FAFSA and retirement money

Paying for College
1

<p>It was suggested on the Parent's forum that this forum might have some answers. If so, Thanks!</p>

<p>I'm trying to help a co-worker whose h.s. sophomore will be their first to go to college. She is asking me to share some advice on admissions procedures, financial aid, etc. They may qualify for FA, but there is a 'catch' as her husband is over 70 and retired. He had a nice retirement, opting for a lump-sum pay out which they rolled over into a 401K-type account rather than take a monthly pension. As a result it looks like they have a lot of money, but it is his/their retirement money and they are not in a position to use it for college expenses for their kid. My friend basically works so the family can have medical benefits and they live on her husband's retirement, so this money has to last even through her own retirement. She is about 50 YO. She completed a FAFSA worksheet that resulted in a really big EFC. Any thoughts? Is there room for 'special circumstances' on that form? A real person discuss the situation with?
This is really going to impact the choices their child will have.</p>

2

<p>401Ks are not reported as assets on FAFSA though money withdrawn from them is reported as income (my husband is also retired)..</p>

<p>If you need more detailed instructions for how to answer the FAFSA questions they can be found here:
Completing</a> the FAFSA 08-09/The Application Questions(1-31)
Detailed explanations of what to include in assets are here:
Completing</a> the FAFSA 07-08/The Application Questions(81-83)
where it says

[quote]
Do not include the value of life insurance and retirement plans (pension funds, annuities, non-Education IRAs, Keogh plans,etc.)

[/quote]
</p>

<p>Also keep in mind that some schools (a lot of private schools) also require CSS/profile which asks for a lot more financial information than FAFSA</p>