Unemployed and Financial Aid problems

Paying for College
1

<p>I'm hoping someone here might have some idea of how to help me.</p>

<p>Please note: I have already contacted my FA office 3 times by phone, and twice by email. I am not able to speak to my FA Administrator, only a student aid that is unable to assist me.</p>

<p>My problem is that I filled out my FASFA months ago. Last month I was asked to supply a verification form. 3 weeks later (yesterday- Sunday, I know) a new documentation requirement appears online- a 'corrected ISIR'.</p>

<p>Well, I first called the school asking what they were correcting. The student aid told me that they were adding in $2,400 of untaxed unemployment income from 2009. She was unable to help me further, suggesting I contact my administrator (and as above noting I was unable to).</p>

<p>My concern is (other than not being able to contact <em>any</em> person who can help me at my FA office) that while I know it is <em>suggested</em>, strongly, that FA administrators can consider unemployment income as 'zero', why would my FA administrator deliberately <em>add</em> income which removes me from any/all eligibility for a Pell grant? </p>

<p>Edit note: when I filled out my FASFA I was told by the folks on the phone <em>not</em> to list the $2,400 under Student's Untaxed Income. This was reiterated again today by the folks at FASFA/Studentaid.ed.gov.</p>

<p>Note: I made $4,000 in 2009, with the rest being UI benefits. I was unemployed in May 2009, and should have applied right then for the Fall 2009 semester, but did not, thinking I could easily garner employment. I was wrong.</p>

<p>All total my AGI is $18,707, which left me with an EFC of 4721, and a possible Pell of $800. </p>

<p>Now I'm concerned that my school will not exercise professional judgment, and leave me out in the wind. Further, that the school only now is submitting a corrected ISIR leaves me to believe that my ability to garner any Federal Grants will be greatly diminished.</p>

<p>If my UI was zero I qualify for $5,350 in Pell grants, and looking at the school's online benefit calculator would also qualify me for additional grants and loans covering aprox $18,500- ~$1,500 shy of full-need met.</p>

<p>Any ideas or thoughts on this? I'm just trying to see how other schools would handle this situation. I think my worry is compounded by the inaccessibility of the FA office, and the great length of time they have taken thus far (understandable though being it's prime student aid time so I'm told).</p>

<p>It's been 3 weeks since they've processed my final bit of verification. Still no word on an aid package.</p>

<p>Thoughts?</p>

2

<p>My thoughts? You are required to list the $2400 of unemployment income in the Other Untaxed Income section. Why? Because it IS untaxed income. You had to list the amount in excess of $2400 on your tax form, correct? Why? Because it is taxable income. So why would it not make sense to expect you to list the $2400 that was untaxed AS untaxed income?</p>

<p>Also, the guidance from the Department of Education is that the $2400 is to be listed in untaxed income. During verification, the aid administrator is expected to add it in if the student did not do so.</p>

<p>“My concern is (other than not being able to contact <em>any</em> person who can help me at my FA office) that while I know it is <em>suggested</em>, strongly, that FA administrators can consider unemployment income as ‘zero’, why would my FA administrator deliberately <em>add</em> income which removes me from any/all eligibility for a Pell grant.”</p>

<p>I am not aware that it has been <em>suggested</em>, strongly that FA administrators can consider unemployment income as ‘zero.’ I know that an aid administrator CAN consider it zero, but this is not required. If a student feels he/she has extenuating circumstances that should be considered, that student can request a special circumstances review (which is where professional judgment may or may not be exercised). To simply adjust unemployment income to 0 is a slap in the face to the hard-working families who have jobs that pay wages low enough to keep them from getting Pell grants. If you earn more than they do with your unemployment wages, why should you get an automatic free pass?</p>

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<p>Yes, the $2,400 is untaxed income, but it’s no different than the myriad of other untaxed incomes which do not need to be listed. Further, as mentioned, I was told <em>not</em> to list it by the people operating the help line at studenaid.ed.gov. </p>

<p>Regardless. [IFAP</a> - Electronic Announcements](<a href=“http://ifap.ed.gov/eannouncements/052110UpdateProfessionalJudgmentFAA.html]IFAP”>http://ifap.ed.gov/eannouncements/052110UpdateProfessionalJudgmentFAA.html)</p>

<p><a href=“http://www.nasfaa.org/publications/2007/G2669Summary091007.html#analysis[/url]”>http://www.nasfaa.org/publications/2007/G2669Summary091007.html#analysis&lt;/a&gt;&lt;/p&gt;

<p>And since have found another, older, thread with my exact problem in which this was discussed.</p>

<p>Why should it be zeroed? Well, read the above, the Department of Education says why, but I’ll copy/paste it for you here:</p>

<p>“During this period of economic hardship, you may use the letter from the state unemployment agency, or other evidence that a student is receiving unemployment benefits, to document that the income earned from work of that student is zero for the purposes of adjusting data items for the student on the student’s federal financial aid application. For purposes of implementing this letter only, unemployment benefits can also be considered zero as the Department of Education, in consultation with the Department of Labor and the Office of Management and Budget, has determined that the maximum unemployment benefits available would not have a material impact on the Expected Family Contribution of an independent student.”</p>

<p>What’s a slap in the face? That I don’t belong to a special-need group so I don’t earn a company tax credits as I’ve never received welfare, tanf, social security. Nor have I been convicted of a crime. Funny how that’s not a slap in the face, yet even a criminal is more desirable to hire as they provide an employer with a tax credit, and I do not.</p>

<p>Do you live in a city with 241,000 unemployed just this month? I do. Our entire state had 55,000 jobs available last month. Yes. The unemployed are scum.</p>

<p>You don’t think I haven’t worked hard? You suggest as much. You think being unemployed is easy, or that I’m on extended vacation? You don’t think getting up at 5am for another round of job hunt and filing out applications, before going, literally, door-to-door/shop-to-shop in a city of 4.5 million people looking for even min. wage positions isn’t work? You don’t think making ends meet on benefits equal to less than min. wage, needing to see a doctor but not being able to…that isn’t work? </p>

<p>I’ve worked hard, and I don’t need your insinuations suggesting otherwise. I’m asking the opinion of folks in regards to if they think a financial aid office may/not exercise professional judgment on my case. </p>

<p>I sincerely hope they’re not as bigoted as you- you who live in this magical black and white world wherein if you want something, take it. All things are accessible.</p>

<p>Further, I did not say that a financial aid administrator was required to do anything, only that the current administration strongly recommends it. Would you also like to see the email I received today from the Department of Education? I’d be happy to share it with you in private, but something tells me you have blinders on: You loath the unemployed, and you’re prejudiced against us. We’re all hobos and drug addicts to you.</p>

<p>Hard-working indeed.</p>

<p>What makes my need as an independent student any less than any other student? They have families? Good for them- I have no safety net. I’m always 1 check away from homelessness. They have families working for their education? It must be nice. It’s also nice to have a place to lay your head at night that you don’t have to pay for. Nice not to have responsibilities. </p>

<p>I’m sorry, but your response to me is seriously…tainted by your distaste for my situation. Of note is how you injected words which I never used, then implied I wasn’t hard working, and using the rather bold phrase “slap in the face” when you yourself don’t even know my situation. In your mind the unemployed are garbage, and children with no responsibility are worth more, not less, not equal to, but more, than older students.</p>

<p>So no, I don’t think adjusting unemployment income to zero is a slap in the face- the reason is explained by the Department of Education and the Department of Labor. The purpose is to provide people without family support- those of us who would fall through the cracks, a chance at going to school and getting an education. Why should we who have worked for 20+ years, paid our taxes, paid our debts be any less important?</p>

<p>Slap in the face…</p>

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<p>It says MAY, not MUST. You made more than $18,000 last year. That’s a lot more than MANY families in my area earn in a year (families, not single people). And I happen to live in an area with the highest unemployment in the nation, so I do understand. But you make more money than folks who work 40 hours a week at minimum wage jobs with no hope of earning more. It sucks to be unemployed, and it sucks to be UNDERemployed (believe me, I know this first-hand). However, the fact remains that money earned is money earned. It can be 0’d out, but it doesn’t have to be 0’d out. If your school chooses not to make unemployment 0, they are absolutely within the guidelines. If you disagree, make your case with a special circumstances appeal.</p>

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<p>I understand that you’re upset but I think your reaction was a bit over the top. I’m not seeing what was directed at you personally and I think what kelsmom (who is a FA officer at a large public uni in a state with insanely high unemployment, btw) was saying is that most schools won’t AUTOMATICALLY adjust unemployment income to zero…although they will consider making special circumstance adjustments. Think about it, if it was an automatic thing, that would mean that even people who had spouses and other means of support would be thrown into the pool for limited aid resources (Pell is not the only aid at stake here). By considering adjustments on a case by case basis, they can better determine what the actual circumstance/need is. I’m very sure that kelsmom does not harbor any ill will toward people with low income or the unemployed…she has helped and encouraged MANY such people here for a very long time and I’m sure the same is true in her professional life. It is difficult at times to convey information and feelings in an online forum without being misinterpreted but, if you hang around for more than a few posts, I think you’ll find that this is not a forum where people generally attack each other.</p>

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<p>And by the way, you read far more into my comments than I ever even considered. I provided a line of reasoning for why the $2400 would be included & questioned the idea that it isn’t supposed to be (and I included my very firm belief that those who earn less are no less important than those who are unemployed and earning less-than-they-used to earn). The editorializing is all yours. I am the one who should be up in arms over your belief that you know so much about how I feel from a few comments. However, I provided my thoughts, which you asked for … the rest is your interpretation and does not represent my beliefs.</p>

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<p>Golly, I know it’s not exactly the same thing since we’re parents of college students (not students ourselves), but when we file taxes (and the FAFSA and the CSS Profile) my husband’s unemployment is included in our AGI. How could it not be reported on the FAFSA? It’s taxable income.</p>

<p>Since it’s included in the AGI, I certainly wouldn’t <em>also</em> list it under “other untaxed income” – that would be effectlively listing it twice.</p>

<p>How was it, MeesterJojo, that it wasn’t part of your AGI?</p>

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<p>Yes, I know what it says, I, unlike someone, can read. I never stated anyone “must” do anything.</p>

<p>Still, it begs the question: why make an entire law aimed at ensuring that the 3 billion dollars in Pell grant money gets to the students with the most need. And how does the College Cost Reduction and Access Act define this need in my case?</p>

<p>[Summary</a> Of The College Cost Reduction And Access Act (H.R. 2669)](<a href=“http://www.nasfaa.org/publications/2007/G2669Summary091007.html#analysis]Summary”>http://www.nasfaa.org/publications/2007/G2669Summary091007.html#analysis)</p>

<p>Sk8rmom- Over the top? She just insinuated I wasn’t hard working. She compared my situation to that of a hypothetical child who has parents to work for their benefit. Wow. She ignores the College Cost Reduction and Access Act- which has guidelines established to implicitly assist persons such as myself, then suggests that by following these guidelines it’s a slap in the face for those hardworkers.</p>

<p>Over the top? Hardly.</p>

<p>I know what I’m saying/typing, and I know that I’m charged up at the moment. Knowing how one states something is important when dealing with the public. Kelsmom should realize this. The internet is not a new thing, nor is communication via the internet.</p>

<p>Kelsmom- read what you typed. What you feel is innocent/casual frequently may not come across that way. I am sorry if I took it out of context, but the implication (and now I’ve got my roommate and girlfriend reading this, and they agree) is fairly far out there. If you didn’t intend to imply such, then, well, think about it next time.</p>

<p>Let me ask you this then- knowing there is a law which went into effect in 2007 which even suggests how to determine Auto-Zero EFC, and provides guidelines for them. And knowing there is 3,000,000,000 in Federal Pell grant money to disburse this year, and that all of it won’t be claimed. What benefit does it serve to keep someone who is in obvious need away from the funds they need to go to school? That’s what I would like to know.</p>

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<p>Rentof2- My Unemployment IS included in my AGI- as stated in the first post. What is NOT included is the $2,400 unemployed tax credit. If you filed a 1040 (or whatever you filed this year), you’ll notice on line 3 (or around there), to put only unemployment income in excess of $2,400.</p>

<p>Edit- I’m presuming you are aware of the tax credit for 2009- $2,400 of unemployment income does not need to be reported. As such the FASFA people say it shouldn’t be reported on the FASFA as untaxed income, as they feel it’s like welfare payments, or untaxed Social Security benefits. However, the NASFAA claims they have it on advisement from the Department of Education that we are supposed to list it as untaxed income, but in the same article, NASFAA urges FA administrators to use professional judgment.</p>

<p>Meanwhile, back at the Department of Education- they’ve never heard of this, and have no law or requirement to do such, nor do they have any record of informing NASFAA of this. Sooooooo this lead me to dig deeper at the Dept. of Ed. They’ve been extremely helpful- emailing back and forth most of the day with various folks there. Should be interesting when they finish. Either way, they pointed out all of the things I’ve linked to in this thread thus far.</p>

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<p>It’s not a tax credit - it’s a reduction for 2009 in the reportable (i.e. taxable) amount:</p>

<p>[Tax</a> Topics - Topic 418 Unemployment Compensation](<a href=“http://www.irs.gov/taxtopics/tc418.html]Tax”>Topic No. 418 Unemployment Compensation | Internal Revenue Service)</p>

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<p>Okay, thanks Meester, I see that now. To be honest I never even thought of the first $2400 dollars of unemployment when I was filling out the FAFSA. I mean, technically, in our case it was not “untaxed” since taxes were withheld from each UI check my husband received. Maybe that’s not what they meant by “untaxed”, but I guess that’s why it didn’t occur to me that it should show up somewhere else.</p>

<p>We were verified by both kids’ colleges, sent in tax forms and all W-2s, 1099s and 1098s (including from the state for the UI payments), and it didn’t seem to cause any issues.</p>

<p>How confusing can this get? Sorry this is happening for you.</p>

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<p>Madison- However you want to list it, the end result is the same- I don’t get taxed on $2,400 of my UI, however, it begs the question why isn’t this small amount in the same lump of things such as welfare payments, untaxed SS benefits, etc?</p>

<p>Also- there seems to be general disagreement in the DoEd over it all, and someone should actually put “untaxed unemployment benefits” on the FASFA help section for the topic “Student’s Untaxed Income”.</p>

<p>On one hand I have the DoEd telling me, directly “no no no”, on the other I have an “association” saying “The DoEd said yes yes yes”. </p>

<p>One is a government source, the other seems to be a support organization for persons involved in financial aid.</p>

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<p>The Automatic 0 EFC, like Simplified Needs, is not a suggestion. The qualifiers are built into the FAFSA and it IS automatic, just as the name implies. People can qualify for these special formulas by meeting the established criteria, one of which can be that you’re identified as a dislocated worker. </p>

<p>The professional judgement adjustment to unemployment income, for those who did not meet the specific criteria for Auto 0/SNT, is clearly meant to be handled by appeal…otherwise the FAFSA instructions would specifically exclude unemployement compensation for untaxed income. Although it seems a long list, there is actually very little in the way of untaxed income that is not reportable for FAFSA and that’s by design. Student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Investment Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements (for example, cafeteria plans), foreign income exclusion or credit for federal tax on special fuels - you’ll notice that worker’s comp, disability, unemployment and other programs are NOT included in this list. These and other items are only adjusted by the school. You would be best served to take your complaints on this to your elected officials and try to rein in your personal feelings when dealing with your FA office…they don’t make the rules! Good luck…</p>

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<p>So I am a dislocated worker, and this has been verified via a verification form I had to submit last month. </p>

<p>Why then doesn’t the FASFA zero my EFC online? I’m looking at my FASFA now and it says “YES” to “Is Student or Spouse a Dislocated Worker?”</p>

<p>And why would the FA counselor resubmit for a corrected ISIR to add in $2,400 of income if I’m supposed to be auto-zero?</p>

<p>I haven’t dealt with my FA office yet, sadly. They don’t return phone calls, or emails, so I’m going to visit them tomorrow afternoon with my concerns. Thus my thread on here. I’m trying to feel out problems with getting a 0 EFC, but you say it’s automatic, and since I know, and can prove, I’m dislocated, then hmmm should be no problem.</p>

<p>When you say automatic zero, and I know I meet the criteria, is it automatic via the FA office, or should it have been with the FASFA/SARS report?</p>

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<p>If you qualify for Auto 0/SNT it is automatically applied when you file FAFSA and reflected in the EFC on your SAR. There’s more to it than just being a disloacted worker though:</p>

<p>

</p>

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</p>

<p>The qualifications are in this publication:
<a href=“http://ifap.ed.gov/efcformulaguide/attachments/111609EFCFormulaGuide20102011.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/111609EFCFormulaGuide20102011.pdf&lt;/a&gt;&lt;/p&gt;

<p>My guess is that, if you answered the qualifier questions correctly, you did not have to provide asset info (simplified needs). If you don’t have a dependent (other than a spouse), you won’t be able to qualify for Auto 0.</p>

16

<p>“Note: An independent student without dependents other than a spouse is not eligible for an automatic zero EFC.”</p>

<p>Yeah, I just read that. Still, it seems I qualify for the SNT. Why the government doesn’t offer the same opportunity just because some of us don’t have children is beyond me. If I had a child I could get healthcare and food assistance. Sigh.</p>

<p>I filed a 1040EZ, and I made 21,107 in 2009.</p>

<p>How does SNT compare to auto-zero EFC? Can SNT still result in an Zero (if not auto) EFC?</p>

<p>So while it seems I qualify for the SNT, would it be out of the question, or egregious, to ask about a special needs review given the urgings of the DoEd to FA offices to reduce UI earnings to zero?</p>

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<p>Yes, it’s completely possible to qualify for SNT and have FAFSA calculate a 0 EFC. But that’s because assets aren’t considered/assessed and income, which is adjusted for various allowances for family size, employment taxes, income protection, etc. falls into the range of 0 EFC. That’s all calculated by the FAFSA and there’s no shortcuts there.</p>

<p>As kelsmom said, you HAVE to request a special circumstances adjustment to have your UI benefits reduced for FAFSA. It’s completely up to the school and their policies whether they grant this or not and the decision cannot be appealed to the DoE. But, if you don’t apply for it, your chances of reducing your EFC are zero. This is outlined in the FAFSA instructions as follows:</p>

<p>

</p>

<p><a href=“http://studentaid.ed.gov/students/attachments/siteresources/CompletingtheFAFSA10-11.pdf[/url]”>http://studentaid.ed.gov/students/attachments/siteresources/CompletingtheFAFSA10-11.pdf&lt;/a&gt;&lt;/p&gt;

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<p>Which is what I’m doing tomorrow- I’m going in advance of my financial aid determination to meet with my FA counselor. </p>

<p>So I’m dislocated, made $21K in 2009, Single, no children, and as-is with no adjustment I don’t qualify for even a Pell grant.</p>

<p>Looking at my FAFSA I see one problem already- It says I filled out a 1040 and not a 1040EZ, and underneath the “1040EZ eligible” is blank. Hmmmm that’s no good.</p>

<p>It’s beyond silly- the very reason Obama lifted the age cap on the Pell was for the unemployed seeking federal aid for education, or at least Opportunity.gov would have one believe. </p>

<p>Any tips on how to approach the subject with my FAA tomorrow? I’m bringing a copy of my tax returns, my Texas Workforce Commission letter stating I’m unemployed, and possibly eligible for a Pell grant. </p>

<p>I just corrected my FAFSA to reflect that I did, in fact, file a 1040EZ, and was eligible to use the 1040EZ. Haven’t made any other changes. I suspect the corrected ISIR will alter it in a few days from my FAA.</p>

<p>Interesting enough: the information did not affect the SAR. So I’m guessing the SNT is not calculated automatically as part of the FAFSA, but outside of it? Sorry, it is all a bit confusing/nebulous to me at this point.</p>

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<p>I still find it hard to believe that you read so much into my statements, but whatever … I just see far too many families struggling to make ends meet on far less than $20,000 … every single year of their lives. I see many working poor missing the cut for Pell. Money is money, whether it is from work or from unemployment (or from an untaxed pension distribution, or a gambling win, or a buyout, or any of the many other ways money is earned that still counts as income for financial aid purposes). Yes, the unemployed who apply for a special circumstances adjustment will often get the income reduced to 0 … but that is based on a detailed review of the situation because that unemployed person may already have made $100,000 during the year he became unemployed (and he may get a job after only a month or two of unemployment) … so your situation may differ from the situation of the next guy.</p>

<p>The formula does not allow independent students without dependents other than a spouse to qualify for auto 0 EFC because it doesn’t. And that is about the best answer you will get for anything related to why things are or are not when it comes to financial aid. Congress mandates the rules.</p>

<p>Professional judgment rules specifically state that rule-bending cannot be applied across the board. To automatically reduce income to 0 across a class of students is not allowed. That is why it must be requested through special circumstances. In other words, while a school could automatically adjust income to 0 for the unemployed, they can’t have that policy … so they have to do it one case at a time. Again, we don’t make the rules.</p>

<p>As far as the tax return is concerned, it is actually irrelevant in your case. The type of return plays a part in determining whether or not you qualify for Simple Needs Formula (assets not counted) - but you are a dislocated worker, which also qualifies you. So whether or not you are eligible to file the 1040A/EZ isn’t an issue for your bottom line.</p>

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<p>Also, just so you know: the Department of Ed audits schools for program compliance and issues monetary fines for noncompliance. When it comes to a difference between what DofE says & what the folks at FAFSA say, your school is going to go with DoE’s instructions every time.</p>

<p>Not sure what SNT is, so can’t answer that one. But EFC is always computed within the formula. The aid administrator can adjust elements within the EFC formula but is not allowed to adjust the EFC itself.</p>