I don’t want to get too specific, but basically one of my parents lost their job last year. They had a “buy out” (sorry if it’s worded weirdly. I’m not used to this term) so now it looks like they have a 6-figure income when they filed their tax returns, which is NOT true at all. My college advisor told me to update my FAFSA anyways with the 6-figures but to also explain the special situation to the financial aid officers at the college I am attending. My question is: when is a good time to schedule an appointment with them? I haven’t given in my deposit fee yet, but I have a good feeling which college I will be choosing. Is there anything else I should do about my situation?
NOTE: I only said they/their because that’s usually used as a gender neutral term.
@mom2collegekids Sorry for the late reply - life’s been hectic.
No, the parent hasn’t found new employment as of yet. They told me they’re temporarily retired, if that changes anything. The school I plan on attending is an in-state public.
Was the money she got supposed to be a severance for replacing lost wages or was it some kind of pension plan that was paid out?
I’m asking because I worked for a company once and they were bought out by another company, they kept all the employees, but the existing pension plan had to be paid out to all the employees. That money was paid to me in a check but I had 60 days to roll it over into an IRA.
I think usually a severance is supposed to pay the regular salary to the former employee for a certain amount of time.
Did your parent then get much more than his/her normal salary?
How much aid would you have qualified for with the normal parent income? You might have to pay more out of pocket for this year, but if your parent makes less this year then you might qualify for more aid next year.
No. I mean that sometimes the severance amount is given as a lump sum to a terminated employee.
Sometimes the severance is paid, like a paycheck every two weeks or whatever…for the allocated time period.
A member of our family got three month’s severance as a lump sum when his company closed an office. Another family member got “paid” every two weeks for 12 weeks. It all depends on the arrangement with the employer…YMMV.
I would imagine that most employers would not carry severance into multiple years as they would want to close this employee out at the end of their fiscal year.
I mean since the income with the severance was much higher than usual, did the parent receive a severance worth more than a year’s salary in a lump sum?