The family income information required by the Free Application for Federal Student Aid (FAFSA) is usually about two years old by the time you complete the FAFSA. There are times in the interim that a family’s finances may change negatively and significantly.
The Office of Financial Aid at Transylvania calls an adjustment to the FAFSA as a result of changed circumstances a FAFSA Recalculation. This process may also be known as a financial aid appeal, special circumstances or professional judgment (PJ).
The following are special circumstances that may be considered in a FAFSA Recalculation request:
- Loss of income due to loss of employment, reduction of pay or the death of a parent or spouse. In cases of employment loss, a FAFSA Recalculation request cannot be considered until the individual has been unemployed for a period of time — generally at least 12 weeks.
- Divorce or separation following completion of the FAFSA. For divorce or separations that occurred prior to completing the FAFSA, please review this information to determine what parent information to include on the FAFSA.
- Non-recurring income, such as an early withdrawal from a retirement account or an insurance payout, reported on the FAFSA
- Extremely high medical or dental expenses paid out of pocket and not covered by medical or dental insurance during a single, recent year
- Impacted by a natural disaster
The following circumstances may not be considered:
- Circumstances described above when the information on the FAFSA has already resulted in a zero Expected Family Contribution (EFC)
- Loss of overtime or bonus income
- Fluctuations in self-employment or business income, although exceptions are being made in the case of businesses impacted by COVID-19 shutdowns
- Bankruptcy, foreclosure or collections costs associated with outstanding debts
- Consumer debt such as credit cards, car payments, mortgage and other loans
- Payments on back taxes owed to the IRS
- Lottery or gambling winnings or losses
Third-party documentation will be required
Any successful FAFSA Recalculation request will require documentation from third-party sources. Gathering and submitting this documentation with the initial recalculation request will both strengthen your request and expedite the process.
To document the loss of income, you may be asked to provide the final pay stub with year-to-date income, a letter of separation from the employer, a letter offering new employment (when documenting a reduction of income), a signed copy of the most recently completed tax return and/or most recent W-2s.
To document the death of a parent or spouse, you will need to provide a copy of the death certificate or obituary, as well as a copy of life insurance documentation, if insured. You may also be required to provide individual income information — such as W2s or recent pay stubs — for each parent whose information is included on the FAFSA.
In cases of recent divorce or separation, you should expect to provide a copy of legal separation papers, a copy of the divorce decree, a letter from your attorney and/or proof of separate residences. Additionally, a signed copy of the custodial parents’ most recent tax return if they filed a separate return or a signed copy of the most recently filed joint tax return and information fully supporting the attribution of income to each parent. This may include both parents’ W-2s, 1099s, any Schedule C filed with the return, etc.
When you are requesting that non-recurring income be excluded from the FAFSA, expect to include 1099 forms documenting the amount and type of income, as well as a signed statement describing how the non-recurring income was used by your family.
For extremely high out-of-pocket medical or dental expenses, you will need to provide copies of insurance explanation of benefits (EOB) documents or pharmacy receipts/reports for ALL amounts to be considered. As a rule of thumb, out-of-pocket medical or dental expenses paid in a single year in excess of about 10 percent of your adjusted gross income will be required to meet the threshold of “extremely high.”
A natural disaster might impact a family because of reduced income due to the inability to work for a period of time or because of high and unexpected expenses for damaged property repairs or replacement. See above for documentation of the loss of income, and plan to submit photographs of damage, receipts for repairs, disaster assistance or relief paperwork and/or insurance documents.
Possible outcomes of a completed FAFSA Recalculation request
The main purpose of a FAFSA Recalculation is to make a new determination of eligibility for need-based federal and state financial aid programs as a result of changed financial circumstances. A FAFSA Recalculation will not result in additional assistance from Transylvania. These are possible outcomes of a FAFSA Recalculation request.
- There may be a change to your Expected Family Contribution (EFC) that does not result in eligibility for any additional federal or state need-based financial aid.
- There may be an EFC change that allows us to allocate some of your Unsubsidized Federal Direct Student Loan to Subsidized Federal Direct Student Loan. This may result in less interest accrual on your student loan(s) while you are in school, but will not increase the total amount of your financial aid.
- There may be an EFC change that results in additional federal or state grant funds.
- There may be an EFC change that allows for both the reallocation of unsubsidized loan to subsidized loan and results in additional federal or state grant eligibility.
As we work with you throughout this process, we will try to alert you if we believe the first or second outcomes are most likely.
If you have been impacted by changed family finances caused by the COVID-19 national emergency or other difficult circumstances and you wish to begin the FAFSA Recalculation process, please choose the form that best describes your situation:
After reviewing your submission, Office of Financial Aid staff members will be happy to guide you through the remainder of this process.