<p>I have searched the site but can't find a specific answer to my question and am hoping someone can help.</p>
<p>My daughter is a freshman at a college in NYC, and we had a family contribution last year of 0 based on my 2011 info. She therefore received a very good financial aid package.</p>
<p>Last year my mom passed away and she left my brother and I her NJ state pension annuity to split. I opted to take mine in a lump sum, paying the highest amount of tax on it at 20%. I did not roll it into an IRA because I am also a college student and was in the midst of completing my student teaching so was not working, but was collecting unemployment as income until it maxed out in October. I used the inheritance money to pay off my own loans, pay off other debt, and cover other misc costs for my daughter, as well as recover from Sandy damage not covered by FEMA. Therefore, the balance remaining is significantly less than I received.</p>
<p>I am unsure how or where to put this on the FAFSA, or how the college will handle it. Without the inheritance, my income this year was the same as last year and would result in another 0 EFC. And unless I find a teaching position asap, I don't see the coming year being as lucrative either though my getting a position is imperative. </p>
<p>My question is, how badly is this going to hurt her? It was more than 50,000 so I know she can kiss any of the federal needs based grants goodbye, but I am hoping if I talk to the college they may consider my circumstances and see that the inheritance was used responsibly and is a one time income boost, not a permanent situation.</p>
<p>I have yet to file my taxes and am doing so this week, so have postponed the FAFSA but want to do the estimated app, until the return is available. Not sure what to put, and am very worried that I may not be able to afford her to stay there next year. :( If it is only going to affect her tuition to about 20,000 I can handle that. Any more than that and she will not be able to go back and I have to tell her that...not looking forward to or wanting to do that at all.</p>
<p>Thank you for any help you can give.</p>
<p>Depends on the college. You should write a letter of explanation. I had a similar situation. I wrote to all the colleges my daughter had applied to. You should get your taxes done asap. You should talk to your accountant about an estimate.</p>
<p>Thank you for your response. I am meeting with the accountant next Sat. He really can’t give me an estimate since he has not seen my income vs. what can be deducted to come up with one and won’t before we meet on Saturday. Should I even call the college before then? I plan to definitely meet with financial aid at the college personally and write a letter of explanation as well. Thankfully my daughter does not have any of her own assets to consider on the FAFSA, and I am even more thankful my mom did not leave the money to her or this would be an even bigger nightmare.</p>
<p>When is you Fasfa due? I have a son in college…a junior now…Im nervous about his last year. I also have my daughter in her entry year so I get what your saying. I may meet with my sons financial aid office in the spring as well. Thats all you can do is explain the situation.</p>
<p>FAFSA is SUPPOSED to be done before Feb 15th for all colleges, but being a little behind is ok; they do not even register for Spring classes until after break so I have at least this next week. We did not even know she was accepted into her major last year nor did we accept the offer until the end of March. I know I personally have done my FAFSA later than March and still received my full package. </p>
<p>If I find a teaching position or something in a related field I will not be as worried, I am just trying to project how much more things will be without the full aid she has now. I am sure they will increase her loans but how much would they be willing to do that? Certainly not enough to cover the deficit made by the loss of grants right? </p>
<p>I hate worrying that she might have to leave. :(</p>
<p>I think you could just do your FAFSA now with low ball estimates, like your usual income, then do the correction when your real tax return is ready. That just saves your place in line for all the low EFC aid. Some school might be willing/able to do a professional judgment and adjust the amount of the lump sum by some factor.</p>
<p>Are you going to have to claim the inheritance on your taxes? If not, the only effect it will have is that you will have some remaining assets … but these may be too low to make a difference, or they may be ignored if you qualify for auto 0 or simplified needs EFC formulas.</p>
<p>If you have to claim the inheritance on taxes, you will probably want to request a special circumstances review … the aid office may remove the inheritance from income & recompute your EFC without it. It will be counted in remaining assets. There is no guarantee the school will do this, but many will.</p>