My husband earns about $125,000 in salary and I am a stay at home
mom. My husband just changed jobs and got his deferred salary and his
retirement from 25 years of employment, so last year's income looks
huge when it really wasn't. We also have a 19-year-old child with
autism who lives in a group situation with social and living classes
as well as some college. It costs us $57,000 per year out of pocket
with no financial help for it. We also have large medical expenses as
well as helping an elderly parent financially. My 17-year-old plans on
attending college next year. Will we qualify for student financial
aid? Can we include all this information on the FAFSA form?
— Sara A.
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The FAFSA is a one-size-fits-all form that does not currently have a
place where you can list unusual circumstances. Instead, Congress
delegated the authority to college financial aid administrators to
make adjustments on a case-by-case basis to the data items used to
calculate the expected family contribution when justified by special
circumstances. The amount of the adjustment is based on the financial
impact of the special circumstances. After the adjustment the standard
formula is used to calculate a new expected family contribution. This
authority is called professional judgment
and is subject to
the financial aid administrator's discretion with no appeal. (Some
colleges call it a special circumstances review or a financial aid appeal.)
You have mentioned several circumstances that should qualify for an
adjustment, including the lump sum retirement distorting income, the
unusually high child care costs for a disabled child, the unreimbursed
medical expenses and the eldercare expenses. You should write a letter
to each college asking for a professional judgment review. The letter
should summarize the special circumstances and their financial impact
on your family. Include photocopies of independent third-party
documentation of the expenses, as the school will need the
documentation before they can make an adjustment.
Note that your husband's retirement funds must be rolled over into a
qualified retirement plan. The college will not make an adjustment to
income or assets if the money is sitting in an unrestricted bank or
brokerage account, as then the money could be used for any purpose.
I’m 49 years old and our son is currently 19 years old going to
college. The college denied us financial aid this year because they
claim we made too much money. I earn about $50,000 and my son earned
about $11,000 last year.
Do I need to kick him out of the house to be able to get help? I can’t
believe that he is old enough to die for this country, but not old
enough to apply for aid without us.
— Ernie G.
The most likely cause of the loss of aid eligibility is your son's
income. The expected family contribution (EFC) includes half of
dependent student income above $3,750. So his $11,000 income increased
his EFC by $3,625. Between that and your income his EFC is probably
above the cutoff for the Pell Grant. But he may be eligible
for low interest loans such as the subsidized Stafford loan. Also,
despite the loss in aid eligibility he still comes out ahead
financially by more than $5,000 because of the extra income.
Kicking him out of the house will not increase his aid eligibility. He
will still be considered a dependent student through age
24. Self-sufficiency has not been considered grounds for a dependency
override since 1992. If you cut off all support and refuse to complete
the FAFSA, the only aid he'll be eligible for is the unsubsidized
My Mom and Dad have both been unemployed for the last couple of
years. This year my Dad started withdrawing money from his IRA in
order to pay the bills, since my parents have used up their other savings.
Since distributions from an IRA count as part of taxable income, next
year's FAFSA will show a big increase in income even though our
financial situation is worse. I will not qualify for a Pell Grant or
the Cal Grant because my EFC will be too high due entirely to the IRA
withdrawals. Is there anything I can do?
— Nancy A.
While money in a qualified retirement plan is disregarded as an asset,
current year contributions are treated as untaxed income and current
year distributions are included in taxable income. As you noted, this
can affect aid eligibility the same as if it were earned income.
After you submit your FAFSA next year, send a letter to the college
financial aid office asking for a professional judgment
review. Include photocopies of current documentation of your parents'
unemployment (ideally dated within 90 days) as well as copies of
documentation showing that most of their income was from a hardship
withdrawal from your father's IRA. Also mention whether they are
receiving unemployment benefits or not, and if so, the total
unemployment benefits for the year. The financial aid administrator
will review the information you have provided and determine whether or
not to make an adjustment. There is no appeal beyond the financial aid
office, so be polite and promptly respond to any requests for