My husband lost his job recently. My oldest son did not qualify for student aid for college this year except for federal loans. Is there any way my son could now receive financial aid until my husband finds a new job? — Sonja R.Ask the college for a professional judgment review. Some colleges call it a special circumstances review or financial aid appeal. Families can appeal for more aid in the middle of the academic year, not just after receiving the financial aid award letter. Any change in family financial circumstances may provide the college with sufficientjustification for an adjustment. Job loss is the most common reason for a mid-year appeal for more financial aid. Other common reasons for a mid-year adjustment include illness or injury, casualty losses, a significant change in income, and the addition of dependent care expenses for a child or elderly parent.After the college makes an adjustment to the financial aid package, ask about the possibility of increasing your son's unsubsidized Stafford loan limits. If the parent of a dependent student is ineligible for the Parent PLUS loan because of an adverse credit history, the dependent student becomes eligible for the higher unsubsidized Stafford loan limits available to independent students. While the definition of an adverse credit history does not consider job loss, the regulations at 34 CFR 685.203(c) give the college the authority to increase a dependent student's loan limits under "exceptional circumstances". Some colleges will consider job loss or other evidence of the parents' inability to repay the debt as sufficient justification for increasing the student's loan limits. The regulations define exceptional circumstances as including (but not limited to) receipt of public assistance or disability benefits, incarceration of the parent or if the parent's whereabouts are unknown. Note that if a dependent student receives the higher unsubsidized Stafford loan limits, the student's parents will not be able to borrow from the Parent PLUS loan program. If they do borrow from the Parent PLUS loan program the college will reduce the student's unsubsidized Stafford loan limits. After I filled out the initial FAFSA form, I lost my job due to the downsizing of my company. That changes our financial picture drastically, as I am now unemployed. Can I now go back and fill out another FAFSA form with updated information? — David I. You can't change the original FAFSA, since the income figures on the FAFSA are based on last year's income and were correct as of the date the FAFSA was filed. Likewise, you can't file a new FAFSA to reflect the change in income. If you do either, it will trigger verification. Instead, contact the college's financial aid office and ask for a professional judgment review. Mention the job loss on the phone when you ask about how to file an appeal. You will need to provide the financial aid office with documentation of the job loss, such as a copy of the layoff notice or a copy of a recent letter from the state unemployment office demonstrating the receipt of unemployment benefits within the last 90 days. The college will also want information about any severance pay. The college financial aid administrator has the authority to switch your FAFSA from last year's income to an estimate of this year's income. Most colleges will make such an adjustment. My daughter is a high school senior and she is applying college now. I just lost my job recently. Based on our previous income, I think we will not qualify for financial aid. Can I file the FAFSA next year but not this year, since our income will decrease dramatically next year? Does the college reconsider the financial aid for a sophomore student if the family income changes? — F. H. Most forms of financial aid are awarded one year at a time. Each year's financial aid eligibility is based only on that year's FAFSA, which is based on the prior tax year's income. Having a higher income two or more years ago generally does not prejudice the college against awarding your daughter need-based financial aid. Sometimes families decide to skip filing the FAFSA for the freshman year because they feel that this will increase the student's chances of being admitted. (Not all colleges use need-blind admissions. Also, some of the colleges that practice need-blind admissions for the regular application pool will become need sensitive when admitting students off of the waiting list, especially if the college has exhausted its financial aid budget.) But this approach can backfire, since some colleges will refuse to award institutional grants to such students in subsequent years. So if you will need financial aid, it is best to apply for financial aid every year. Given that the job loss affects your ability to pay for her education now, you should file the FAFSA now and ask the college for a professional judgment review to consider the impact of the job loss on your finances. The FAFSA uses last year's income as a proxy for this year's income because it can be verified by comparing it to your income tax return, pay stubs, W-2 and 1099 statements. But it is still intended to be a proxy for the family income during the award year. College financial aid administrator have the authority to make adjustments when there is information that suggests that the prior tax year income is not reflective of ability to pay during the award year.
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