FAFSA Appeal Process: Will Emergency Savings Impact SAI for Retired Parents with Income Reduction?

yes ur cash will definitely count against u in the SAI. my mom went thru this last year w/ my brother. they look at ALL assets not just income when they calculate that number. its so stupid honestly

The situation you're describing is EXACTLY why I hate the FAFSA system. Your parents did everything right - saved responsibly, kept emergency funds, planned ahead - and now they're being PUNISHED for it. Meanwhile families that blow every penny they earn get more aid. The whole system is designed to reward financial irresponsibility!!

Financial aid counselor here! Yes, cash/savings are considered assets in the SAI formula, but there's good news for your situation: 1. The parents' asset protection allowance shields some of your savings based on the age of your oldest parent (higher protection for older parents) 2. Only a percentage of assets above that threshold count against you (around 5-6% for parent assets) 3. Most importantly: In an appeal based on income reduction, many schools will primarily focus on your current income situation, not assets For your appeal, emphasize: - The documentable income drop from 2022 to 2023 - That the capital gains were a one-time event, not recurring income - Your dad's early retirement/downsizing circumstance - The necessary emergency savings for your older home's maintenance Provide documentation of the income reduction and property tax burden. Every school handles appeals differently, but many have specific processes for significant income changes.

Have you considerd calling the Federal Srudent Aid helpline directly to ask about the appeals process? That's what I tried to do when my daughter's FAFSA had a similar issue with income changes not being reflected, but COULD NOT get through for weeks. Then I found Claimyr.com and they got me connected to an agent in about 10 minutes! Totally worth it - you can see how it works at https://youtu.be/TbC8dZQWYNQ The FSA agent explained exactly how the income appeals process works and what documentation we needed. Saved us so much stress.

Your situation is common for families with volatile income years. Here's what you should know about appealing and assets: 1. Cash reserves are counted as assets in the SAI formula, but at only about 5.64% of value exceeding the asset protection allowance (after sheltering retirement accounts and home equity) 2. For a 62-year-old parent, approximately $7,400-9,500 of assets are already protected through the asset protection allowance 3. More importantly, most universities have specific "Professional Judgment" forms for situations like yours where income has substantially changed You should immediately contact your financial aid office and ask about their: - Income Reduction Appeal process - Special Circumstances form - Professional Judgment Review You'll likely need 2023 tax documents, proof of retirement/job loss, documentation of property taxes, and estimates for home repairs. Schools have discretion in these situations, and many understand the need for emergency savings, especially when coupled with income reduction and early retirement.

When my hubby got laid off, our EFC (now SAI) was still high because of our savings. But after appealing and showing our actual income was way less than previous year + explaining our emergency fund was for medical expenses, the university adjusted our daughter's aid package. Different schools handled it differently tho - her first choice hardly budged but her second choice gave way more aid after the same appeal. Frustrating how inconsistent it is.

my cousin went thru somethin similar last yr and the most important thing was having documentation for EVERYTHING. like literally every bill, bank statement, retirement fund statement, proof of the job loss, everything. the more paperwork u bring the better chance u have honestly

To answer your follow-up question: Most schools will accept appeals before your 2023 taxes are filed. Typically you'll provide: 1. Last few months of pay stubs showing current income 2. Unemployment documentation (if applicable) 3. Letter explaining the situation (job loss, retirement) 4. Last year's tax return as a baseline 5. Estimated income for current year Once you file 2023 taxes, you may need to provide those as additional documentation, but you can absolutely start the process now. Don't wait - financial aid funds are often distributed on a first-come basis for appeals!

Just remmber that different schools have different policies on apeals. My son applied to 6 schools and each one had completely different requirements for the special circumstances appeal. One wanted a massive pile of documentation, another just needed a simple form and proof of income change. Call each school financial aid office directly to ask about their specific "professional judgment" process.

One thing that really helped us was documenting the "necessary" nature of your emergency savings. Since you mentioned your house is over 110 years old and you're dealing with high property taxes, make sure to get estimates for any major repairs that might be needed (roof, plumbing, electrical, etc.) and include those in your appeal. We had to do this when my mom's income dropped after she became disabled - we showed that our savings weren't just sitting there, but were earmarked for specific necessary expenses. The financial aid office was much more understanding when they could see we had $15k set aside for a new roof that was already leaking, rather than just "emergency savings." Also, definitely emphasize that your dad's early retirement wasn't voluntary - corporate downsizing is a legitimate hardship that most schools will take into consideration.