Will $129k in savings hurt my son's FAFSA eligibility after husband's severance package?

Thank you for this info. Do I need to file the FAFSA first and then submit the special circumstances appeal to each individual school? Or can I somehow note this situation directly on the FAFSA application?

u should DEF look into that special circumstancs thing. my cousin did that last yr when her dad lost his job and she got like WAY more money after they appealed

Yes, you'll need to complete and submit the FAFSA first, then contact each school's financial aid office separately for their specific appeal process. The FAFSA itself doesn't have a place to explain special circumstances like yours. Each school will have their own forms and documentation requirements for the appeal.

I understand the frustration, but I need to caution against moving assets solely to improve FAFSA outcomes. The FAFSA asks about assets as of the day you file, but there are rules against manipulating assets just to increase aid eligibility. Legitimate financial planning is fine, but significant asset transfers shortly before filing could raise red flags. Paying down your mortgage could be a reasonable financial move regardless of FAFSA, as would maximizing retirement contributions (which are protected assets). But I'd recommend consulting with a financial advisor who specializes in college planning before making any major moves.

Maybe your right but the whole system is SO UNFAIR to families who have one good year because of a severance and then struggle after. We needed that money to live on while my husband was unemployed for 10 months but FAFSA treated us like we were wealthy!!!

This is really helpful. I didn't realize the CSS Profile gives you space to explain special circumstances directly. Do all private colleges use CSS Profile or just some? And should we mention the situation to colleges during the application process or wait until the financial aid offers come in?

Not all private colleges use CSS Profile - only about 200 schools nationwide (mostly selective institutions). You can find the complete list on the College Board website. As for timing, don't wait for financial aid offers. Be proactive and contact financial aid offices in November/December after submitting applications. This gives them time to consider your circumstances before they formulate initial offers. Having this conversation after receiving offers puts you in a weaker negotiating position.

You're right about the multiple children in college change - that was a significant modification in the new FAFSA that negatively impacts many families. However, there are still some advantages to 529 plans. While they are counted as parent assets (at that same 5.64% rate), distributions from parent-owned 529 plans no longer need to be reported as student income, which is an improvement from previous years. Calling Federal Student Aid directly won't help much with this specific situation though. FSA representatives can't modify your SAI calculation or override the formula - only individual financial aid offices can make professional judgment adjustments. If you do need to reach FSA for other questions, I've had success using Claimyr (claimyr.com) to get through quickly instead of waiting on hold for hours. They have a good video explaining how it works: https://youtu.be/TbC8dZQWYNQ

thx for that info! didnt know about the 529 thing changing, thats better at least. my brother waited 3hrs on hold with FSA last month so that claimyr thing sounds worth checking out

While I understand your frustration, the system does have mechanisms to address income changes - specifically the professional judgment process I mentioned earlier. Schools don't want to base decisions on outdated information either. The reason they use prior-prior year tax information is to give families time to complete the forms before college application deadlines. Remember also that only a small percentage of your savings (5.64% maximum) is considered available for college expenses each year. The system doesn't expect you to spend your entire savings on one year of college.

Maybe so but it's still penalizing responsibility. And the appeal process is completely inconsistent between schools. Some are generous with adjustments and others barely budge no matter what documentation you provide. It's all so arbitrary!

Yes, retirement accounts (401k, IRA, 403b, etc.) are NOT counted as assets on the FAFSA. They're completely protected. So maximizing retirement contributions before filing FAFSA is generally a good strategy, as long as it makes sense for your overall financial plan. One other thing to consider: if your son is applying to very selective private colleges that require the CSS Profile, some of them may consider retirement assets in their institutional methodology, though most don't. Each school has its own formula. College Board's site has a list of what assets each CSS Profile school considers.

That's really helpful to know. We'll look into maxing out our retirement contributions before filing. I appreciate everyone's advice - this has been so much more helpful than the generic information on the studentaid.gov website.

This is a great point about merit scholarships. His GPA and test scores are strong, so we'll definitely look into schools that offer good merit aid. And thanks for the tip about creating FSA IDs early - I hadn't thought about that.

merit scholarships saved my butt!! i got nothing from fafsa but got $22k/yr from my school cuz of my grades and test scores. def look into that!!!

This is excellent advice. I'll definitely create a tracking system for all our communications. Do you recommend calling financial aid offices or is email better for initial contact about special circumstances?

I recommend a two-pronged approach: email first to establish a paper trail, then follow up with a phone call about 3-5 business days later. Your initial email should be brief but specific - identify your son by name and application ID (if available), mention the specific circumstances (severance package and income reduction), and request information about their professional judgment process. The follow-up call will ensure your case gets attention, and you can reference the email you've already sent.

That's a really good point about the rollover options! I hadn't considered whether any of the severance money could be moved to retirement accounts. We should definitely check with our financial advisor about that. And thanks for mentioning state aid - I honestly hadn't even thought to look into what our state offers beyond the federal programs. This whole process feels so overwhelming but everyone's advice is really helping me feel like we have a plan now.

This is such valuable information about timing the FAFSA filing! I never thought about filing right after paying large bills to temporarily lower our account balance. That seems like a smart strategy that's completely legitimate. Could you clarify what the asset protection allowance amount would be for someone in their early 50s? And when you mention schools with different financial aid philosophies, are there specific types of institutions that tend to be more generous with professional judgment appeals? I'm trying to help my son create a balanced list of reach, match, and safety schools that might also be more understanding of our unusual financial situation.

For someone in their early 50s, the asset protection allowance is approximately $50,000-60,000 (it varies slightly based on exact age and updates annually). This means that amount is completely excluded before the 5.64% assessment kicks in on the remainder. Regarding institutional philosophies, liberal arts colleges and smaller private universities often have more flexibility with professional judgment appeals because they have smaller financial aid offices where counselors can give individual attention to cases. Large state schools, while they do professional judgment, tend to be more rigid due to volume. Schools with larger endowments (you can look this up) also tend to be more generous overall. Some schools are specifically known for "meeting full demonstrated need" - Harvard, Yale, Princeton, etc. - but even among less elite schools, those that emphasize "holistic" admissions often take a similarly holistic approach to financial aid appeals. Look for schools that mention "individualized financial aid review" or similar language on their financial aid websites. One tip: during college visits or info sessions, don't hesitate to ask the financial aid office directly about their professional judgment process and how they handle income changes. Their willingness to discuss it openly can tell you a lot about their flexibility.