You're absolutely doing the right thing by protecting your retirement! I'm a recent college grad who went through a similar situation with my parents 4 years ago. They had a modest retirement fund and FAFSA expected them to contribute way more than they could afford without jeopardizing their future. I was initially disappointed about not going to my "dream school" but ended up at our state university with merit scholarships. Here's what worked for us: I applied to 12 schools where my stats put me in the top 25% of applicants for merit aid. Ended up with a full tuition scholarship at a great state school. Now I'm debt-free, have a good job, and my parents can actually retire someday. Meanwhile, friends from high school are drowning in loan payments for degrees that aren't any better than mine. Your daughter might be upset now, but you're teaching her an invaluable lesson about financial responsibility. There are SO many paths to success that don't involve crushing debt. Stand your ground!

You are absolutely NOT wrong to protect your retirement! I'm a financial advisor and I see this scenario constantly - parents being guilted into taking on massive debt for their kids' education while their own financial security crumbles. At 52 with $217K saved, you're actually behind where you should be for retirement (rule of thumb is 5-6x your annual income by age 50). Taking on $150K+ in Parent PLUS loans would be financial suicide. The harsh reality is that your daughter has options - she can attend a less expensive school, earn merit scholarships, or take on reasonable student debt herself. But you cannot get loans for retirement. Social Security alone won't be enough, and working until you're 75 because you drained your savings for college is not a viable plan. I've seen too many families destroy their financial futures for the "college experience." Your daughter will adapt and thrive elsewhere, but your retirement security, once gone, is nearly impossible to rebuild at your age. You're being a responsible parent by setting financial boundaries.

UPDATE: We logged in tonight and re-signed the FAFSA. It seems to have worked! The status now shows "Processing" instead of "Action Required." According to the site, it should take 3-5 days for processing, and then schools will receive our information. Thanks everyone for your help and suggestions! This new system has been such a headache.

So glad to see you got it resolved! This same thing happened to my family last month and it was incredibly stressful. For anyone else dealing with this issue, I found that clearing browser cache and cookies before attempting to re-sign can help avoid some of the technical glitches. Also, if you're still having trouble, try logging in during off-peak hours (early morning or late night) when there's less traffic on the system. The whole FAFSA rollout has been a nightmare this year, but at least there are workarounds for most of these issues.

Just wanted to add one more thing that helped us - keep track of all the deadlines! Even if you decide to file both FAFSAs, the deadlines can be different for each academic year. Some state grants and institutional aid have earlier deadlines than the federal ones, and these can vary between the gap year and enrollment year. We almost missed a state grant deadline because we assumed they were the same. Also, if your daughter ends up changing her mind about which school to attend during her gap year, you might need to update her FAFSA with the new school code. Good luck navigating this process!

As someone who works in financial aid, I want to emphasize something that hasn't been mentioned yet - timing of when you submit can matter for state aid! Some states have limited funding pools that are distributed on a first-come, first-served basis. If your daughter is planning to attend college in your home state, check if your state has early FAFSA deadlines or limited grant funds. For example, some states require the FAFSA to be submitted by March 1st for maximum state grant eligibility. This could influence whether you want to submit the gap year FAFSA just to establish that early filing pattern. Also, if your family's financial situation is likely to change significantly between 2023 and 2024 (job loss, divorce, major medical expenses, etc.), the different tax years used for each FAFSA could work in your favor or against you, so factor that into your decision too.

UPDATE: We fixed it! Thanks everyone for your help. What worked was having my dad log in and complete his ENTIRE contributor section. After he submitted his part, I waited about 2 hours, then I tried the tip from @profile4 about using the "Start a New FAFSA" link, and it worked! I was able to access my application again and continue where we left off. No data was lost thankfully. For anyone else with this issue, make sure your contributor completes their ENTIRE section before you try to continue.

Wow, this thread is incredibly helpful! I'm dealing with the exact same issue right now - added my mom as a contributor yesterday and now I'm completely locked out of my FAFSA. Reading through all these responses, it sounds like the key is making sure the parent contributor completes their ENTIRE section first. I'm going to have my mom log in tonight and finish everything on her end, then try the "Start a New FAFSA" workaround tomorrow. It's so frustrating that this is such a common problem with the new system - you'd think they would have fixed these bugs by now! Thanks everyone for sharing your experiences and solutions.

Update: I checked our FAFSA submission and all the numbers were entered correctly. I also called three of the colleges where my daughter applied and they were actually really understanding! Two of them sent me their Special Circumstances forms specifically for reporting one-time financial events, and the third one asked me to wait until we receive the aid package and then appeal if needed. Thanks everyone for the advice and reassurance. I feel much better knowing this isn't as unusual as I thought!

As someone who just went through this process with my son, I can confirm that what you're experiencing is actually pretty normal with the new FAFSA system! The key thing to remember is that colleges use both numbers - they see your Pell eligibility (which shows your income situation) AND your SAI (which reflects the temporary asset bump from the inheritance). Most schools I dealt with were very understanding about one-time events like inheritances, especially when families are transparent about what the money is being used for. Since you mentioned it's for medical bills and home repairs, that's exactly the kind of situation financial aid offices are equipped to handle. One tip: when you fill out those Special Circumstances forms, be specific about dollar amounts being allocated to medical expenses and repairs. Documentation really helps, but don't overwhelm them with paperwork upfront - just mention you have it available if needed. The fact that you still qualify for Pell actually works in your favor because it signals to schools that your family's day-to-day financial reality is different from what that big SAI number suggests. Good luck with the process!