<p>Whoa! I just learned that my position will be eliminated after being at the same company for 26 years. In 60 days I'll have around $42k (after taxes) as a severence. Of course, my head is reeling, but an initial question:</p>
<p>So assuming that 4 yr college is still a 'go'....</p>
<p>As far as college financial aid in particular, how does this affect things? </p>
<p>Financial aid looks at last year's taxes. WHat happens when, right in the middle of the application for FA, you lose your PRESENT job? Is this handled as a so called 'special circumstance'? How does one handle THIS special circumstance?</p>
<p>FA looks at income and assets</p>
<p>Last yr we had income and assets. Now, we have no income and SOME assets.</p>
<p>Our total assets after the severance would be around $50k in liquid assets, money. House equity around $106.</p>
<p>because finaid is based on last years income and taxes- the package will be written using that.
You can give the colleges your child is considering a heads up & see what their take is.
Our experience ( our daughter began freshman year in 2001- her dad was laid off after 9/11), was that as soon as we heard we let the college know with a copy of the WARN notice.
When he actually was laid off ( and rehired at lower position) we sent a copy to school, when he recieved a copy of paystub with lower numbers, that is when they changed the aid to reflect the new data ( they were very fast)
We also participated in teh Tuition Management Services plan, which enables you to make payments monthly instead of by semester.
It made it much easier to budget.</p>
<p>Also you probably already know that the best time to find a job is while you still have one. Since you have two months you may even find a better position by the time you leave your present company. :)</p>
<p>thanks, emerald. You are saying that FAO's might re-do FA based on the new reality of less income. What about this question: say I get a job with similar salary as now, but I have that lump sum deposited after FA application. Do I need to tell the FAO about THAT extra asset, or would that turn up in next year's FA app?</p>
<p>Losing a job is a basis for a special circumstances adjustment. With the unknown quantities of whether you will find a new one quickly and any possible severance payments you are definitely in a complicated place. Contact your financial aid department as soon as possible and ask how they handle this and what supporting documentation you will need.</p>
<p>We had a special circumstances adjustment last year though it was perhaps a little simpler than yours (very large out of pocket medical expenses plus loss of benefits as my D had been receiving SSI due to her dad being on early retirement income).We found the financial aid people to be very willing to help us.</p>
<p>Good luck both with the financial aid situation and with your job situation. My H was with his company 27 years when the same happened to him several years - it is a bit of a shock to the system.</p>
<p>I am so sorry to hear about the loss of your job. I have been trying to return to work after taking many years off to raise my kids, and I know the realities of today's job market. Fortunately, you have recent skills (not me!). Hopefully, you'll find something good soon. Definitely contact the f.a. dept. at the college. Different schools handle special circumstances differently, but it should be considered a need-to-adjust case. I worked in f.a. back in the late 80's, when there was a severe midwest drought. We adjusted the f.a. packages for kids whose parents owned farms. Most schools are committed to working with parents to figure out the most accurate representation of their true financial situation. Good luck.</p>
<p>I have been reading this site for several months and find the information to be useful. Recently, a dilemma presented itself to me. </p>
<p>As a single parent (widowed), I have raised my daughter from my salary from a 60%-time job and SSA. The SSA will end when daughter graduates from
high school next year. Without the SSA, my annual income from my job is $16000 and I earn about $12000 in interest.</p>
<p>Running the financial aid calculators, our EFC is $2104 Institutional and $1100 Federal. I have savings of about $200,000 and a home paid for that is worth about $300000. We live modestly yet I do not feel we want for anything.</p>
<p>My dilemma is: I was recently offered the full time (much more demanding and stressful) version of my job. I have worked at this same job on a 60-70% basis for almost 20 years. The job would pay 40K a year and includes health insurance and retirement. I am 54 yrs old.</p>
<p>I put these numbers into the finaid.org calculators and my EFC increased to $29600. (For fun, I put in the numbers on a hypothetical marriage to my current boyfriend and with his income and my current income, the EFC is $61000.)</p>
<p>The dilemma is, by taking the fulltime position, I pretty much increase my income to about $52000 a year and have a larger EFC.</p>
<p>Am I wise to remain a part-timer with a lower EFC? (Marrying and getting a $61000 EFC is pretty much a no-brainer!)</p>
<p>Thanks to all. My daughter is a very good student and wiil be applying to Penn State; Syracuse U; and a local state U safety.</p>
<p>Off the top of my head, I would say no. Your EFC is lower with the current job, but so is your pay! I doubt you would get enough grant aid to fill your gap (COA-EFC) at the schools you named. How would you pay what you owe? If you get the job, you may get less in terms of grant money ... but you will have more money available. You will also have a guaranteed future income stream, so borrowing makes sense (you'll be able to pay it back). I think you will be better off making more money.</p>
<p>thanks for the input. Looks like any fin aid wd not be be the result of objective rules, but with the 'professional judgement' of the FAO. </p>
<p>The other thing is that I have a job and I do not have a job. When I apply for FA (by 3-1), I will still officially be employed, but will have a termination date three weeks hence. I'll talk to the FAOs and see what they say.</p>
<p>joecollegedad - I'm so sorry about your job loss. I've been through that with myself and my spouse and know it could happen again at any time. It was a very difficult time but we did eventually find new and perhaps better employments. Good luck on your career search.</p>
<p>We were in a similar position, but the job termination came during the first semester of the child's freshman year. We got EVERYTHING ready to file a special circumstances letter...all of our finances, all of our expenses, etc so that when the job termination took place we would have the info to submit ASAP. We called the finaid office and they did politely tell us that the severance package was viewed as income also, and that would be considered. I believe that is the case everywhere. In our case, that "extended" pay from the lost job for about 2 months. The good news was that between the time of the termination notice and the severance running out, a job was found. It wasn't the perfect job, but with a kid at an expensive school it was a JOB. So...my suggestion...get all of you info ready. When the time comes, call the finaid office and mention this (at the appropriate time...), and find out their procedure for filing a special circumstances letter (which would include your termination notice and a letter with supporting documentation about income loss, and asset reduction). In the meantime, if you are filing a Profile, I believe there is a spot (someone else will correct me if I'm wrong), that asks for projected income for 2008.</p>
<p>the sev pkg is treated as income. And I thought I was suddenly poor and destitute - or at least more worthy of a little more FA. But pt taken - get my data together.</p>
<p>I just went through the FAFSA, and I did not see any means of communicating job loss in 2008. Am I missing it?</p>
<p>Where, then would I communicate this? Just with correspondence with FAOs?</p>
<p>the link above says this--</p>
<p>merit professional judgment adjustments and were added during the 1998 reauthorization of the act. Financial aid administrators are not limited to these circumstances, nor are they required to use professional judgment in these circumstances,</p>
<p>There is no way to show it on the FAFSA form. You submit FAFSA then contact the financial aid department of your school(s) and ask for a special circumstances adjustment for loss of income. See link in post 4. Also this one.</p>
<p>thumper1, you are right (as always!), there is a spot (PF-100 for Parents and SR-100 for Student). and then there is the ES (Explanation / Special Circumstances section) where the unique situations can be explained - all in the PROFILE. I don't think FAFSA asks for future income.</p>
<p>Joecollegedad, I am sorry about your job loss. But, as much I have heard, read in these forums, the college FAs are flexible, good listners and would understand these unique circumstances. I wish you good luck.</p>
<p>swimcatsmom, thumper1 and others, had a question about the link swimcatsmom posted shortly. An extract from the page:</p>
<p>Job Loss or Income Reduction
*If one of the parents lost his or her job, it is appropriate to make an adjustment even if the parent voluntarily quit the job and even if the parent is not the primary wage-earner for the family. It is also appropriate to make adjustments when the parent has been subjected to a pay cut. It is also appropriate to make adjustments when the student has lost his or her job or been subjected to a pay cut. It is also appropriate to make adjustments when the change in income is due to the wage-earner changing jobs (i.e., accepting a job at a lower salary), accepting early retirement or taking a sabbatical, not just when the wage-earner is faced with an involuntary job loss or pay cut. </p>
<p>Adjustments should be made to both the AGI and earned income. *
Does this mean we should adjust the AGI of 2007 in FAFSA - that is the only AGI reported in FAFSA. I was wondering if that adjustment is done how would they reconcile with the W-2 / Tax returns for 2007 submitted; since we aren't including any explanation (or calculations) any where. Or, is there any other part that addresses this?</p>
<p>You do not adjust anything. You file FAFSA with the correct figures from your tax return. Then you apply to the financial aid department of your school for a special circumstances adjustment. You provide supporting documentation to the financial aid department. If they approve it they go into your FAFSA and adjust it. (The link is to help you understand the rules to see if you may be eligible. It talks about the rules for financial administrators to make adjustments - it is not a do it yourself guide).</p>
<p>Again - do NOT adjust your FAFSA figures yourself</p>
<p>I'd suggest that the parent indicate that the severance package is really an asset, not income, as it will be treated by the IRS. I had a client who was told by a college that his winning lawsuit amount of $40,000 is income. I suggested he write to the college and say it's not income but a one-time "gift." The college agreed and gave the son more aid.</p>