<p>How does the timing for retirement affect need based aids? FAFSA
Student will be junior in the fall and plan to go to college in Fall 2016. Father's job will be outsourced in early 2015, and given the job market, father is not optimistic in getting a job, hence may be forced into retirement
Question
I assume the student will apply for aid in the Fall of 2015 or early 2016, how does the parent's retirement affects her need based aids? as I assume the calculation will be based on the parent's income for 2014 at the time when the father still has a job..if true, it will be difficult for the family to pay for the tuition.</p>
<p>Will the family have retirement income? SS, a pension, IRA or TSA payments? A severance or retirement package? If so, these are considered income.</p>
<p>Yes, the year for that student’s financial aid applications will be 2015. If the parent is a displaced worker AND their income is below $30,000 a year, they could find some relief in the FAFSA formula.</p>
<p>Aid for fall 2016 entry will be based on 2015 income.</p>
<p>And the student will apply for financial aid either fall of her senior year (if applying early, some schools have a fall priority deadline), or in January of her senior year. The FAFSA becomes available January 1 of her senior year in high school.</p>
<p>If finances are a significant consideration, I would boldly suggest that the student NOT apply binding early decision. She will want to compare multiple net costs when choosing a college…not just one ED award.</p>
<p>As others have said, the income used for financial aid consideration is based on the calender year before the student’s fall entry date. So if your student expects to start college in fall of 2016, it’s the income on the 2015 tax returns that will be used as a primary basis for financial aid. </p>
<p>In the event that retirement has occurred and the anticipated 2016 calendar year income is drastically reduced, as evidenced by current monthly income, a parent can request a professional judgement. This also happens when a parent loses a job, any change in financial situation. However, most fin aid offices will not make such judgements on things that MAY happen, or are scheduled to happen, only after they have happened and are happening. So if the 2015 income is inflated by the months the father was still working and maybe by a one time payout, that can be brought up and that PJ requested on it, when it is clear that the monthly retirement intake is going to be far less.</p>
<p>It will depend upon the school, as to what the outcome will be. My friends, some years ago, had a one time early retirement payment that inflated the critical year (for fin aid ) numbers and two schools for two kids refused to budge and give any special consideration, and both schools were ones that guaranteed to meet full need. by taking a gap year and letting the financial chips fall where they were going to more correctly reflect the family situation, they were able to save a significant amount of money. </p>
<p><<<
How does the timing for retirement affect need based aids? FAFSA
<<<</p>
<p>FAFSA is for fed aid, which isnt much…and the 'free money" is for low income folks. How low will your family income be once your H retires (including retirement income, severance, etc…and including your income)? </p>
<p>what state do you live in?</p>
<p>You may want your child to apply to schools that would give him/her large merit for stats, then the income fluctuation wont matter.</p>