<p>My father owned his own business and had a very unstable income. For the past few years business had suffered and I had been eligible for a BOG fee waiver which covers the units I take at my junior college. </p>
<p>He recently shut down his business and will possibly be filling for bankruptcy and maybe even have his wages garnished. He is working for another company now and I am no longer eligible for the BOG fee wavier for the Fall 2008 and Spring 2009 semesters at my J.C. even though my family is still financially struggling.</p>
<p>I have sent out my applications to some of the UC's and will be applying to some private schools. I am a little concerned that the schools will not see my fathers debt and only take his new annual income into consideration when it comes to financial aid. Will this be the case? I am very worried that what took place at my J.C. will occur at an even larger monetary level when I transfer. Any recommendations? </p>
<p>Unless there are medical bills that are not covered by insurance, eldercare, etc, bankruptcy and personal debt are not considered when it comes to financial aid.</p>
<p>You can contact your school’s FA office and ask about professional judement</p>
<p>I am no expert, but it seems to me that the family’s income has a lot to do with awarded aid; consumer debt does not seem to be considered, but, as someone else mentioned, medical expenses are asked about. Of course, any substantial medical debt might actually be itemized and deducted on a 1040.</p>
<p>Another factor is how your family filed their taxes and which form they were eligible for – a 1040A or 1040EZ qualify one for a simple needs test.</p>
<p>In short, it sounds to me like your dad, now having a job (yay!), also has an income. They may not see his debt related to the bankruptcy – and even, different BKs have different payment plans, and some, none at all. </p>
<p>I think you need to talk to a FA officer and have some good info about your specific situation. But if your dad is making, say, $45,000 a year at his new job, that income is what counts for a lot, not that he owes money for past debts that are not medical. However, you can also correspond with a school and explain any mitigating factors.</p>
<p>Agree with the preious posters that you will have to talk to the financial aid officers. They may or may not be willing to take the bankruptcy into account. If it was because of a failed family business rather than consumer debt they may be more willing to look at it. Basically only the schools can tell you what their policies are regarding this. </p>
<p>You may be eligible for additional Stafford loans. If your dad is turned down for the parent plus loan, which is likely if he has declared bankruptcy, then the student is eligible for an additional $4-5000 in Stafford loans.</p>
<p>The FAFSA EFC is mostly driven by income unless there are a lot of assets. A lot is going to depend on what your Dad’s income is and whether the school(s) are willing to consider the bankruptcy a special circumstance.</p>