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How Will Financial Aid Officers Treat Pension Earnings?

Written by Sally Rubenstone | Jan. 22, 2010

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.

Sally Rubenstone

Sally Rubenstone knows the competitive and often convoluted college admission process inside out: From the first time the topic of college comes up at the dinner table until the last duffel bag is unloaded on a dorm room floor. She is the co-author of Panicked Parents' Guide to College Admissions; The Transfer Student's Guide to Changing Colleges and The International Student's Guide to Going to College in America. Sally has appeared on NBC's Today program and has been quoted in countless publications, including The New York Times, The Washington Post, USA Weekend, USA Today, U.S. News & World Report, Newsweek, People and Seventeen. Sally has viewed the admissions world from many angles: As a Smith College admission counselor for 15 years, an independent college counselor serving students from a wide range of backgrounds and the author of College Confidential's "Ask the Dean" column. She also taught language arts, social studies, study skills and test preparation in 10 schools, including American international schools in London, Paris, Geneva, Athens and Tel Aviv. As senior advisor to College Confidential since 2002, Sally has helped hundreds of students and parents navigate the college admissions maze. In 2008, she co-founded College Karma, a private college consulting firm, with her College Confidential colleague Dave Berry, and she continues to serve as a College Confidential advisor. Sally and her husband, Chris Petrides, became first-time parents in 1997 at the ripe-old age of 45. So Sally was nearly an official senior citizen when her son Jack began the college selection process, and when she was finally able to practice what she had preached for more than three decades.