Hi everyone! I would really really appreciate any insight or advice anyone might be able to offer for my current situation. Before I start, here is a bit about me! I am currently a Senior in High School from Ohio interested in studying accounting and applying to University of Cincinnati, The Ohio State University, Northeastern University, and Washington University in St. Louis. My stats aren’t super stellar, 4.1W GPA and 30 ACT (32 SS), but my extracurriculars are strong, and I’ve shown a lot of demonstrated interest towards these schools. Here’s my dilemma. My parents are divorced, and for the FAFSA, we reported my dad’s information (reported both parents on CSS). We are in the middle class; He makes about $60,000 a year, so we were hoping to receive financial support from these colleges. However, in 2019, he made the decision of pulling a pretty big sum of money from his retirement fund to pay the downpayment for our house (I want to be a bit vague about this for privacy reasons, but we had just moved to a new district a few years prior, and he’s always lived in an apartment until that point). He was very hesitant to do this at the time, and now he has just realized that this puts us in a very disadvantageous position for my college. His income listed on his 2019 Income Taxes is a little over double what it actually is from years prior, and that, in turn, has given us a pretty high EFC of $21,595 (and Direct Stafford Loan Estimate of $5,500), according to my FAFSA. We are now not qualified for Federal Pell Grants, and I doubt that we will receive much need-based aid from colleges, even though we really do need it. We are planning on appealing the financial packages when we receive them because this was a one-time thing, and we’re hoping that colleges will understand. In addition to us doing this, does anyone else have any more suggestions on what we should do? I truly don’t know what to do, and I’m so stressed about this whole process. In addition to this, my sister has autism, so most of our family’s financials go towards her therapy and treatments, but I don’t think that colleges will take this into account or even care. I’m planning on applying to many outside scholarships during my second semester, and after finishing my college apps. Does anyone have any suggestions in that regard as well? I didn’t know who else I could ask advice from, and I know that there are so many knowledgeable people here, so I would really appreciate any help. If you guys need me to clarify anything, please let me know! Thank you again.
OK, there are several things to unpack here.
First, can your parents contribute anything toward your college cost of attendance?
If so, how much per year for four years? Add that figure to the $5500 federal loan for freshman year (which is the maximum EVERYONE can get; it’s not income-dependent), and that’s the dollar amount you’re starting from.
Second, let’s look at the schools you’re applying to and whether they give financial aid. You’ve applied to two public universities in Ohio. They do not promise to meet demonstrated financial need. So even if your dad did not take the 401(k) distribution, they still might not cover you fully.
Have you applied to all relevant merit scholarships listed here?
https://www.sfa.osu.edu/incoming-freshmen/about-aid/types-of-aid/scholarships
Are you eligible for any of these need-based grants that OSU offers?
https://www.sfa.osu.edu/incoming-freshmen/about-aid/types-of-aid/grants
Third, Northeastern and WashU are meets-need schools. If you get accepted, they promise to meet 100% of demonstrated need. You have not said anything about your mom’s income, so it’s unclear what your need actually is.
Fourth: About the 401(k) distribution. You should definitely appeal after you get your FA offers. You’re right that it’s a one-time boost in income, but I’m not sure if the reason for it – a downpayment on a house – would be considered a necessity. Typical reasons that are often granted an exclusion from income are need to pay excessive medical expenses, need to cover basic expenses due to unemployment, or need to rebuild after catastrophe such as hurricane or fire.
Fifth: You definitely should cite your sibling’s excessive medical expenses as an extenuating circumstance. Do that in the appeal.
I think you need to expand your application list. Apply to more meets-need schools. They are the ones most likely to look favorably on you appeal. In addition, I think you need to look at schools where there is a high likelihood of getting four years of merit aid. In general, you need to be applying to a lot more colleges. You need to be spending a lot more time researching colleges that suit your financial situation than applying to outside scholarships, which is rarely fruitful.
You definitely should appeal. Be prepared to document the retirement cash-in as well as documenting his subsequent use of that money for the house. It’s possible schools will remove that income from the AGI & recalculate your EFC. There is no guarantee, but it’s absolutely worth trying.