<p>Hi all,</p>
<p>I’m planning ahead, have a son who will be graduating HS next year and I’m looking at how I’ll have to fill out the FAFSA for next January. </p>
<p>That’s the problem. This year our family is making a hardship withdrawal from my 401k to stop a foreclosure, so for the tax year 2011, I’ll be showing about twice the income we normally make, which will totally skew the FAFSA if it just relies on numbers. Is there anywhere on the FAFSA where you can explain and show why you have such a high income on this particular year?</p>
<p>Thanks in advance</p>
<p>You wouldn’t be able to explain it on the FAFSA application itself but, after you submit it, you can appeal to his school(s) to adjust your reported income data based on special circumstances. It is entirely up to the FA office at the school, some schools may consider it and others may not. Either way, what one school does or doesn’t do is not binding on the others. I don’t know if that will work or not, but it’s probably your best and only course of action. Make sure you keep whatever documents you have related to the pending foreclosure and 401(k) harship withdrawal as they will certainly be needed!</p>
<p>I doubt you’ll find many FAA willing to do much of anything for you based on a pending forclosure. Although it’s unfortunate, living in a house you can’t afford isn’t much of a hardship case. </p>
<p>If you had other things going on, like a job layoff, or high paid medical or education costs, you might have a better chance. Debt (even mortgage debt) is not that unusual </p>
<p>It is my experience, that if you can afford a house and have the resources to even HAVE a 401K, you aren’t going to qualify for free money anyway so it isn’t going to matter… even with a minor adjustments, you may still not qualify for free money anyway.</p>
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<p>How would you know this if you work at a FAFSA only school since home equity/mortgage information and retirement accounts are not reported? I have seen many kids who are eligible for federal and state grants when their parents have both. I suppose it may depend on the cost of housing in the area you live/work in. I am obviously not in an area with high average housing costs!</p>
<p>I would suggest at least trying for an adjustment; the most the aid officer can say is no. Be prepared to provide proof that the entire distribution went directly to the mortgage company to stop the foreclosure. The FAO MAY (not will …) decide to adjust the AGI, which may lower your EFC.</p>
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but like I said, just because it lowers your EFC doesn’t mean it will nec be low enough to get grants. It depends on how high/low it was to begin with. Many of the adjustments made don’t always lower an EFC enough to get you into the Pell grant eligible category.</p>