Our child will be a junior at a liberal arts college in 2019 and did not receive financial aid the first two years. I retired from the federal government at the end of September 2018 and now receives a pension. My spouse does not have an income. The EFC calculator on the school’s website, which said we were not eligible for financial aid when I was working, now says that we should be. So we filed for financial aid in March 2019. We received a letter today stating that on the basis of our 2017 income we were not eligible for financial aid. I understand that the 2017 tax return is what would typically be used to determine 2019-2020 aid but that is only if that income reflects current income, which it does not. The school says we can ask for a review in January 2020 at which time they would ask for documentation of 2019 income but we can document that now. It appears as if no attention was paid to the letter we sent which said I have retired. Has anyone else encountered such a situation? Should we appeal?
Some colleges will do a special circumstances consideration when a parent income is reduced. But some just won’t. It sounds like this college won’t consider this based on the information you provided.
I would suggest you contact the financial aid office and find out how to apply for a special circumstances consideration.
Does this college guarantee to meet full need for all students? If not, you might not get any additional aid anyway.
Also, your pension income will be considered as income.
ETA…was this a forced retirement or an elective one? That might make a difference in how the school considers your special circumstances request.
And one more thing…you also had income in 2018 which will be used for the 2020-2021 FAFSA form…so just be prepared that you might not get aid that year either.
Yes, the school meets full need.
If you just submitted the FAFSA/CSS forms and the letter separately, it may not have been considered. There should be a way to ask for reconsideration.
The NPCs are not always accurate for upperclassmen. In 2018, your retirement year, you should have received 3/4 of your old salary, plus your pension for 3 months. That’s probably the income they will use for 2019-20.
Yes, that is my concern - that although we had income through two years of college and pension through two years of college, by relying on past income tax returns, the assessment may well be that we can pay from non-existent income for the junior and senior years.
After the usual text in the saying that 2017 income was considered in the aid determination, the college added the following:
“Although you have indicated that your family’s income for 2019 will be less than it was in 2017 or 2018, your award is based on family income for 2017. Your family may request a review in January 2020, at which time they will be asked to provide documentation of their 2019 income. If it is determined that a revision is warranted, an adjustment will be made at that time.
Please be assured that, if it is determined that there has been a year-long sustained decrease in income, the grant aid adjustment will include a full year of eligibility.”
The spring semester tuition is due by the first week in January, so this reconsideration will occur after the 2019-2020 fees have been paid in full.
My thinking is to ask the school now what information they would want me to provide in January 2020, because I can provide that same information now. The 2018 W2 form shows a reduced income and there is an entire booklet provided by the feds in my name outlining benefits. The only doubt the school could have is whether I have obtained a different job that I am not disclosing to them. That, of course, would be actionable under the declarations we have provided and would be foolish on my part. I can also provide them the quarterly tax filings we are doing now.
If you have any thoughts on how I should approach my conversation with them, that would be useful.
Thanks for your help.
Yes, this would be actionable on the part of the school. I surely hope you don’t intend to game the system this way.
This is precisely why some schools don’t consider these special circumstances considerations for a period of time. There is an expectation that the parent will seek other work. Is that an option for you…or your wife?
And again I ask…was this a voluntary retirement or a forced one. If you chose to retire, and could have continued work, it’s possible this won’t be viewed as favorably as you hope.
The school is saying they can’t consider 2019 income until 2019 is over, but if they do find there is a significant reduction in income, they will award FA for the entire 2019-20 school year. Yes, it will be as a refund to amounts you have already had to pay. You have to guess what the school will award, maybe have to take out loans that you can repay IF you get a reconsideration and more FA awarded.
You can ask the school what type of documentation they will want to see in Jan, but I can guess it will be a W2 or other proof of income in 2019, maybe even your taxes if you file early enough. In the ‘olden days’ (2014-15), we all used to file FAFSA in Jan-Feb and the schools would base FA decisions off those estimates of prior year income, so it can be done.
I don’t know what your numbers say you should get. It is not as if you have no income (job loss), you have a pension and maybe quite a good one? FA isn’t based only on income, so the school will want a lot of info about your assets too.
You can’t document 2019 income now- it’s only June. There are 6+ more months in the year, during which time you could start freelancing or consulting, your spouse could get a job or open a business, your assets could ratchet upwards due to the stock market climb, you could win big on a TV game show (they hand you a tax form as you exit the stage, from what I gather), or win Powerball. YOU think you know what’s going to happen to you financially in 2019 because you’re drawing a pension, but the college has no way of knowing what the next 6 months will bring. Hence, their position that they’ll review your finances in January 2020.
Right?
You have a reduction on your W2, but wages are no longer your only source of income. The 2018 W2 does show reduced wages - not reduced income, since that’s not the only income. You should also have a 1099-R for your pension. When you include the pension, did your income actually drop significantly?
And on a other thread, you say that a good chunk of your “retirement” savings is in NOT protected retirement accounts because you didn’t have access to those early on. Is that still true?
If you were forced to retire, you qualify in the “displaced worker” category which does trigger a review. The same if you are fired, RIFed, disabled, died, etc. Those are reportable events. Otherwise, it’s entirely up to the financial aid office
It happens all of the time that people get a reduction in pay or move to a lower paying job. Because FAFSA and PROFILE lag behind , it’s not unusual that income does not reflect current situation. Happens all of the time. Many financial aid offices will not review such cases.
It’s not just college financial aid that works that way. My friend’s SIL was assessed child support on a given year’s income. Too bad for him if thatcwas an unusually high income year. Too bad for the recipient if he was unemployed most of that year. Thrm’s the rules.
Another friend got exceptional payouts the year husband retired. They basically amounted to his pension so to take those lump sums as income was crazy — they have to make that last fit the rest of their lives. Once deposited, they became assets, some protected even, but they were income the year they were dispensed. They took their DD out of school that year for a leave because they got nowhere with the college financial aid office. A $20k Merit/need grant was what was in balance. The next year they qualified easily for it as they had another child in college too. He took a gap year. That planning saved them over $30k a year for the next 3 years.
The rules for financial aid do not deal with what you earn the year you are applying, it’s for the tax year two years back. That’s the very definition. You could be a millionaire and get financial aid if you had low income and assets two year back.
^^But the schools do consider requests for a change in circumstances, and that’s what he’s asking for here. This school appears to only consider the entire tax year, so in this case the 2018 earnings aren’t low (or lower) enought to trigger a reconsideration. OP wants 2019 income considered, and the school will do that but only after the tax year ends.
They do, if they want to do so. And they are doing so here. Not sure how they will do it, though because the rules don’t cover this. If OP were forced to retire, it would fall into a covered exception. Everything here is totally up to the school and FA Officer.
I think we’re talking past each other.
If a family experiences a catastrophic loss- hurricane blows their house away, breadwinner dies in the middle of the academic year, in my observation, colleges will do a review as soon as the family alerts them to change in circumstance.
That is NOT the case here- at least based on what the OP has posted. What impetus is there for conducting a review of 2019 finances when the year isn’t even half over? OP could get a full or part-time job with 6 months salary. Or the spouse can, etc. as I previously posted.
I agree with, “They do, if they want to do so,” re: a current professional judgment. But the rule is, they have to treat all in a category (here, recently retired and on pension, ) per the same process. So what might help may also not be functionally or practically available.
And OP isn’t necessarily a displaced worker. That’s when the chance of finding similar work is nil. And it’s not a hard factor in the aid formula, aiui. It’s soft, something they can read and take into consideration. Or not.
Did you actually apply for FA for year 1 and/or 2 and get turned down?
If you had a high enough income previously that you didn’t qualify for FA, presumably you also have high-ish assets? How much did the income reduce when you retired?
They can consider that, having retired 9 months ago, you are not at poverty’s door. Sorry. We know it’s tough.
This wouldn’t have been any surprise, right? Your retirement was imminent when your kid started school, so you would have calculated the cost over the 4 years? Were you forced out of your job? Was retirement planned for this date? Is your income actually really changed? You have health cover, a pension, a 401K and assets? Have you run the NPC to see what that even looks like?
So if your income goes down in 2019, as can happen to any of us, and our kids’ financial aid for the 2019-20 year has been awarded based on 2017 income and returns, you get to get a recalculation and money back? And the following year , again rather than using 2018 return info?
Unless a crisis occurs, I don’t think colleges, in general, do that. I think this school is being generous.
It can happen. D#2 school did it because my job ended and I filed for a reconsideration in the second semester. D#1’s school only gave additional money for the second semester, but not the first.
I think there might be a difference between how a school views a lay off, a job ending, or a pink slip or something like that.
This sounds like an elective time to retire.
The OP has stated that the have a lot of funds in not retirement accounts. Those will still count regardless of the income. The OP presumably has a government pension…so that will count.
And, of course, the OP and/or wife could get jobs.
Will the college reconsider this financial aid package because a family elected to stop working? Maybe? Find out the process and complete it, and see.
Remember, these special circumstances considerations are done on a case by case basis. You might get a reconsideration and you might not.
I hate to ask this…but when you elected to retire in fall 2018, how did you think your kid’s college education was going to be paid for?