<p>Hi,
I've garnered a lot of info lurking here on and off over the last 6 months. My daughter got into a few nice schools but decided on a small LAC on the east coast. She got a generous scholarship, stafford loan and work study, etc. We were shocked to get mail recently saying that they lessened our award by almost 5,000! They said our tax return was different but it really wasn't. We had to take a penalty to withdraw some money from an IRA for a situation that left us desperate. That money was added as income and was about that amount. I also noticed her subsidized loan was changed to unsubsidized. I have tried for 2 days to get in touch with someone but I always get a machine. (must be busy with many other calls) Has anyone ever had something like this happen. At this late time of the year, I find in disheartening at best. I sent all my paperwork in by May so I don't understand it. It's a 3 hour drive to the campus but I hope to get through soon or try a different approach. A neighbor told me her daughters college did this when they severely over enrolled, but that didn't help eleviate my nervousness. Thanks for any advice.</p>
<p>There's probably nothing you can do besides to continue to try to get through to the Financial Aid office. There are several families on the Financial Aid forum with similar problems. You're not alone, but it still stinks.</p>
<p>So let me get this straight (I am not financial aid savy). IRA assets are not included in the calculation of your need and ability to pay, but if you make a withdrawal from the IRA, which is an expensive source of funds due to penalties, that money is counted as income and reduces your need. Ouch! That is something everyone should be warned about. Talk about a financial trap. You would be better off borrowing the money, maybe even a credit card cash advance, but of course it's too late now.</p>
<p>A withdrawl from an IRA (not a Roth IRA, though) counts as income with the IRS, so perhaps it is not surprising that colleges consider it income, too.</p>
<p>Unfortunately, I didn't get anywhere with the financial aid office (just offers of more loans) I don't know what we will do, but we'll get through this year and see about staying in the spring. When do transfers start to apply?(if it comes to that) I can't see getting in so much debt for a bachelors degree, but it seems like everything is high today. I hope to be making about 3-5,000 more next year to help pay off credit cards, so I don't see any relief if our earned income goes up. We already have a second mortgage for house repairs......well, I'm not the only one singing this song. ; )
Our public colleges around 17-20.000 if you board but usually don't give aid. The one my daughter applied too just gave her the stafford and an opportunity to apply for a small scholarship. So one day or year at a time.</p>
<p>Bet this was one of those so-called "need-blind, 100% of need" places, too?</p>
<p>But...sitting from where they are. There are people who sit on hundreds of thousands, or even millons, of dollars in IRAs or Keoughs, and etc., none of which gets figured into the financial aid equation. So when some of it "magically" becomes income, you really can't blame the colleges from treating the income any differently than the IRS does.</p>
<p>It's too late now, of course, but this is one reason why it is very important to get tax returns done early and in to the college as soon as possible, especially in the year that the student is applying to multiple colleges. You really can't count on a financial aid award unless it is based on final figures for the year, with all documentation that the college will have. Relying on the FAFSA isn't good enough, because there are things that can be missed, especially with a complex tax situation.</p>
<p>I agree with you mini, but our IRA is very paltry, I wish we had that much! But, worst case scenerio, she has to go to a public or commute and save for her masters degree or the last 2 years of college at a LAC or National U. When I hear of rich parents playing the system, I cringe, but that's the world we live in and why they stay on top, (but I couldn't do most of those things) I did learn not to have the kids save in their passbooks years ago, but not having a lot of loose money I have a little less savvy. I suppose though, you really need to have more when that is the case! I wont make the same mistakes with my twins in 4 years.</p>
<p>Our aid was cut a bit too...last minute, my updated FAFSA was in by May 1st or before. I didn't think after numerous calls about other bills, we would get this revised bill so late. I was told everything was fine just last week!
I found though, especially this time of the year, many inquisitive questions, no matter how nicely put, gets you more firm answers from very tired workers. My son's school overenrolled a LOT,so we will see how it goes. We still are paying just 8-9000 more than public, but as tuition rises, we will reevaluate.</p>
<p>Sorry about your situation, and I am not finaid savvy. But I can answer your question about transfer apps. Most are due around March 15. Some sooner; UCs a LOT sooner (Nov). Some later. Transfer apps vary in intensity of effort required from quick online, fill-in-the-blanks/no essay/no recs to the full blown multiple essay requirements of the very most selective schools.</p>
<p>If you decide/need to go that route, PM me or post over on the Transfer board. Be aware, though, that many schools which offer good merit $$ for freshmen don't do the same for transfers. Not sure whether you would be looking for merit aid in a transfer, or a more affordable in-state or what.</p>
<p>Keep in mind that for the 2nd year, there are additional ways for kids to cut expenses. For example-- a kid can get an RA job to reduce housing costs. My son was living in a suite-style unit his 2nd year, with a kitchen - so we dropped the college meal plan entirely. He ate a lot of rice and beans and ramen that year; fortunately he's a vegetarian and likes eating that stuff. Plus, depending on major, a kid's summer earning capacity might increase, if the student is proactive about summer internship/employment opportunities. </p>
<p>Roughly speaking (and this very rough), your EFC goes up $1 for every $2 you earn -- since your taxes go up, too, you don't keep much of your increased earnings... but you actually do come out slightly ahead if you make more money when you add everything up.</p>