<p>I just received a call today from the school I will be attending this fall. They said that there were discrepencies between my original financial aid application and the FAFSA and that they would need us to call as it would affect my aid eligibility. The difference is in adjusted gross income and it's higher in the FAFSA form due to a family inheritance. Now, I'm worried- the school is already giving me very little in terms of scholarship money and I don't want that little bit taken away. The inheritance received isn't a huge amount or anything; does anyone know how to approach this situation so that I don't lose what little money the school is giving me? I have a sibling who's also in school and my family is currently paying off loans for my oldest sibling who has graduated. If we explain that our added income (from the inheritance) will be used to pay off his loans and for my sibling in college, do you think that they'll be understanding? Does anyone have any ideas for me? I really can't afford to lose this scholarship, as we're pinching pennies as it is for me to attend this school. Thanks for any help- I really appreciate any input.</p>
<p>A one time windfall shouldn't change your overall financial situation significantly, but cash on hand from any source is expected to be used at least partially to fund your college costs. All you can do is explain the situation and hope they work with you. Make sure they have all of the information about siblings and any excess expenses like medical.</p>
<p>I agree...the best you can hope for is to explain the discrepency and cross your fingers. Colleges expect you and your family to go all out to pay for your education. If they readjust your package, then you're going to have to work with it.
This same situation happened to a friend of mine a few years back. She ended up getting less money and had to change her admissions acceptance. Then she called one of the other schools she was accepted to (and had already declined) and renegotiated with them. They were more than happy to take her for the fall.</p>
<p>Actually an inheritance can heavily impact your EFC. If it was received in the year covered by FAFSA, it is income and would be assessed as such. The marginal rate can be as high as 40% or so. And if it is sitting in an account, it can be hit again at a marginal rate of 5.6%. So you can really get reamed that way. This happened to a friend of ours, sort of happened to us--though we knew the ramifications and did not apply for financial aid because of the inheritance. But, yes, it is income and it is expected to go towards payment of college.</p>
<p>All of that said, college administrators do have (although some don't often use) professional judgement with which they can make adjustments to reflect these kinds of situations. </p>
<p>As an example, we would be likely to take this "one-time" source of income (if it is truly one-time) out of the AGI and move it to assets. We would also consider (although we may not reduce) what the asset had been spent on (to see if we were double counting or not).</p>
<p>Again, this is up to each college adminstrator, so even at the same school you could have two reasonable people disagreeing reasonable about this.</p>
<p>The best advice is to call the college, explain your situation, ask for a professional judgement reconsideration, and explain why this money is simply not money that should be considered income.</p>