<p>I haven't spent much time on this forum, but I know there are some real experts here so I thought I'd give it a try.</p>
<p>A friend's dh lost his job last fall. He received a large severance check. Of course, the FAFSA and CSS Profile in no way reflect their current situation, and the schools are saying they aren't eligible for FA. The reality, of course, is that there's no income right now, though it looks like the make a lot more money than even they used to thanks to the severance.</p>
<p>Any advice for how to approach the FA offices? I don't believe they've approached any school as they're waiting for their child to narrow the choices. Is this an instance where professional help is in order? TIA</p>
<p>Has he been able to find another job?
I think that for freshman year he will have to spend some of his severance, but he should be able to get an idea from the financial aid offices as to whether they will increase aid next year.</p>
<p>I think most financial aid offices have a form parent(s) and student can complete when there is a change in financial situation. My husband lost his job last fall (unfortunately, there was no severance pay–that would have come in handy) and I’ve filled out several of these forms at various schools. Most require a copy of the termination letter, some have asked for confirmation from our state unemployment office and some have asked for pay stubs. I still haven’t heard back from any colleges regarding if our FA will be adjusted so I can’t tell you if there is any hope for your friend.</p>
<p>I don’t believe he’s found another job. The wife doesn’t work.</p>
<p>MSN, Providing copies of the termination letter is a good idea.</p>
<p>Would taking some portion of the severance money and putting it into an IRA or other vehicle help? I’m sure they need at least some of it to stay liquid to pay bills.</p>
<p>The year that money is put into a retirement account, it will be added back into available income- but the next year it wont be counted.
Has he applied for unemployment?
Is the wife unable to work?</p>
<p>My H was laid off after my D began college. He then found another lower paying job Although we notified the school when we heard, they were not able to adjust fin aid until we could send a copy of the new pay stub.
Incidentally, services like Tuition management systems that help you break tuition into monthly payments are helpful when money s tight.
[Afford.com</a> - Home | Tuition Management Systems](<a href=“http://www.afford.com/]Afford.com”>http://www.afford.com/)</p>
<p>In situations like this, college takes a back seat. If there truly is a possibility of the parent getting another job in the range where he was earning, then the best thing to do is to take a gap year. I have a friend who had TWO of her kids do that when her husband got a large severance check which he rolled over into a business, but it inflated their income that year so that neither kid was eligible for any financial aid. One was already in school and was getting some aid, and the other was applying. So they went to work for Dad and helped him get his business going that year, and the following year, they went to college with a package that reflected their true financial situation better. The daugther went to a school very generous with aid, but they refused to ignore the one time payment upon appeal. They get them all of the time, they said, and that is the way they handle them. Gotta give a cut towards the college expenses that year is the way their rules work. </p>
<p>I don’t see how rolling the money into an IRA is going to be any solutions since the financial aid process is such that all retirement contributions that are deducted from income for tax purposes for the given year, have to be added back in that year. They figure that money could be going to them instead of towards an IRA. Rolling it into an IRA could help for taxes for last year, and if they can get around the 10% tax penalty in taking it out, that might be a good move for other than college planning reasons.</p>
<p>There is no good solution for this with the colleges as they are not going to want to give out money on what could be a temporary situation, and the family did get severance to bridge that gap. There is simply no telling whether this will be permanent or not, and sometimes it is. This could be early retirement. So to make a commitment to a school when things are so up in the air is not a wise financial move. I really thing taking the year off and starting over with a better idea of what the future holds is the way to go.</p>
<p>MSNDIS has described the “Special Conditions” paperwork. If it isn’t easy to find by searching the college/university financial aid webpage, your friend should pick up the phone and call each of the places on his kid’s list and ask about it. If it is filed early enough, it might be able to be considered in the first round of financial aid application. kelsmom is the one who told me where to look when Happydad got the ax at the end of February.</p>
<p>Happykid’s U asked for 2012 tax transcripts for both parents and child, copies of the final paycheck including severance pay, a copy of the termination letter from the employer, and the statement from the state unemployment office indicating which benefits Happydad is eligible for.</p>
<p>Thanks for all the ideas. I may direct my friend toward this thread.</p>
<p>ek, I know the wife does some work for a nonprofit, but I’m not sure whether it’s paid.</p>
<p>I’m curious about the idea of deferring a year. If the student were to defer rather than start over next year, I’m guessing that they would file financial documents and get a new FA offer based on this year’s income? The good news is that there are schools where the student got merit aid offers.</p>
<p>If the school won’t adjust aid based on the fact that dad hasn’t found employment then take the merit offers.</p>
<p>Another consideration. Once the dad finds employment, the family may find itself in “catch up” mode, with credit card debt, etc. They may find that having their child attend the merit aid school best in the long run so that they can use their funds to “catch up” rather than pay high tuition costs.</p>
<p>They need to contact each college and find out THAT school’s procedures for a special circumstances consideration. The schools will have a process for this…and will tell you what to do.</p>
<p>We sat down the the FAO at my school and explained, and furnished, my mom’s lay off notice for the end of the year. They handed us a “reconsideration” form but said that they needed proof of at least a 10 week gap in employment, and proof of unemployment payments to actually process the request. At that time they could, if needed, adjust the FA I was to get, even if it was after the initial payments were due.</p>