Tag: financial aid appeal

Kristi, an EducationGrant reader, wrote in with an excellent question: what’s the secret to getting more financial aid when your personal finances get hit by the recession? More specifically: since the FAFSA bases your ability to pay for college on the previous year’s tax return — the one before you lost your job and your income — how can it help you get the amount of financial aid you actually need?

FAFSA OnlineWell, it’s true, the FAFSA seems a little screwy in the way it calculates your ability to contribute to your college education from your prior year’s tax return rather than on your current financial circumstances. Believe it or not, there is a reason for this, but unfortunately, it only holds true in a stable, prosperous economy. When students try to make the most out of their job loss by returning to school, however, their need for any financial aid at all is probably because they don’t have an income any more. In 2009, many students are in this boat.

The secret to getting a more realistic amount of financial aid

Is there a way to overcome your FAFSA’s inaccuracy? How do you tell schools that you don’t really have the income that your earlier tax return says you do?

Karen Stabiner, author of The College Insider column at The Huffington Post, says:

“So here’s a secret right up front, from a long-time financial aid officer: The letter of special circumstance. When you’re done with bubble grids, write a letter that says whatever you think a college needs to know: That the money you have is earmarked for seven dependent relatives, that the money you don’t have is due to altruism and not misguided greed, that you’re willing to sell your second car but you’re too young to cash in the IRA without a penalty.

“It is your one opportunity to be a human being and not a set of numbers. If you need money, don’t be shy. Write the letter.”

What’s a letter of special circumstance?

Another name for the “letter of special circumstance” is “letter of appeal.” By either name, it’s an opportunity for you to explain to the school(s) you’re applying to how your personal finances have changed since the tax return information reflected on your FAFSA, and the reasons you need more financial aid than your FAFSA indicates.

A financial aid appeal is a letter of special circumstance plus a little more, including:

  • Call the school financial aid office first to see if there’s an appeal form they require in addition to your letter of special circumstance.
  • You’ll need to provide proof of your current circumstances— a copy of an unemployment benefits stub, for example.
  • Be as thorough and detailed as you can about any sources of income you have and all the expenditures in your budget, such as a mortgage, rent, and car payments.
  • If you’re a custodial parent or a parent paying child support, say so.
  • Share the education goal you hope to achieve and why you think their school’s program can help you meet it.
  • If additional financial aid will make or break your ability to enroll, say that, too (but be careful to sound grateful for their consideration, not demanding!).

Where do you send your letter of special circumstance?

You don’t send your letter of special circumstance in with your FAFSA. You send it to the school you’re applying to because it’s your school’s financial aid office that will handle your request for more aid. Your school may have its own grants for students who experience a change in circumstances, or it will work with the Department of Education to get you more federal financial aid. Your financial aid office may recommend that you take out a subsidized or unsubsidized federal Stafford loan if there is no more grant money available.

Filing a FAFSA is still Step One

With regard to the FAFSA, Ms. Stabiner recommends: “Get your finances in order as though the IRS deadline were January 15 instead of April, because you can download the FAFSA forms at 12:01 a.m. on January first — and in this economy, there’s something to be said for the sooner the better.”

If the education program you want to enroll in begins between now and June 30th, 2010 (spring 2010 semester and early summer), you’ll use the 2009-2010 FAFSA, which is available now. If the program you want to enroll in begins AFTER June 30th, 2010, you’ll need to use the 2010-2011 FAFSA, which will not be available until January 1, 2010. Either way, plan to file online, which is much faster.

One thing to look forward to with the 2010-2011 FAFSA: no more filling in all your tax return information yourself. With the click of a button, you’ll be able to transfer it over electronically from the IRS. The 2010-2011 FAFSA, of course, will use your 2009 tax return, which may be a more accurate reflection of your current circumstances.

But for the years when your FAFSA doesn’t tell the whole story, there’s the secret to getting the financial aid you really need: a letter of special circumstance that supplies the latest chapters.

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The school year is approaching and thousands more college students are enrolled this fall than last year. In one more ripple effect of the recession, traditional and nontraditional students alike are coming up short on tuition money and wondering how to appeal for more financial aid.

Wall Street Journal: Families Appeal to Colleges for Extra Aid

A quick look at college financial aid pages around the web turned up some consistent recommendations, particularly if your financial circumstances have gotten worse since you filed your FAFSA. Financial aid administrators have the flexibility to adjust aid awards based on special circumstances such as a job loss in your family. If you can prove a loss of income or other specific hardships, you should file an appeal with your school for more financial aid. Even if school itself has no funds remaining, your circumstances may make you more eligible, or your parents more eligible, for low-cost federal loans.

What is a financial aid appeal?

A financial aid appeal is a formal request to have your financial aid package reviewed and increased due to changes beyond your family’s control that have occurred since your FAFSA was processed or that were not reflected in your FAFSA.

Hardships and changes in circumstances eligible for an appeal will vary from school to school, but most schools will include:

  • Significant or catastrophic loss of family income or benefits for either you or your parents (if you’re still a dependent they can claim on their taxes) due to loss of job, disability, retirement, or homelessness. Most financial aid offices are restricting appeals to families in which unemployment or underemployment has lasted 8 weeks or longer.
  • You or your parent becomes widowed, separated, or divorced after the FAFSA was filed
  • You or your parent have necessary medical and/or dental expenses that were paid but not covered by insurance and not likely to be covered by insurance in the future
  • Personal bankruptcy
  • Significant and unexpected disability or medical cost
  • Childcare expenses required in order for you to attend classes
  • Additional costs for required research, internship, or field study
  • Unexpected transportation costs
  • Increase in on-campus boarding costs when increase is not the result of a choice on student’s part
  • Other special circumstances outside of your control (for example, unusual expenses related to special education needs of a brother or sister)

There are also some common appeal circumstances that schools will not consider:

  • Personal choice decisions: you’ve run out of money due to credit card expenses, property purchased for income, high mortgage payments, or a family vacation, wedding, or new car
  • Your income or your parents’ income level is already too high to have any effect on the appeal outcome

How to file a financial aid appeal:

  • Confirm that your FAFSA for the current year is filed and processed
  • Call your financial aid office and tell them why you want to appeal for more financial aid. Ask for any special forms required for filing an appeal and any details you should know about the process (does your financial aid office have a web-page listing all the appeal instructions?)
  • Write a letter explaining your circumstances. Be detailed, not vague.
  • Submit the letter with the appeal form and financial documentation your financial aid administrator requires. This could include the state confirmation of unemployment and/or termination of benefits, copies of medical bills that weren’t covered by insurance, a federal tax return, or the change in income you’re anticipating for the year ahead based on the change in your financial circumstances
  • Ask when you should expect to hear back from them so you don’t bug them with phone calls before the time you could expect an answer

Federal Aid First. . . and Last

It may be that your appeal for more financial aid will be accepted only if your school can get more federal funding for you. Unfortunately, if your FAFSA determined that your Expected Family Contribution (EFC) was zero (0), then you’re already eligible for the maximum amount for federal student aid you can get. If the school or state cannot fill the gap, your appeal for more financial aid may be denied.

By the way, if you haven’t yet filed a FAFSA (Free Application for Federal Student Aid) for the coming school year, you still have plenty of time. Apply online, it’s fastest and most efficient.

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