<p>Anyone have any experience/advice handling extraordinary income on the FAFSA and CSS? I took a buyout when I left a job at the end of 2011 and then started a new job early in 2012. My buyout was paid during most of 2012 driving up our income significantly from normal levels during 2012. Income in 2013 will return to a normal level. I am obviously concerned that this will skew the EFC, etc. from what we would be expected to pay based on 2013 income.</p>
<p>Are there any options to address this situation? I am assuming the best option is to contact the Financial Aid offices of the schools my son is applying to as opposed to addressing on the FAFSA and CSS forms.</p>
<p>I don’t have any experience with this but will reply since no one else has. One way to look at it is that your EFC should take a hit for one year because you have more money to contribute. FAFSA doesn’t have a way to address this. I believe I’ve read profile does but could be wrong. But I agree, call each school and ask if aid will go up after the one year blip. Most likely schools won’t take away the blip for the first year, you do have the extra money, hopefully you’ve saved it. You mostly need to know that aid will go up when you file FAFSA/profile each year after the blip goes away.</p>
<p>You can request a review by the financial aid folks at the university. BUT the reality is you had extra income in 2012 and some of the income COULD have been saved for upcoming college costs. I would NOT expect the college to completely delete this buy out…</p>
<p>A FAFSA school may be willing to adjust that income out as being a one time event, you might put a few more merit aid/FAFSA based schools on the app list to cover your bases</p>
<p>You can apply and request professional judgement for that income. However, close friends of ours in that same situation, with two kids in college were denied any leeway on the exact same scenario you describe. One student took a leave of absence that year, and the other took a gap year because the difference was so great in what the cost would be that year. The following year, both students got nice financial aid packages, and there was the extra bonus of still another overlap year with a third child because of the year off, down the road, but at the time, it was frustrating and upsetting for all concerned.</p>
<p>Thanks to all for the suggestions. We have saved a portion of the funds assuming we would not get any adjustment. I will definitely follow-up with the financial aid offices at the individual schools as it appears to be the best option.</p>
<p>You can apply normally making sure you have some merit schools asm Mom2coll says and other lower cost options, and if a “dream school” accepts your child, a full need met school, and won’t budge on the financial aid, then have your child take the acceptance and take a gap year. So much to do in such a year, and then go the following year with the financial aid now in a normal state so that the aid comes. It all depend on how much money one is talking about. For my friend it was a huge difference. They saved close to $80K having taken that gap year with those two kids with that unexpected bonus of having the third in school for an extra overlapping year as well when that was done.</p>
<p>As others have said, you can ask for Professional Judgement (that would have to addressed at each school). But from the school’s perspective, you got a buyout at the end of 2011 and got a new job at the beginning of 2012. Why shouldn’t they expect some of that to be available for school?</p>
<p>Part of the buy out sounds like it took place in 2011. Only income information from 2012 will be used on the 2013-2014 financial aid application forms for computing need based financial aid.</p>
<p>This is why you have to be extra careful about buyouts. It drives income up, which impacts both taxes (not just marginal tax rate, but also phase-out for various deductions and credits), and also financial aid. Some schools may be willing to adjust, but they are likely to look at the whole picture - the age of the parent taking the buyout, and proximity to retirement age. Directing it into a retirement vehicle can help with taxes, but not financial aid, as it would still be untaxed income.</p>
<p>Given that the buyout was presumably a one-time event, a seasoned financial aid professional might be inclined to use professional judgment to remove the value of the buyout from your AGI, and add the same amount to your reported assets. The net effect would be a significant reduction to your EFC under both the FM and IM methodologies, and would yield a result that more accurately reflects your ability to absorb educational costs relative to families with similar resources. I recommend that you appeal on the basis that this one-time event is not cash flow, so is more accurately accounted for in needs analysis as an asset, and I think you just might receive a favorable response.</p>
<p>Many schools will make the adjustment as FinAidPro suggests, although there is no guarantee. The thing to remember, though, is that it might not make any difference - depending on your personal financial situation. It’s worth a try, though.</p>