Financial Aid Changes After Job Loss

Q: If a parent has lost their job, but their child has already been awarded a financial aid package from the college, is there any way to see if the college would award more money based on the parent’s new financial circumstances?

A: Yes, it is absolutely possible for a college to adjust its financial aid package if a parent’s financial circumstances change, such as a job loss. This process is known as a financial aid appeal, and it can be a valuable way to ensure that the school’s financial aid offer reflects the family’s current financial situation.

The first step is to reach out directly to the school’s Financial Aid Office. Colleges understand that life events, like a parent losing their job, can significantly impact a family’s ability to pay for college. In such cases, schools may be willing to reassess a student’s financial aid eligibility based on these new circumstances.

1. Special Circumstance Appeal

When a family experiences a significant financial change, such as job loss, they may qualify for what is called a Special Circumstance Appeal. This is a request for the school to reconsider the student’s financial aid package based on extenuating circumstances. Financial aid administrators are usually flexible in considering appeals, particularly when it involves substantial changes in income that were not reflected in the FAFSA or the original financial aid package.

To get started, you will need to write a formal letter explaining your situation. Here are some key things to include in your letter:

• Explain the Situation: Be clear and honest about the job loss, and how it has affected your family’s income. Make sure to mention that this change wasn’t accounted for in the original FAFSA application.
• Include Documentation: If possible, include supporting documents such as proof of unemployment benefits, a letter from the parent’s former employer, or any other paperwork that verifies the change in financial circumstances.
• Be Polite and Professional: It’s important to maintain a polite, respectful tone in your letter. Financial aid administrators have the final say in awarding financial aid, so being courteous can help create a positive dialogue.

Tip: Keep in mind that each school has its own process for special circumstance appeals. Some may require specific forms, while others may handle the request through a simple written letter. Always check with the financial aid office to understand their procedure.

2. Understanding the Review Process

Once you submit your appeal, the school’s financial aid office will review your case. They will assess whether the job loss or change in financial circumstances has a substantial impact on the family’s ability to contribute to the student’s education. The school may request additional documentation to support the claim or ask for further clarification on the family’s financial situation.

Depending on the outcome, the school may adjust the student’s financial aid package. This could involve offering additional federal or institutional aid, increasing the amount of need-based grants or scholarships, or providing additional loan options. However, keep in mind that not all appeals are successful, and the amount of aid the school is able to offer will depend on the availability of funds and the school’s specific policies.

3. Timing is Key

Timing is critical when submitting a financial aid appeal. Ideally, you should reach out to the financial aid office as soon as possible after the job loss. Many schools have deadlines for submitting appeals, and it’s important to get your request in before those deadlines pass. The earlier you act, the more likely it is that the school can make adjustments to your financial aid package before you need to make your final payment.

Important Note: Be sure to also update your FAFSA to reflect any changes in your family’s financial situation. Even if your appeal is approved, the financial aid office will still need to have the most accurate information on file to process your aid properly.

4. What If My Appeal is Denied?

If your appeal is denied, it may not be the end of the road. Some schools offer a second review process where they reconsider the appeal under different circumstances or with additional documentation. However, if the appeal is not successful, it’s still worth exploring other options like scholarships, private loans, or even talking to your school’s financial aid office to find out if there are any other aid programs you might qualify for.

In some cases, a student’s eligibility for financial aid may change year-to-year, so it’s important to regularly update your financial aid applications and stay in touch with the financial aid office if your financial situation changes.

5. Exploring Other Resources

In addition to submitting a financial aid appeal, there are other resources you can explore to help cover college costs. Some possibilities include:

• External Scholarships: Many organizations offer scholarships that are not tied to FAFSA or the school’s financial aid office. Be proactive in searching for scholarships that may be available to you.
• Private Loans: While not always the preferred option, private student loans can help fill any gaps in financial aid if necessary. Compare interest rates and loan terms to ensure you are getting the best deal.
• Work-Study Opportunities: Some schools offer additional work-study programs that may be available to help students with financial need. These jobs can provide extra income while you are in school.

Final Tip: If your parent has lost their job and you’re looking to increase your financial aid, always approach the situation as soon as possible. The sooner you communicate your new financial circumstances, the better chance you have of securing additional funding.

There is always a possibility for a school to reconsider your financial aid package based on a significant life change like a job loss. The key is to reach out to the financial aid office early, provide thorough documentation of the changes, and be prepared for the possibility of an appeal. Although there’s no guarantee that additional aid will be granted, many schools are willing to work with families who are experiencing financial hardship, especially if the situation is temporary and well-documented.