When is federal aid decided?

[Melissa B]

Is there a date when federal aid is decided or announced? My dd has received her financial aid statement and it gives a number for federal aid with the word predicted in front of it. When is it official? I am not sure whether their predicted number was from my projected numbers or from the actual 2015 tax forms. Dd was awarded a substantial grant from her chosen college and is very relieved and grateful. Only one of the requirements for accepting the grant is questionable and this is that she must show need and they use federal aid as the deciding factor. If she is issued any federal aid she can accept the grant. If she is not, the grant will be rescinded. How long do I have to worry before we find out for certain?

[katilac]

Edited bc I just realized that maybe you are talking about the SAR and not the offer from the school like I first thought. Most of this holds true in either case: if you filed accurately, and aren't on the very edge of needing aid, you will be fine. The numbers for federal aid might change, but I've never heard of someone going from a predicted offer to no aid at all, so the school offer should be safe.  

 

When did you fill out FASFA? Did you get a Student Aid Report from them yet? 

 

If you have an SAR that shows you are eligible for federal aid, you are fine. If you didn't get one by email or mail yet, try logging on to your account, you can view it that way when it's ready. The schools you list can see your SAR as well, and that's how they come up with their offers. 

 

If you filed late and don't have an SAR yet, but have an accurate FASFA forecast that shows that you will get federal aid, you should still be fine. The only things that would add uncertainty would be mistakes in your information, or if you were on the absolute edge of needing any type of federal aid, like just barely getting a loan or work study; if it shows you should get a Pell grant, it will be fine as long as you used accurate information.

 

Some schools word it this way because they want to make sure people are filing honestly and showing all assets. If you qualify for work study, you have to take work study to get their grant, you can't skip it because you actually plan to have grandma pay a big chunk of tuition, kwim? 

Edited April 9, 2016 by katilac

[Melissa B]

Edited bc I just realized that maybe you are talking about the SAR and not the offer from the school like I first thought. Most of this holds true in either case: if you filed accurately, and aren't on the very edge of needing aid, you will be fine. The numbers for federal aid might change, but I've never heard of someone going from a predicted offer to no aid at all, so the school offer should be safe.  

 

When did you fill out FASFA? Did you get a Student Aid Report from them yet? 

 

If you have an SAR that shows you are eligible for federal aid, you are fine. If you didn't get one by email or mail yet, try logging on to your account, you can view it that way when it's ready. The schools you list can see your SAR as well, and that's how they come up with their offers. 

 

If you filed late and don't have an SAR yet, but have an accurate FASFA forecast that shows that you will get federal aid, you should still be fine. The only things that would add uncertainty would be mistakes in your information, or if you were on the absolute edge of needing any type of federal aid, like just barely getting a loan or work study; if it shows you should get a Pell grant, it will be fine as long as you used accurate information.

 

Some schools word it this way because they want to make sure people are filing honestly and showing all assets. If you qualify for work study, you have to take work study to get their grant, you can't skip it because you actually plan to have grandma pay a big chunk of tuition, kwim? 

 

 

Thanks, I didn't think to look it up online at FASFA. I filed early, before we had finished our taxes, as I knew we wouldn't finish taxes until March. The college did use my predicted numbers and not our actual numbers. The FASFA form hasn't been updated yet. And unfortunately, we were near the line and once the actual updated tax numbers come through we will be above the level for federal aid.

 

I feel terrible for my dd. The university issued her a grant that covers 2/3 tuition for all four years. Now she will have to earn all of that money herself. She is going to be so disappointed. :(

[JanetC]

Yes, you need to update the FAFSA with your final tax numbers.

 

How off were your estimates? If 500 in extra income caused you to lose 5000 in aid, I think you need to file an appeal with the school for the grants part of their aid. (A Pell grant or subsidized loan cannot be appealed, however.)

 

Unfortunately, with the school's own money, they can allocate it with little rhyme or reason sometimes.

[Melissa B]

Yes, you need to update the FAFSA with your final tax numbers.

 

How off were your estimates? If 500 in extra income caused you to lose 5000 in aid, I think you need to file an appeal with the school for the grants part of their aid. (A Pell grant or subsidized loan cannot be appealed, however.)

 

Unfortunately, with the school's own money, they can allocate it with little rhyme or reason sometimes.

 

Well, we actually overestimated our annual income, but we had to pay taxes this year on an old 401K from several years ago. We were just notified of this, this year. It is all lumped together as total income for the FAFSA and puts us well over. Dd will lose out on $16000 in grant money. We can't appeal to the university, as receiving federal aid is required in order to accept the grant. Such is life, I suppose.

[Granny_Weatherwax]

I'm surprised you haven't received any communication from the school asking for the updated FAFSA.  We had to file an estimated FAFSA early due to DD's college requirements with state aid.  Within two weeks of submitting the FAFSA the school contacted us and requested we update the FAFSA ASAP.  Another two weeks and another letter was received.  I updated the FAFSA as soon as our taxes were complete. No new letters but no fin aid offer yet either.  We usually don't receive her award until mid-June but state funds go by submission date so we had to submit FAFSA early for the time stamp.

 

[Granny_Weatherwax]

Well, we actually overestimated our annual income, but we had to pay taxes this year on an old 401K from several years ago. We were just notified of this, this year. It is all lumped together as total income for the FAFSA and puts us well over. Dd will lose out on $16000 in grant money. We can't appeal to the university, as receiving federal aid is required in order to accept the grant. Such is life, I suppose.

 

:(  I am so sorry.  I would still submit an updated FAFSA and see what happens.

[JanetC]

Well, we actually overestimated our annual income, but we had to pay taxes this year on an old 401K from several years ago. We were just notified of this, this year. It is all lumped together as total income for the FAFSA and puts us well over. Dd will lose out on $16000 in grant money. We can't appeal to the university, as receiving federal aid is required in order to accept the grant. Such is life, I suppose.

 

Wait, if you got the 401k money a couple years ago, could you file an amended return for that year, rather than lumping it into your 2015 return? Especially if it's costing you a lot of financial aid, and especially since 2015 "counts double" in the prior-prior switch over.

[Melissa B]

Wait, if you got the 401k money a couple years ago, could you file an amended return for that year, rather than lumping it into your 2015 return? Especially if it's costing you a lot of financial aid, and especially since 2015 "counts double" in the prior-prior switch over.

 

Sorry for the book long explanation.

 

I don't think so. It is a weird situation. My husband works for an international corporation. We borrowed the money against our 401K years ago, before the financial crisis when that kind of thing was allowed without interest penalties, etc. Then husband's job shifted and a new 401K was begun, but old job was considered a 'subsidiary company' so we could continue to make very low monthly payments to that 401K. No big deal, it is our own money, no interest is charged and it will eventually be paid off and rolled into current 401K. Then, this year there was a 'restructuring' and former subsidiary company is no longer a subsidiary company. We get a letter telling us we must make very large monthly payments, including interest or close the account. Rolling the account over was not an option. So we had to close the account. We told them to apply the money in the account to our taxes. It wound up covering the 20% tax penalty, but not much more. Basically, just bad, bad luck on the restructuring happening this year.

[JanetC]

We told them to apply the money in the account to our taxes. It wound up covering the 20% tax penalty, but not much more. Basically, just bad, bad luck on the restructuring happening this year.

 

Sigh. The federal government does not have an appeals process for weird cases, unfortunately. You could still use it as a basis for asking for professional judgment from individual schools.

[DebbS]

Have you considered opening another retirement savings account - either an IRA or 401K and putting your yearly maximum back in? Maybe both you and your husband could do this. This would lower your adjusted gross income by that amount. You have until April 15th, 2016 to this for 2015.

[Melissa B]

Have you considered opening another retirement savings account - either an IRA or 401K and putting your yearly maximum back in? Maybe both you and your husband could do this. This would lower your adjusted gross income by that amount. You have until April 15th, 2016 to this for 2015.

 

That would be a good idea and would likely lower our income just enough. Definitely an idea to keep in mind for the future. Unfortunately, we don't have enough money to deposit to lower our income level as needed. We borrowed and spent the money about ten years ago. We are having to "claim" the income and pay the taxes this year.

[BlsdMama]

That would be a good idea and would likely lower our income just enough. Definitely an idea to keep in mind for the future. Unfortunately, we don't have enough money to deposit to lower our income level as needed. We borrowed and spent the money about ten years ago. We are having to "claim" the income and pay the taxes this year.

 

Keeping this in mind, just because she is out the need based grant this year does not mean she won't receive subsequent grants next year when your income is more accurately represented vs. This year's odd circumstances.

[JanetC]

Keeping this in mind, just because she is out the need based grant this year does not mean she won't receive subsequent grants next year when your income is more accurately represented vs. This year's odd circumstances.

2015 is a really bad year for weird financial events, because it counts twice. She can't escape this for two years.

 

https://studentaid.ed.gov/sa/about/announcements/fafsa-changes

Edited April 10, 2016 by JanetC

[JanetC]

Have you considered opening another retirement savings account - either an IRA or 401K and putting your yearly maximum back in? Maybe both you and your husband could do this. This would lower your adjusted gross income by that amount. You have until April 15th, 2016 to this for 2015.

This doesn't actually improve your financial aid picture. The FAFSA and PROFILE wizards will add back your voluntary payroll deductions, and if you use a deductible IRA, they'll add in your tax savings from that to your income as well.

[MerryAtHope]

Well, we actually overestimated our annual income, but we had to pay taxes this year on an old 401K from several years ago. We were just notified of this, this year. It is all lumped together as total income for the FAFSA and puts us well over. Dd will lose out on $16000 in grant money. We can't appeal to the university, as receiving federal aid is required in order to accept the grant. Such is life, I suppose.

 

 

Sorry for the book long explanation.

 

I don't think so. It is a weird situation. My husband works for an international corporation. We borrowed the money against our 401K years ago, before the financial crisis when that kind of thing was allowed without interest penalties, etc. Then husband's job shifted and a new 401K was begun, but old job was considered a 'subsidiary company' so we could continue to make very low monthly payments to that 401K. No big deal, it is our own money, no interest is charged and it will eventually be paid off and rolled into current 401K. Then, this year there was a 'restructuring' and former subsidiary company is no longer a subsidiary company. We get a letter telling us we must make very large monthly payments, including interest or close the account. Rolling the account over was not an option. So we had to close the account. We told them to apply the money in the account to our taxes. It wound up covering the 20% tax penalty, but not much more. Basically, just bad, bad luck on the restructuring happening this year.

 

I think I would appeal to the college and explain the special circumstances. The worst that happens is that they still say no, and what would you have lost? Just because something is listed as a requirement doesn't necessarily mean there are never exceptions. I think it's worth pursuing higher up the chain if needed to see if they will consider your extenuating circumstances. Your "income" really isn't income for this year & it doesn't seem fair that it will be included as such. 

Edited April 11, 2016 by MerryAtHope