Part 2: Answers to Readers' Questions on Financial Aid As students finalize their college choices before the May 1 deadline, we've once again opened our virtual Guidance Office to help families find the best fit for their budgets. Mark Kantrowitz, a financial aid expert and publisher of FastWeb.com and FinAid.org, is spending a week with The Choice to answer your questions about scholarships, loans and financial aid offers from colleges. His answers, which began Monday, are scheduled to continue throughout the week. If one is admitted as an early decision student, can the final financial offer that comes this month, after the preliminary estimate we received in December, be appealed or changed by a significant amount? If not, how does one go about asking for an in-depth explanation of how the award was calculated for my family? Who should call the financial aid office - the parent or the student? Jennifer Zhang Students who are admitted early decision may appeal the final financial aid offer, just as students admitted during regular admissions. Colleges use the same formulas and policies for packaging financial aid for both types of students. The process for handling appeals for more financial aid is also the same. Ask the college financial aid administrator for a professional judgment review and provide the financial aid administrator with a copy of documentation of any unusual financial circumstances. Unusual circumstances include anything that changed from last year, or anything that distinguishes the family's financial circumstances from other families. Examples include job loss, salary reduction, death of a wage-earner, high unreimbursed medical or dental expenses, private K-12 tuition for siblings and high dependent care expenses (e.g., for a special needs child or elderly parent). Families may appeal for more financial aid at any time, whether before receipt of the financial aid award letter, shortly afterward or even in the middle of the academic year. All early decision colleges will release the student from the obligation to attend if the family genuinely cannot afford the college costs even with the financial aid package. We have enough in savings set aside for my son to finish college after transferring to a four-year college. Nonetheless, I have been filling out the Fafsa just in case I am laid off or there is some other event of impact. For this year, even though the Fafsa was filled out, and even after we have already received financial aid notifications from all the schools in which my son was accepted (just loans, as expected), I got an e-mail asking that I include the income figures from the taxes filed for last year. Is that really necessary? Banty An applicant's Fafsa may be selected for verification after receipt of the financial aid award letter. Applicants must complete the verification process before financial aid funds, including student loans, can be disbursed. The U.S. Department of Education is transitioning to a more targeted verification process in which specific questions on the Fafsa will be selected for verification based on a risk model. There is no limit on the number of applications that can be selected for verification. Using the I.R.S. data retrieval tool reduces the chances of the applicant's Fafsa being selected for verification. If the I.R.S. data retrieval tool is used to complete or update the Fafsa, any questions that are based on unmodified I.R.S. data will not be selected for verification. This will save the applicant (and the college financial aid office) time and hassle. By the end of our daughter's first year of college, we will have used close to half of the funds set aside in her 529 plan, and will need to begin accessing other funds currently invested in mutual funds and stocks. When we liquidate some of those investments, we'll incur capital gains, which we're afraid will then be counted as income and increase our expected family contribution for the following year. Is there any way to communicate to the college that the reason we're liquidating these assets is simply to pay tuition? Capital gains are included in adjusted gross income (A.G.I.) and hence are treated as income on the Fafsa. This will increase the E.F.C. and affect eligibility for need-based financial aid. One could ask the college for a professional judgment review, arguing that the capital gains are a one-time event that is not reflective of ability to pay during the award year. However, most colleges will not make adjustments for capital gains, regardless of whether they are incurred to pay college bills or for other purposes, because of the discretionary nature of capital gains. This is why it is important to avoid realizing capital gains starting the tax year before the child enrolls in college. There are a few possible workarounds. One is to balance the capital gains with capital losses. This will also minimize the amount of taxes paid on the capital gains. Another workaround is to borrow from the federal student loan programs while the student is in school, wait until after the Fafsa is filed for the student's senior year in college, and sell the stocks and mutual funds to pay down the debt. Related: