what are allowable college costs that 401k/IRA monies can pay; details re this?

[gbesq]

<p>roderick,</p>

<p>Even if unemployed, I think that you may still be eligible for PLUS loans with deferred repayment under these circumstances. You really need to speak with the financial aid officer about this before you begin withdrawing funds from retirement accounts.</p>

[swimcatsmom]

<p>There is no ‘slot’ on the FAFSA for automatic 0 EFC. You enter income/asset information as usual. If your income for the year (which would be 2009 for the 2010-2011 school year) is below $30k and you meet other eligibility requirements then the EFC formula (which calculates the EFC after you submit the FAFSA) spits out an EFC of 0. I am talking of the FAFSA for the next school year (2010-2011) now, not the current school year. (if I am understanding correctly the severance package was 2008? otherwise the above is all not relevant).</p>

<p>

Doesnt FAFSA always look back on the previous tax yr and last yr was our best yr since we had a lump sum 1 yr severance on top of the quarter yr that I had worked. To FAFSA, we were richer than we really were. THus special circumstances forms are made AT THE COLLEGE (not FAFSA).

Yes the FAFSA is based on previous tax year. But when there are special circumstances the college is allowed to into your FAFSA and adjust the input figures reflecting the adjustment and this produces a new FAFSA EFC. This is done by the college not by FAFSA, but nevertheless adjusts your FAFSA and the FAFSA EFC and thus eligibility for aid. If you go to the FAFSA web site you should find a 2nd SAR reflecting the adjustments they made to your FAFSA (your child should have received an email informing him/her that the FAFSA was changed at the time). It would be a good idea to see what the EFC ended up being after the adjustments to. </p>

<p>Is this a school that meets full need? Hopefully if you have a 0 EFC the aid will be better for 2010-2011.</p>

<p>As you have already had an adjustment for this school year then it may be worth looking into the the PLUS loans. I believe the credit check is not that stringent.</p>

<p>edit: I typed all this before seeing the post about the income being @ $40k so some (re auto 0) is not relevant</p>

[swimcatsmom]

<p>

quote–
If you apply and are denied then the student is eligible for an additional $4000 in Stafford loans.</p>

<p>wd that be stafford unsub or subsidized loans?

Unsub</p>

<p>

on the 30k threshold, is that 30k AGI or taxable income? I think we migth be in the 40k ish AGI area at the end of 09, depending on whether I get the fry cook job or the systems analyst job.

AGI - so you probably won’t be eligible for that.</p>

<p>

very interesting stuff on the timing. Two things are prompting the ira w/drawal and the questions on same: 1) the ira cd maturity dt is now (last day is today) ; 2) first term college is due on 8-15 of $3,620.

</p>

<p>Timing may be a moot point as far as the automatic 0 EFC if your income will be over the $30k threshhold. For some reason I was thinking the withdrawal was all to pay for the spring term. Don’t know where I got that (probably mixing you with another thread). However still something to consider if you must make an additional withdrawal for the Spring term. Any withdrawal this year will increase your 2009 AGI and therefore the EFC and reduce next years aid. Timing can make a big difference.</p>

[swimcatsmom]

<p>if your daughter received Pell money then her FAFSA was definitely adjusted by the school. Pell is a federal grant and is completely dependent on the FAFSA EFC.</p>