Each year, numerous regions are affected by Mother Nature's unpredictable ways. Tornadoes, massive storms and hurricanes all rain down on us (no pun intended). Such a situation is difficult to deal with, much less bounce back from, but somehow people manage to do it. Last year, Hurricane Sandy rocked the East Coast, causing devastation for many. The same way people have done before them, New Jersey residents and New Yorkers picked up the pieces and are beginning to recover. Reading this, you could be thinking, "Well yeah, that's horrible and it's all true, but what does it have to do with financial aid? I am on the correct blog, right?" Yes, you are, and you'd be surprised how much a hurricane could impact financial aid potential for young students. Let's talk about that in more depth.
The fact of the matter is that families are still receiving settlements to recover what Sandy took. If you've learned enough about financial aid, the pieces should fall into place pretty easily here. Financial aid forms, such as the FAFSA and CSS Profile, gather thorough data on students and their families to make a fair estimate of what should be given out in financial aid each year. This info includes family income and assets. The issue with receiving a settlement and filing for aid is that a settlement check may very well hurt your aid potential. It certainly doesn't seem fair, but from a financial standpoint, that check is part of you family's assets. This would create the illusion that an otherwise needy family is unworthy for maximum aid. Additionally, such victims and settlement recipients are put in the tough position of having to wait to deal with taxes until they know what their gains and losses are, meaning that affected students wouldn't necessarily be able to get onboard the "first come, first served" financial aid train, which usually yields higher aid amounts.
Luckily, with the right people on your side, the situation can be managed. In some cases, a school's financial aid officers and professional financial aid consultants can mediate the issue. Essentially, these people will assist in making adjustments to financial aid estimates, based on how a disaster like Sandy has affected the home and bank account. Colleges recognize that special circumstances exist, and given that they are there to educate young people, they want to make it financially possible for everyone.
Families do have to explain where a windfall of money like a Sandy settlement came from and that funds will be put towards repairing the home, but that's a small price compared to being knocked out of the running for aid altogether. This is a detailed process to go through, but totally worthwhile for the sake of the student. Families should have a serious discussion with financial aid professionals or at least write a detailed letter explaining the expenses resulting from the storm--i.e. new furniture, clothes, etc.--and the emotional toll it has taken on the family. Providing this information is important, as most schools are compassionate and recognize the difficulty of the circumstance. They could help you out.
Outside of the financial aid system itself, families could help their cause by keeping assets and income separate from Sandy relief funds. Using different bank accounts helps the families and financial entities distinguish what money is used for which purposes, making everything a tad less complicated to everyone concerned.
In any case, families shouldn't sit on their hands with processing taxes. If we know one thing, it's that getting a jump on taxes and financial aid paperwork makes for more aid money. If Sandy settlement money is in your account, you'll have to list it on the FAFSA, but taking the abovementioned steps to explain the funds will help. As a bonus: such money isn't considered to be income and won't be taxed, so there's no need to worry about it.
Don't let a disaster that was out of your hands get in the way of gaining a valuable education for you or a loved one. A tragedy like Sandy is just that, but by taking the right steps, it will not hold you back! For all things financial aid, including solutions to various dilemmas, turn to Go Financial Aid for sound information.