A special thanks to Chuck Moore from the College Literacy Academy for providing this important update.

Updated Rules for Appealing for Financial Aid

The US Department of Education just issued a new “Dear Colleague Letter”, which in financial aid industry jargon is usually a regulatory change or a change in how regula­tions and laws are supposed to be interpreted. In the April 2, 2009 Dear Colleague Letter, the Department of Educa­tion has offered additional flexibility to financial aid admin­istrators.

Financial aid administrators are now permitted to use a 12-month window for projected future earnings and base family income, a departure from the traditional calendar year/ tax year.

Example: if you lose your job in November of 2008, for financial aid appeal purposes, instead of the financial aid office using calendar year 2008 for determining your aid eligibility, they are now permitted to use December 2008-November 2009 projected earnings as the basis of how much aid you’re eligible for.

Why this is important: given the current economy, peo­ple are out of work and remaining out of work longer than average; some families are using up their entire unem­ployment insurance allotment, which is half a year. Being able to use a drastically reduced income estimate will qualify more students for aid and assistance.

Financial aid administrators were also urged by the De­partment to steer students away from private loans unless all other federal financial aid options were exhausted, and to do more aggressive outreach to families to let them know that they can appeal for additional aid and at the very least can help connect more families to the federal Stafford loan if they’re not already taking advantage of it.

To read the full letter click the link below.

http://www.ifap.ed.gov/dpcletters/GEN0904.html

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