Can I Get a New Financial Aid Package if My Mom Lost Her Job?

Mark Kantrowitz

September 29, 2009

Can I Get a New Financial Aid Package if My Mom Lost Her Job?

I am in my third semester and have already received my financial aid for this semester; however, our financial circumstances have dramatically changed. My mother was laid off as of the first of August and my father has been found to have cancer and will be off work well into next year with treatments. Is there a way to amend the amount of aid that has been awarded to me for next semester? — Shawna L.

Call your college’s financial aid office and ask them about their procedures for a professional judgment review, often referred to as “PJ”. Some colleges call this a special circumstances review or a financial aid appeal.

College financial aid administrators have the authority to make adjustments to the data elements on the Free Application for Federal Student Aid (FAFSA) on a case-by-case basis when justified by unusual circumstances. Both job loss and high unreimbursed medical expenses should qualify for an adjustment, as well as any significant change in circumstances from last year to this year. Colleges are not required to make an adjustment, but job loss is the most common circumstance in which most colleges will make an adjustment. The adjustment will be based on the financial impact of the unusual circumstance, such as the change in income. Provide the college with photocopies (not originals) of the layoff letter and other documentation, as the process is driven by documentation.

You can ask for a professional judgment review at any time, not just during the initial financial aid application process.

I recently found myself out of work. Figuring it would be an ideal opportunity to return to school, I attempted to apply for financial aid. I was dissappointed to find that applications for financial aid are based on one’s income for the previous year. Being unemployed in today’s job market does not qualify me for financial aid because I made too much money last year? — Ryan S.

The US Department of Education recently issued guidance to college financial aid administrators in connection with the current economic downturn. This guidance permits college financial aid administrators to set the income earned from work on the FAFSA to zero for students who have recently received unemployment. It also allows colleges to treat unemployment benefits as zero income for independent students. A copy of an unemployment benefits letter dated within the last 90 days is sufficient.

If the information submitted on the FAFSA does not adequately address your financial situation, you should always ask the college financial aid administrator for a professional judgment review.

I currently have a stepson in college and a daughter who is currently applying for financial aid. My stepson does not live with us but my husband is still paying child support. Since I have to include my husband’s income when filling out the FAFSA for my daughter, is it appropriate for me to state that I have a child currently enrolled in college? I do not want to affect any financial aid my stepson is currently receiving. — Sandi L.

If your husband provides more than half your stepson’s support, you should include your stepson in household size and number in college on your daughter’s FAFSA. But then you cannot report the amount of child support paid on her FAFSA. Likewise, if your husband pays less than half your stepson’s support, you should report the amount of child support paid on your daughter’s FAFSA, but you cannot include your stepson in household size and number in college on her FAFSA.

To the extent that the amount of child support is in a gray middle area, there’s a tradeoff between including the stepson in the number in college and reporting the amount of child support paid. Either option will reduce your Expected Family Contribution (EFC), but the amount of the reduction will differ and will depend on your particular financial circumstances. The parental contribution part of the expected family contribution is divided by the number of children in college. Total income is reduced by the amount of child support paid. To determine which has a greater impact on the EFC, use a financial aid calculator to evaluate each scenario.

If it’s clear whether your husband does or does not provide more than half support to your stepson, don’t try to fudge the answer. The college may ask to see a copy of the divorce decree as part of the verification process and may perform a detailed calculation to determine whether or not your husband provides more than half support.

In most cases the information reported on your daughter’s FAFSA will not affect your stepson’s FAFSA. Your stepson’s mother is responsible for completing his FAFSA because your stepson lives with her more than he lives with you. If your stepson lived with both of you equally, then it would depend on whichever of the two biological parents provided more support. In that case the treatment of the child support on the two FAFSAs would need to be consistent (i.e., you can’t count it as providing more than half support on one FAFSA and less than half support on the other).

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