From Lucy Lazarony, Next Avenue
Company lays off or lays off about 1.5 million every month people, shocking family funds of those affected – especially if the funds include college plans for a son or daughter.
However, students and their parents should not helpless. Here’s a better have a look at how a layoff could affect college plans, in addition to suggestions for the way families might address the changes.
Call the financial aid department at your child’s college and explain that you’ve been laid off and are experiencing a dramatic drop in income. Do this as quickly as possible. Family income influences the financial support available to your child. If your income has dropped significantly, you or your child could also be eligible for more aid.
Notify the faculty immediately
“It’s a good idea to contact the financial aid department of your child’s current or target school (if an offer of admission has been received) and let them know what changes have occurred, as parental income is an important factor in financial aid considerations.” says Patricia Roberts, Chief Operating Officer at GiftofCollege.com. She lives in New York City.
Here’s what you may expect when using your child’s financial aid for school after a layoff from work.
“Students should call their college’s financial aid office and discuss the school’s established criteria for changing financial aid,” says Rachel Coleman, an independent education consultant at College Essay Editor. “These criteria are published on the Financial Aid Office website and typically include circumstances that might alter a family’s financial situation, comparable to unexpected medical expenses, the lack of a job by a parent, or the addition of a brand new relative to the family. “
“But there is always wiggle room!” Coleman adds. “That’s why it’s worth discussing a student’s financial situation directly with the financial aid officer. Once the student has had this conversation, he or she may submit a ‘Financial Aid Appeal Application’ along with the documentation requested of them by the Financial Aid Officer.”
Submit financial documents
What kind of financial documentation does an auxiliary officer need? Here is an example from their website Occidental College in Los Angeles:
- Copy of federal tax return and W-2 return for the present calendar 12 months.
- Estimate of total expected income for the present calendar 12 months, including expected unemployment advantages (if applicable).
- Copy of the signed letter on company letterhead indicating the explanation for the layoff, termination or leave of absence, the last date of employment, and any severance, bonus, vacation or other payouts.
- Copy of unemployment profit certificate (if applicable) showing the total amount of profit entitlement and the beginning date of profit.
- Copy of essentially the most recent dated pay stub (if applicable) prior to the layoff, furlough, termination or reduction in hours, showing the present 12 months and the worker’s name.
Your situation is just not unusual
Once the financial aid department has the obligatory documentation, they will begin reevaluating your child’s financial aid package.
“Colleges have experience with situational changes,” says Steven Kibbel, a licensed financial planner at DayTradingZ in Franklin, Tennessee. You can reevaluate your funds and potentially increase your aid package, whether through more grants, scholarships, or lower rates of interest Federal loans.
It can also be a promising idea to explore other sources of support on your family.
“Every dollar counts when money is tight,” says Kibbel, “so also look for private scholarships or help from nonprofit organizations that help families who have lost their source of income. Fastweb.com is a great scholarship search engine that I recommend to clients.”
Consider colleges with lower costs
If your child is applying to school, review the financial aid options available and in addition consider colleges with lower costs, comparable to: B. state universities or community colleges. These lower-cost options could also be a superb strategy until your loved ones’s funds stabilize. Living and dealing at home are other ways your child may help cover college costs.
“Although this may not be what they had planned, your child can always start at a cheaper school and later transfer to their desired institution, or live at home for all or part of their studies, or even defer it.” Work when money plays a giant role,” says Roberts. “Remember that there is no one-size-fits-all path to a successful and rewarding educational experience and career.”
Make college savings plans easier
If your income has been reduced, there may not be enough to proceed making contributions to your child’s college savings plan, comparable to: 529 plan. Do not worry. You can at all times start making savings after finding a brand new job.
“For those with younger children,” says Roberts, “it could be understandably disappointing to not have the opportunity to contribute to their 529 plan accounts as before, but allow yourself some patience and accept that chances are you’ll must take a break, when you do that.” Get back in your feet.
Don’t forget the cash you’ve got already invested in a 529 plan. This can proceed to achieve value even when you delay recent contributions.
Consider your loved ones’s help
“During this stressful time, take a moment to pat yourself on the back for opening and funding the 529 accounts to the extent that you have,” says Roberts, “and feel good about that the money you previously deposited will remain invested and likely increase in value.”
This may be a superb time to achieve this Ask family and friends to contribute to a toddler’s 529 plan.
“You don’t have to do it alone. If you haven’t already, this may be a good time to make friends and extended family aware of the opportunity to contribute on birthdays, holidays and other special occasions, says Roberts. “It’s a tradition that you won’t regret creating and that givers can really feel good about.”
