<p>These two paragraphs are a little long but explain the backstory as to where I currently stand. Id be very appreciative of anybody knowledgeable in this matter that could read this and then answer my questions to as to how my financial aid will be affected. </p>
<p>Im currently a Junior at a state university. Im completing a program in engineering and due to the nature of requirements I am going to need to spend an extra semester or two. Obviously, my financial aid offering for these one or two semesters will depend on my familys income for 2013. For my first 3 years of college my parents combined gross income has been approximately 34,000 with no income of my own. Based off this we have received the full Stafford Subsidized and Unsubsidized loan offerings (which Ive taken every semester) and a partial amount of Pell Grant money which amounted to 4300 this year. This past year my dad was forced to leave work. He had to withdraw 18,000 dollars from his retirement TDA. Im assuming that this money shows up 100% as income? If such is true our income for 2012 will likely show up as approximately 40,000 dollars. I also started working a part time job this year but I only earned 3,000 from it thus well under the 6,000 dollar protected income limit. </p>
<p>In 2013 my dad will still be in the process of getting SSI. He is not in good health and will need to pay into a very expensive COBRA plan until he can acquire Medicare. My dad should start drawing disability this month. If he draws it for the entire year of 2013 his income would show as approximately 20,000. Combined with my mothers SSI income my parents would likely have a combined gross income below 25,000 which I understand would qualify us for an automatic EFC of 0. Unfortunately, due to the high cost of my dads COBRA plan we will need to take out more money from his retirement TDA to cover taxes, mortgage, and certain insurance payments. My dad will need to take out 8,000 dollars this month to cover us through June. If he hasnt obtained his SSI by that point he will need to take out another 5,000 to cover through the end of the year. This summer I will be taking an internship where I will earn 8000 dollars. Combined with my earnings from my regular semester job my income could show up as high as 12000 dollars which would, as I understand it, be 6,000 beyond my income protection and would result in 6,000 added directly to my EFC. </p>
<p>Heres my questions.
1. How big of an impact will our 2012 income of 40,000 have on what Pell Grant I receive for the next school year, will I still get one? It would seem, regardless of what my parents do, my income alone will knock me out of one for the school year after, but thats probably only fair.
2. What Im most concerned about is my subsidized Stafford loan eligibility. Im fully prepared to lose all my other need based aid and fill in the gap with what I make from working, but this will only be possible if I continue to receive 3,500 from the subsidized Stafford until I graduate. </p>
<p>Sorry for the long post but I hope someone can provide insight.</p>
<p>It is very hard to know the answer for sure. Once you file your FAFSA, you will know your EFC - that, along with the Cost of Attendance for your school, will help you estimate what will happen. I would suspect you will still get the subsidized loan, but I can’t say that for sure.</p>
<p>I work in financial aid, and I suggest that you talk to your school about a special circumstances review if your EFC goes up — it sounds like your parents are in a really tough situation, and the school may be able to help you keep your Pell grant. No promises, but it is worth having them review your situation.</p>
<p>Thanks for your reply. Like I said before my biggest concern is losing my Subsidized stafford loan. I’m unfortunately in a department that receives very little support from outside scholarships. I pretty much understand the type of aid I’ve received since my freshmen year is the only type of aid I’m ever going to get. And I’ve tried for scholarships several times. I can deal with losing the 5 or 6 thousand dollars a year I receive that’s entirely need based provided my loans are not taken away from me and I have internships and part time employment to fill in the hole. Since you work in financial aid, is the decision of how many subsidized loans that will be offered to a student decided by you guys? If so, that makes me feel a little better. My financial aid office has been very competent in the past and I’m sure anyone that sees our financial situation would understand I need the money.</p>
<p>I will send my Financial Aid office an email explaining the situation. I think I may wait until we get the FAFSA for this year turned in. Unfortunately the disability income my dad is drawing for 2013 so far is through his employer and he does not have his SSI Disability yet (I’m not sure how all of this works). If all goes well we hope he can begin drawing SSI sometime this year.</p>
<p>Our financial woes are primarily medical related. In addition to my dads expensive COBRA plan my mother will be spending 225 a month on medicine. We are financially better off for getting the more expensive COBRA option due to the fact my dad will need two expensive operations in 2013. In total our medical expenses will run about 800-900 dollars a month and that is without having any insurance myself. Most of the money taken out of his retirement TDA is primarily going towards this, which sucks because it shows up as income.</p>
<p>Unfortunately, private disability income IS reported on the FAFSA. And medical expenses are only able to be counted as an offset to income in the amount that exceeds 7.5% income (AGI?) … and insurance costs are not counted in this, I don’t believe (haven’t had to do this recently, so can’t remember off the top of my head). You have to actually present the medical bills, so future bills won’t be counted.</p>
<p>Everyone is treated the same way for sub loan eligibility. The way it works is that each school has a Cost of Attendance for financial aid (COA); this is usually published on the school’s financial aid website. You get an Expected Family Contribution (EFC) when you file your FAFSA. COA-EFC-all grants and scholarships=eligibility for sub loans (up to the maximum for year in school, which is $3,500/$4,500/$5,500).</p>
<p>I logged into my financial aid for the 2012-2013 school year. Cost of Attendance is shown as 24,554. Our EFC from this year of 1254 has been deducted from this. There is an outside resource section that indicates 0 dollars. My final need is determined to be 23,300. However I receive 5500 scholarship from the state (only 1500 of which is need based, the rest if merit) and a Pell Grant of 4,300. If you deduct this I remain at an additional need of 13,500. I assume my access to 2,000 dollars worth of unsub isn’t included in this? Even though I don’t spend anywhere NEAR 24,000 a year on school I assume the way they look at it I have 13,500 of need left and thus will receive the full 5,500 subsidized loan I am eligible. </p>
<p>To give myself a rough estimate of what our EFC will be based off of what we plan on doing in 2013 (including my own personal income of potentially 12,000) I used this calculator: </p>
<p>I obtained an EFC of 6897 dollars. We’ll assume 2012-2013 COA at my school is the same (even though I know it will be higher). This means 24554 minus EFC of 6897 gives me a need of 17657. Now deduct 4000 from my state scholarship (assuming I’ve lost the 1500 need based portion based off an income exceeding 36,000) and deduct nothing from Pell Grant assuming I do not receive one and we end up 13657 which means my actual need will show up as being higher without these things and there’s really no way I will not receive the full 5,500 on subsidized stafford. Please let me know if I have done this correctly. One assumption I’ve made is that the withdraws from my dads TDA only show up as income and nothing else. Will these withdraws somehow make a larger contribution to the EFC than just regular income or will it be the same? I also included in the income a potential 6,000 dollar pension my mother MIGHT receive in 2013, I did not include this in my original post since it’s still up in the air, but I treated it as if it will show simply as income.</p>
<p>Even if you haven’t figured your EFC exactly right, it looks you will still have enough remaining need to get the full $5,500 in sub … and you will also be able to borrow $2,000 unsub.</p>