<p>My friend is attending WMU, this is what he has to say....</p>
<p>My mother retired this past year, and our income has been very well overstated on the FAFSA. Because of this, Western Michigan (where I intend to go) has only offered me four thosand dollars in loans both subsidized and unsubsidized loans. </p>
<p>This is going to make it impossible to attend WMU. Is there any way I can get this changed? I asked for an appeal form and they haven't given one to me yet, I just don't see how this is reflective of our normal income which is much, much lower.</p>
<p>Thanks</p>
<p>I know this sounds a little harsh, but harsh is the name of the game. Although it is certainly your mother’s right to retire (and I commend her for it), because FAFSA and the CSS PROFILE are based on the previous year’s income, there’s not much you can do. Your mother chose an inconvenient time to retire. If you attend, the next year (your sophomore year) you may qualify for more need-based aid because you will be filing on your current retired income, but continuing students generally have a tougher time of receiving merit scholarships - what you get as a freshman is, at many schools, what you get.</p>
<p>Call the FA office and ask about a special circumstances review. You can search for more threads on this, but colleges can adjust your EFC for certain reasons. I know loss of an income source is one of them, and hopefully retirement will qualify. I believe it’s common that they ask you to wait at least 6 months after a job loss, but retirement may have different rules since it’s more of a permanent thing (or used to be anyway). Good luck!</p>
<p>Calling the school is always a good thing to do because you are going directly to the source. I can tell you that I know a number of kids that are in the same situation you are, and some of them sat out a year because they could not get aid in a pension payout year. Some good friends of ours got a relatively large retirement lump sum, that they used to start their own business, but that blip on the income scale cost them financial aid.</p>
<p>Call the school and ask, BUT when I have heard of this being adjusted it is based on the next tax return. For example, if your friend was a freshman now and the over stated income was 2007, the school could not adjust until the 2008 tax return was provided. It is also up to that fin aid dept as to whether they will determine the change to qualify for special circumstances</p>
<p>The Dept of Ed is urging FA admins to look at ways to help students and families to the utmost extent within the rules this year. They’re basically asking them to use their professional judgement to adjust EFC’s where possible/appropriate.</p>
<p>From the 4/2/09 letter from DoE’s “Dear Colleague” letter:</p>
<p>Your thoughtful use of professional judgment, especially to address a student’s financial and family circumstances that may have changed from the base year information originally reported on the student’s FAFSA, may be critical in determining whether the student can enter or continue in postsecondary education. A changed circumstance certainly includes the loss of a job or a reduction in work hours or wages, but it also includes, for example, the income loss associated with a prospective student’s decision to leave the workforce or to reduce work hours in order to return to school.</p>
<p>When you make adjustments related to the student’s or the student’s family’s income, it is appropriate to use information that realistically reflects the individual’s and/or family’s current and near-term economic situation. For example, for an individual who has lost a job or has taken a significant salary cut beginning in November of 2008, you may choose to project income for the next 12-month period (December 2008 through November 2009) and use that figure instead of the base year income (calendar 2008) that was initially used in the calculation of the student’s expected family contribution (EFC). Of course, you should seek to obtain, and maintain verifiable third-party documentation of the changed circumstances in order to support your decision to use professional judgment. By way of example, if an individual has lost a job, and you choose to project income for the next 12-month period, you should seek to obtain adequate documentation of the individual’s loss of employment.</p>
<p>[IFAP</a> - Dear Colleague Letters](<a href=“http://www.ifap.ed.gov/dpcletters/GEN0904.html]IFAP”>http://www.ifap.ed.gov/dpcletters/GEN0904.html)</p>
<p>I would think that in the case of someone retiring, it would be important to know if the person was laid off into retirement or voluntarily left a job. </p>
<p>I don’t understand why a parent would voluntarily leave a job just as a kid is starting college UNLESS they have the money banked to pay their share. Retiring in order to reduce income for the purpose of qualifying for more aid, IMO, isn’t really logical</p>
<p>Sue - Many companies/public employers are currently offering retirement incentives to cut their workforce. The next step is often layoffs. It may be that this obviously older parent calculated the long term benefits to be more advantageous to their financial situation. Health, stress, and a whole host of other things can influence a retirement decision.</p>
<p>There are also pension plans that allow the participant to roll his or her benefits into an insured annuity. If you’re working for a company that may be facing bankruptcy, getting a pension locked in now through a lump sum distribution or an outside annuity may be a very financially prudent choice. The Pension Benefit Guarantee Corporation also treats current pensioners somewhat better than those who have not yet retired. </p>
<p>Talk to the FA officer at the school. If that doesn’t get the OP where he needs to get, a gap year is almost certainly warranted. If you do take one, be sure to read up on financial aid and have mom do so too so that you make sure that assets are appropriately allocated.</p>