How FAFSA Works

• The FAFSA asks parents and students to report their income from the calendar year prior to the school year. For example, if a student wants financial aid for the 2012 to 2013 school year, the family will report income earned during 2011 on the FAFSA filed in early 2012. Based on the income, assets, household size and other data on the FAFSA, the federal government formula calculates how much a family can afford to spend on college education that school year. The government and school then build a financial aid package to provide the rest of the money needed to attend school that year. However, if your income significantly decreases, you will probably not be able to afford the estimated family contribution that was based on last year's income.
  
  

Professional Judgment Review

• Financial aid officers are allowed to use their professional judgment to adjust financial aid awards in extreme circumstances. In most cases, drastic income reduction will qualify as an extreme circumstance because the initial financial aid award was based on the assumption that your income this year will be similar to what you reported on the FAFSA for last year. The school, not the federal government, completes the review, so the results will only be valid at that school. Families with multiple students in college will need to initiate a financial aid review for each student.
  
  

Documentation

• The financial aid office at the school will require documentation of your income reduction. You should be able to provide a letter from your employer documenting the job loss or income reduction. In addition, supply copies of the pay stubs for any jobs that members in your household are currently working, along with stubs for unemployment compensation checks, if you get those. The school can use your current income and projected income for the school year to calculate financial aid.
  
  

Results

• The financial aid office will notify you of changes in your financial aid package due to the professional judgment review. The review can apply to all types of financial aid, not only those awarded by the school. Therefore, you might get a Pell Grant from the federal government, subsidized Stafford loans and other federal aid, in addition to additional school grants. However, be aware that sometimes, a financial aid review will only result in more student loans, not additional grant money. It all depends on your ability to pay before and after the income reduction and whether you meet particular cutoffs for grant money.