The primary purpose of the Simplified Needs Test is to make it easier for some students to fill out the Free Application for Federal Student Aid (FAFSA). If a dependent student's parents' income is less than $50,000 and the relevant family members were non-tax filers or were eligible to use a1040A or a 1040EZ to file their taxes, the student completes only the first part of the application; the asset information will not have to be provided.
A simplified test for calculating the expected family contribution for a student applying for federal student financial aid. If the family's adjusted gross income is less that $50,000, then the simplified needs test may be used. This test takes only income into account and usually results in a greater financial aid award for applicants in this category.
A formula used in the Federal Methodology for families whose Adjusted Gross Income (AGI) is less than $50,000 and who file either the 1040A or 1040EZ IRS forms. In this formula, a family's assets are not included.
An alternative method used to calculate the family's expected contribution to college costs for federal aid purposes, in which all assets are excluded from the federal aid formula.
An alternate method of calculating the expected family contribution for families with adjusted gross incomes less than $50,000, who have filed or are eligible to file an IRS Form 1040A or 1040 EZ or who are not required to file an income tax return.
The simplified needs test is a variant of Federal Methodology. A dependent student qualifies for the simplified needs test if neither the parent nor the student filed or will file an IRS Form 1040 but filed or will file a 1040A or 1040EZ, and the base year parents' adjusted gross income is $49,999 or less. In the case of independent students, if the student or student's spouse did not or will not file an IRS 1040 but filed or will file a 1040A or 1040EZ and the sum of the base year student's and spouse's adjusted gross income is $49,999 or less, the student qualifies.
In the context of financial aid, a shorter form of Needs Analysis that is applied if both the student and the parents (1) have Adjusted Gross Income of less than $50,000 and (2) qualify to file IRS Form 1040-A or 1040-EZ or do not need to file.
If the parents have an adjusted gross income of less than $50,000 and every family member was eligible to file an IRS Form 104A or 1040EZ (or wasn't required to file a federal income tax return), the Federal Methodology ignores assets when computing the EFC. If you filed a 1040 but weren't required to do so, you may be eligible for the simplified needs test.
