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.
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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 sufficient
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justification 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
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.