401K rollover inflated my daughter's SAI to $29,000+ on $40K income - need FAFSA appeal advice

This exact scenario happened to me with my son's FAFSA last year! The 401k rollover gets reported on your taxes which then inflates your income on the FAFSA calculation. You need to request a "Professional Judgment Review" or "Special Circumstances Review" from the financial aid office. Each school has their own form for this. Include a copy of your 1099-R showing the rollover amount, a brief explanation letter, and any documentation from your financial institutions showing it was just a rollover, not new income. Most schools are very familiar with this issue and should adjust the SAI calculation accordingly.

u should definitely appeal it!!! colleges have whats called professional judgement for exactly this kind of thing. my brother had this happen and got his fixed but took FOREVER to get anyone on the phone

I work in financial aid at a university, and this is a very common issue we see with the FAFSA. The 401k rollover appears as income on your tax return (usually on line 4a of your 1040), but it's not actually income you had available for educational expenses. This is absolutely a valid reason for a professional judgment review. Here's what you should do: 1. Contact each college's financial aid office directly - explain your situation briefly 2. Ask for their "Professional Judgment" or "Special Circumstances" form 3. Submit the completed form along with: - Copy of your tax return - Copy of the 1099-R showing the rollover - Brief letter explaining the rollover wasn't spendable income - Statements from both retirement accounts showing the money moved from one to the other Most financial aid offices are very reasonable about these adjustments when properly documented. They want to calculate an accurate SAI that reflects your true ability to pay.

The same thing happened to me this year! I did a 403b rollover (teacher retirement) and it completely messed up our FAFSA. I've spent HOURS trying to get through to someone at Federal Student Aid to fix it. I kept getting disconnected after waiting forever. So frustrating when it's such an obvious issue!

This is a perfect example of why the FAFSA system is so fundamentally broken. The algorithm makes no distinction between actual income and retirement account transfers, creating artificial hardships for families. Colleges know this happens all the time, but they've built a system where YOU have to jump through hoops to fix THEIR flawed calculations. It's disgusting how many families get caught in this trap every year. And watch out - even after you submit all the proper documentation, some schools will only partially adjust your SAI. They'll claim they have "limited professional judgment funds" which is complete nonsense since this isn't about funds, it's about CORRECTLY CALCULATING your actual income in the first place!

my cousin went thru this exact thing and she just kept calling the financial aid office til they fixed it. took like 3 weeks but they eventually knocked like $15k off her SAI. the key is being super nice to the financial aid people cuz they deal with angry parents all day long lol. also make sure u talk to the same person each time so u dont have to explain everything over and over

Since you mentioned being a single parent on $40k income, I also want to make sure you know that even after they fix the 401k rollover issue, you should check if your daughter qualifies for the Pell Grant and other need-based aid. With your corrected income, she likely will qualify for significant federal aid beyond just loans. The school might also have their own institutional grants for students in your situation. Make sure to ask about ALL available aid options when you contact them about the professional judgment review.

Quick update - got my son's financial aid recalculated after our retirement rollover issue. Took about 3 weeks after submitting all the docs. His SAI went from $33k down to $8k which made a HUGE difference in his aid package! Don't give up hope - the schools really do understand this is a common problem with the FAFSA calculations.