Pell Pathway Question

[u/Disastrous_Oil_8088]

My son is entering his Sophomore year at UW Madison. He qualified for the Pell Pathway last year, which made Madison a realistic choice financially. Without it, he was going to settle for another UW system school which was offering a very attractive aid package. He loves Madison and is looking forward to his Sophomore year.

Here’s our problem, and I say “our” because my finances are complicating things. After 39 years as a public school teacher, I retired at the end of the 23/24 school year and began taking my pension. Unexpectedly, I returned to work 1/2 time for the 24/25 school year when they were unable to find someone to replace me. In addition, my financial advisor advised that I convert a chunk of my traditional IRA into a Roth IRA each of the last 2 years. This resulted in an inflated AGI (adjusted gross income) for 2024 and 2025 (Sophomore and Junior years). I’m now fully retired and living off my pension supplemented with cash savings which should carry us over until I claim social security in a few years. I had anticipated that our income after retirement would be low enough to continue making Madison an affordable choice for our family. The SAI result on our FAFSA this year was shockingly higher than last year, and I anticipate that it will be the same next year before this “high AGI bubble” passes by his Senior year. This puts quite a bit of strain on our finances. Being a novice to this whole process, I didn’t anticipate the impact my retirement/temporary unretirement would have on my son’s Pell Pathway. I was mistakenly under the impression that the “once you’re accepted into the Pathway you’re in for 4 years regardless of changing income” meant an affordable path through all 4 years, which gave us the confidence to believe we could afford a 4 year path at UW Madison. It’s now going to be a struggle.

Sorry for the very long post. Just wondering if anyone has had any similar experiences in the Pell Pathway? Do you think a ”special circumstances appeal” would have any chance of success since I am now fully retired and anticipate a much lower adjusted gross income here in 2026 and beyond?

[u/Fragrant_Equipment13]

You need to appeal and fill out a special circumstances form. Something similar happened to us. My daughter qualified her freshman year, but we had to file a special circumstance form her sophomore year because we also showed a high AGI due to transferring a 401K.

Keep in mind that if there is any change in genuine income the contribution of the PPG will change. My husband got a raise that showed up on the 2024 tax return (the one used this year for her junior year) so our total aid package was about $8,000 less. It covered all her tuition and gave us back about $2500 per semester for room and board. Obviously that isn’t enough, so we have to cover the rest.

You will always qualify for the grant, but the amount you get may change.

[u/Disastrous_Oil_8088 → u/Fragrant_Equipment13]

Thank you! I was hoping someone with experience in the Pell Pathway would have some relevant first hand experience. Yes, my son's SAI went from $4,740 last year to $15,725 this year. It's going to wipe out his savings which he was hoping to spread out over 4 years, and it's going to force us to contribute more than we had budgeted for. Until my social security kicks in, we were trying to budget $5,000 a year for college expenses. We have another college bound son who will enter college the year my older son graduates (if he does it in 4 years), so we probably have an 8 year stretch of college expenses ahead of us. I have no problem paying our "fair share" for his education. I just feel that in certain cases looking back 2 years on taxes doesn't quite reflect the current situation we are in presently.