Paying for College

How Will Financial Aid Officers Treat Pension Earnings?

Question: My son is a high school senior. I am employed this year and will also be employed his freshman year in college. But, by his sophomore year, I will be retired. Will the pension that I receive be looked at differently for financial aid purposes than the income I make while working? I don't mean the amount that I make but "how" that the money is generated. In other words, will the fact that it's a pension and not a salary work in our favor?

"The Dean" was in the throes of sending you some bad news in response to your question but wasn't 100% certain that it was right. So instead, I checked with my financial aid guru, Ann Playe (former associate director of admission and financial aid at Smith College.) She confirmed my suspicions, saying, "The 'how' is not relevant, which is why many who retire to equal income get a rude shock if they think they will get a break on college just by virtue of being retired."

As you're probably aware, even if you don't think you qualify for financial aid right now, you might want to fill out the FAFSA and apply anyway. If your income drops once you're receiving your pension, you may be eligible for aid then, even if you aren't currently. Many colleges have a waiting period (typically two years) during which students who applied as "no need" cannot seek aid. So, if you anticipate qualifying for aid once your pension kicks in, you should consider applying for it now, even if your EFC is high and you figure you won't get it, at least not for freshman year.

Hope that helps ... even if it's not what you wanted to hear.