot of the student’s household from the previous year. They estimate what, if anything, could be contributed to the student’s college cost. To do this, FAFSA looks at prior year tax information from the student. If the student is dependent, the same goes for parent(s).
If your household’s financial information from the tax year requested falls below a certain threshold (see below for requirements/details), the FAFSA asks if you would like to skip the remaining financial questions. Always say “yes” unless you KNOW (absolutely 100% know) the college requires you to enter further financial information. Remember, you can always update the FAFSA if you initially answer “yes” and skip the additional financial information. Your college will contact you and help you update any additional financial information needed. So make sure to watch for any communications from your college’s financial aid office.
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Requirements for auto-zero EFC?
Before a student is eligible for an automatic EFC, they must satisfy multiple requirements. Don’t worry! FAFSA calculates the information you enter as you progress through your FAFSA to see if you are eligible for the auto-zero EFC. Simply answer the questions on your FAFSA honestly. This gives you the correct EFC, and ultimately, the correct financial aid package. Here’s the nitty gritty on how FAFSA determines if a student is an auto-zero EFC:
For both dependent and independent students, the household income threshold is $27,000 For dependent students, this means their parent(s)’ Adjusted Gross Income (AGI) doesn’t exceed $27,000. Independent students’ (and their spouse, if married) AGI also can’t exceed $27,000. If the parent(s) or the independent student are not required to file taxes, they mark “not going to file.” They then include any work income earned during the requested tax year. In this case, list only the amount of income received as wages from a job.
See also: Am I a dependent or independent student?
In addition to income, one of the following must be met for an auto-zero EFC:
- The student or Anyone in the student’s’ household participates in the Medicaid Program, SSI Program, SNAP, Free and Reduced Price School Lunch Program, TANF Program, WIC
- The dependent student’s parents filed an IRS Form 1040, but did not file a Schedule 1, filed a tax form from a Trust Territory, or were not required to file any income tax return
- The independent student’s household filed an IRS Form 1040, but did not file a Schedule 1, filed a tax form from a Trust Territory, or were not required to file any income tax return.
- The student’s parent is a dislocated worker or the independent student or spouse is a dislocated worker.
*An independent student will NOT be considered an auto-zero EFC without a dependent other than a spouse. If you are independent and meet the criteria above but don’t have dependents, you could still qualify for a 0 EFC. In this case, you’ll just need to answer a few more financial questions on the FAFSA.
Related: FAFSA 101 guide
The Auto Zero EFC Wrap Up
If you meet the requirements for an Auto Zero EFC, complete the FAFSA as soon after October 1st each year as possible. A “0” EFC means you are eligible for more need-based aid. This aid is often distributed first come first served based on your FAFSA submission date. An Auto-Zero EFC simply means you’re able to submit the FAFSA by answering fewer financial questions. Therefore, completing the FAFSA early should be top priority!
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