We received a postcard from the out of state university my daughter will be attending notifying us we may be eligible to have our financial aid adjusted. The website indicated adjustments may be available if you had a job loss or income reduction, excessive medical expenses or IRA withdrawl. (There were other reasons which did not apply to us) I inquired telling them we were not interested in loans, but a grant for housing cost reduction would be helpful. What type of aid could they offer to an out of state student?
BTW; my husband retired at age 62, we withdrew $20k from his IRA. Our household income went from $125 to $40k.
Can a financial aid adjustment make us Pell grant eligible or can they only give institutional money? Its some effort to apply as you must sent copies of tax returns, etc.
Thanks.
The school is letting students & their families know that there is a process for recalculating financial aid if one of the events listed applies to them. There is no guarantee that it will result in more aid, but it might (depends on the individual situation). If you don’t need money, I suppose it’s not worth it to follow the process for reconsideration. If you do, though, it could be worth a little effort. An income drop like the one you cited is a big one - I think it might be worth following the process to see if you might get some additional financial assistance.
How would colleges typically look at a student asking for professional judgment due to a drop in income because of a parent’s voluntary early retirement (although we don’t know the reasons for OP’s H’s retirement at 62)?
I assume there’s variability from college to college in how they might treat this?
I can’t answer for all schools, but in my own experience (not top tier, big endowment schools), I wouldn’t have questioned the “why.” I would have assessed based on current situation. I would have wanted a written statement indicating that the parent was not planning to return to work, however (because that would change things). I would have looked at any income … pension, SS, 401k/IRA distributions, and Roth distributions. I also would have wanted to know about assets, including any investments (but not home equity where I worked). If there was a buyout, that lump sum would be considered available to pay for college if it wasn’t in a qualified retirement plan. After looking at the financial situation as it currently stands, I would adjust aid accordingly. That could mean Pell, if it applies. It could mean institutional aid, but it may not, depending on the numbers. It could mean subsidized instead of unsubsidized loan for some of the offered federal loan. It’s possible that nothing would change. But I figure you don’t know if you don’t try.