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?
Well, 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.