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Help a Reader: FAFSA Questions and Answers (Part 2)

I get a number of questions/emails from readers and I respond to every one of them. The following represent a sampling of FAFSA questions received over the past couple of months. Hope this helps…

Continued from Part 1

Question 7: My husband is 40% owner in a small family farming business which is actively participating in the growing, harvesting, packing & shipping of onions.  Their business is incorporated.  Our 2010 income, between the W2 & K form, looks as if it was quite high since we had to show 40% of the total income of the company as our own income.  However, we did not pocket all of that money.  My husband & his partner take a set salary each month.  The amount above and beyond his normal salary remains in the company.  Because of the incorporation, it looks as if my husband earned 40% of a rather large amount of money in 2010.  But the reality is, the majority of it never entered our hands.  How do we fill out the income portion of the FAFSA?  Is the amount beyond our actual W2 income amount considered a deductible amount since it actually isn’t part of our personal gross income? And how would we figure out what our adjusted family gross income would be?

Answer 7: Unfortunately, you will have to report the income from the farm when you are filling out your FAFSA.There really is no way around it. However, you can always follow up (appeal) with each of the financial aid offices and, utilizing a process called “professional judgment”, they may make some sort of concession and adjust your FAFSA results (EFC) on the back end.  Unfortunately though, 90% of the situations like yours usually don’t get an adjustment.. But it never hurts to ask right?

Question 8:
My wife and I divorced in 2008 – she makes more money and is now remarried.  Household income could be $250,000.00.  I make $85,000.00 and do have my girls more than she.

Do I simply put in my income, and that amount will be split? (it was $20,000.00 for the 2010/2011 academic year and I paid $10,000.00).  Shouldn’t she have to pay more?  We used my income for the EFC this year.  Does the govt. look at both incomes?  Both household incomes?  I am unlikely to remarry, thus am a single income dad, but feel this is not fair to me.

Answer 8: The FAFSA would only require your income if you are the parent that provides more support for the girls. Your ex-wife would not be required to complete the FAFSA. And since her household income is greater, that is probably a good thing when calculating the EFC.

As far as each of you paying your fair share of the tuition expense… the government doesn’t care much about that and doesn’t dictate that through the FAFSA process or through the college. The only entity that can enforce that is the court system and usually it is done at the time of the divorce and drafted in the paperwork who is responsible for what. So.. your only recourse is to go back to the judge and see about a different dollar amount being allocated based upon household income. Your other option is to withhold a portion or all of your payment but that puts a lot of undue stress on your student and it also puts you into contempt of court if your are supposed to being paying half per the divorce decree.

Question 9: Just sitting here being curious about an expected 2011 FAFSA response to my situation. For next school year I will have one in college, rather than two. I lost my $69,000/yr job last July and have been on unemployment only since October (after my severance ran out). All the jobs I have looked at and interviewed for pay about $20,000 less than I was making (and there is no other income to include from a parent).  I already was able to fill out special circumstance forms for the two schools for the Spring semester and both kids are eligible for a little more grant or loan money.  If I can file the FAFSA very early, is there a chance I will have a response so the schools can estimate a bill for next fall to help with Plus or Student Loan applications(or to even adjust the remaining 2010-11 yr payment more if I am not yet employed and am still on unemployment only in January or February?)

Answer 9: Yes.. The earlier you file your FAFSA the sooner the schools will have an estimated financial aid package put together for you. However, most schools will not be setting costs for next year until February and March (early spring) so you will not be able to get a full picture of your net expense until that time.

You probably won’t experience any further adjustment for the 2010-2011 academic year. But, if your situation persists, you may be able to file special circumstance paperwork along with your 2011-2012 FAFSA to help paint a more accurate picture of your financial situation for the coming academic year. It still may be worth dropping a line to each of the Financial Aid Offices to see if they can provide any more help. Each school is different and you may be surprised (in a positive way) of their response.

Question 10: I am 43 and returning to school to complete my undergraduate degree now being faced with divorce.  I have a son in college OOS on a full academic scholarship (not related to FAFSA).  I completed a FAFSA for the Spring session and qualified for a total of $3,300.00 of aid based on the information provided.  I understand that only half of this can be used in the Spring.  It is enough for community college, but not a university tuition.  This was based on filing married and using my spouse’s income.  I do not work.  We can file for divorce at any time and will need to before he leaves the country in January.  Will this increase my chances of obtaining financial aid?  I don’t know if my high school age daughter and I will be forced to move in with my mom, but other than the items in the house that we can sell, he will not be providing any support for either of us.  I need to finish my education, but obviously will not have the means to do so without assistance at this point.  Do you advise filing before January 1st?  If so, how much do you think this will help with my financial aid?

Answer 10: If you are planning on a divorce, you will want to legally have your divorce finalized prior to filing for your FAFSA. You can file the divorce at anytime but you just need to make sure that you don’t file your FAFSA until after the divorce is finalized. When you complete the FAFSA it reflects all your information as of the day that you file the FAFSA. So, you can finalize your divorce on a Monday and file your FAFSA on Tuesday with a single status.

Without delving into a number of questions, I am uncertain to how much ($$$) your single status will help your financial aid situation. However, I can tell you that it should impact it in a positive manner.

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