My hubby’s job just ended, which has cut our family-of-three annual income from $100K to $50K starting today. We’re in our base year for our FAFSA. And our D16 is heading to freshman year of college next fall.
Given that our base year income will be much higher than next year’s income, is there any way to get ahead of this to show colleges and the state/Federal financial aid systems that we’re no longer at $100K? Do we have to wait for FAFSA-based award letters in April before we alert the schools of our drastically changed circumstances? — While my hubby will get the next 6 months of unemoymemt income, I seriously doubt he will find paid work again as he is in his upper 50s (age) and is in a dying and demonitized professional field.
Any advice would be appreciated. D16 is now guaranteed to get free tuition at a few colleges including one where she could live at home. But, the others would require $15K room/board plus transportation. With lower income we might qualify for Pell (I don’t know yet) and an in-state school grant from the state.
What I had to do was fill out the fafsa with the correct information, including the income earned in the tax year, and then fill out the change of circumstances/financial aid appeal after. The schools then can adjust using professional judgmentioned and award pell, seog, state awards. For the appeal, you’ll have to submit information about his termination, unemployment, taxes, how you are paying bills, etc. Both schools were very nice and helpful.
On the fafsa itself, the only thing you can do is check ‘displaced worker’ but with income over $50k that alone won’t help qualify you for much. By filing the appeal you’ll probably qualify for a Pell grant.
Your husband may not find a job in his field, but will he be looking for just some sort of work to bring in some income? Many places, like Sams Club, Home Depot, Lowes, and Costco, like to hire mature employees. Costco pays particularly well.
Last time this happened he did a stint at a home improvement big box store, once the unemployment checks stopped. That might put us at $70K gross including unemployment benefit income in 2016.
My confusion about PJ surrounds the timing of when to alert the school of the job loss. Only after a financial aid award letter is sent to us, or as soon as we submit FAFSA on January 2016?
Our state gives out state grants on a first-come, first-served basis and runs out of funds before all eligible students submit. So, I’m concerned about timing for that too.
If your husband is a displaced worker and you checked that box, I believe that will put you on the simplified needs which excludes asset reporting and puts you at 0 EFC if you make 49,999. But doesn’t sound like you make that.
It is perfectly OK for you to speak with the financial aid offices of each place on your child’s list. Find out what paperwork you will need to have on hand so that you can file for PJ as soon as possible. For some places, you may be able to do that immediately after filing the original FAFSA next January.
I believe auto $0 requires a $24,000 a year income or less. The simplified needs test is the one where income less than $50,000 might be a possibility with a displaced worker parent.
Even so…this family income exceeds that amount, even with the reduction.
Here is the rub…those FAFSA only schools don’t meet need anyway…so your aid might not change at all based on this income reduction.
Run the net price calculator with the new income…including all unemployment amounts, and any severance your husband receives. See what the numbers look like.
I think you should talk to a school right after FAFSA is filed and the school has rec’d. It sounds like your DD will have an early acceptance at the local school, so go there with your paperwork, let them do the PJ, and likely the other schools will accept the change.
I would NOT wait till after regular awards are issued, because even if you get a big drop in EFC, if the drop happens that late, the school will no longer have any WS or SEOG funds to award (if possible to get).
You can file the change in circumstances immediately after you file the fafsa IF the form is on the website. Schools often don’t have the forms up for the next school year on January 1. For your state scholarships, you’ll have to check with the agency and see if the forms allow for an explanation. Just do it all as soon as possible.
Unfortunately, you have to file with every school separately. One of my kids got a lot more aid from her private school than her sister did from the public school, even on the pell grants. Same parent, same taxes and income, different professional judgment.
At $50k, or $70k, with one in college she won’t get much in pell grants. However, if she gets anything at all it helpsand she might then qualify for other programs like Gilman study abroad.
The dream would be a new professional job for him ASAP. But there’s a lot of age discrimination out there and I’m unsure how creative hubby is willing to get for his job search. But it sounds like discussing this new unemployment with each school as soon as FAFSA is processed (?) or submitted (?) is a good plan.
Yes, do have these discussions. Different schools will handle this in different ways.
My husband was laid off from his work in December of our first kid’s freshman year of college. We contacted the school to find out their procedures for a financial aid review. They were very clear that they did nothing for 90 days after a layoff, because the expectation was that the person would look for, and hopefully gain employment of some kind.
But they did give us their procedure so we would be ready. We had a form to complete, and we needed to provide documentation that DH had been laid off. We also had to show his severance package and timeline for its receipt. In addition, any unemployment eligibility had to be provided.
Luckily, DH found another job within a few weeks of the layoff. We never had to provide the information. But we had it all…just in case.
@Madison85 Is that required or just an option: using the 2015 tax year? It wasn’t clear to me when this FAFSA base-year change of policy was announced. Can you choose to use 2015 as base year for FAFSA SY 17/18, or MUST you use it?
Agree you can contact the schools now for a quick conversation. There may be a way some schools prefer you flag this to them now, some procedure. Otherwise, you’ll wait for the initial offer, then the PJ process.
We asked for PJ and got our response 2 months later. Long time to wait when you hope for a significant adjustment (we asked for a small consideration.) Also, I used displaced worker after my industry did a shift and it did not automatically trigger the simplified means test. In our case, we still had DH’s income.
Oh, great. So, our base year for D16’s freshman AND sophomore year is going to be the 2015 income when both of us had jobs (minus two months). Groan.
And I thought the only snafu we might encounter with FAFSA would be obtaining our income tax return transcript, because someone tried to claim my husband’s tax refund by filing a fraudulent online tax return last year. I expected this might cause problems in the future as resolving it with the IRS (which discovered the fraud attempt) was very difficult (IRS is not easy to work with even if you’re the victim of fraud). Sigh.
Last time this happened he did a stint at a home improvement big box store, once the unemployment checks stopped. That might put us at $70K gross including unemployment benefit income in 2016.