Dear Penny: Will My Husband’s Retirement Ruin Our Daughter’s College Plans?

A college student looks bummed out while leaning against her bedroom in her dorm room.
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Dear Penny,

My husband and I have an age gap of 15 years between us. We have an 18-year-old daughter getting ready to head off to college come September 2022. 

My husband will be 63 in that same month and was hoping to retire at 65 like the rest of his siblings, but we just won’t be able to afford the expected family contribution (EFC) dictated by the FAFSA if he stops working before she graduates in four years. 

This has caused many arguments between us. He is adamant he will not work beyond 65. What advice do you have for us?


Dear A.,

For what it’s worth, I agree that your husband is being unreasonable. When you have children later than your peers, that often means you have to work longer. The federal financial aid system expects parents to contribute to their child’s college education. Of course, what I think isn’t going to matter to your husband, though.

Since you’re at an impasse, your daughter needs to plan for the worst. Under no circumstances should she choose a college and then hope her dad has a change of heart in the next two years. She should make college plans assuming your family’s income will drop significantly around the halfway mark.

Dear Penny

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What isn’t an option — and this is important because misinformation abounds on this topic — is for your daughter to secure more financial aid by establishing herself as an independent student. Independent student status is only available in limited circumstances, like if you’re at least 24, you’re married or have children, or you were an emancipated minor.

A student won’t be considered independent just because their parents don’t claim them as a dependent on their tax returns or the student is self-supporting. So ignore anyone who tells you that there’s a simple way for you, as parents, to avoid paying for part of your daughter’s college.

The good news is that the expected family contribution (EFC) you saw after submitting the FAFSA isn’t necessarily the amount you’re expected to pay out of pocket for your daughter’s college. So try not to get sticker shock.

“This number is just an index that we use to determine if a family is eligible for Pell grants, subsidized loans and other need-based forms of financial aid,” said Joshua North, director of financial aid at Bridgewater College in Bridgewater, Virginia. “Don’t let that number influence a student’s decision whether to attend college.” (In fact, starting with the 2023-24 academic year, the Department of Education will replace the term “expected family contribution” with the more accurate “student aid index.”)

FAFSA has a two-year lookback period. So for the 2024-2025 academic year, which coincides with your husband’s planned retirement date, your daughter’s financial aid would be based on your 2022 income. Obviously, a lot can happen in two years. That’s why the Department of Education allows a process called professional judgment. Basically, school administrators can adjust FAFSA information on a case-by-case basis to reflect major life changes, like retirement or a job loss, provided that you have supporting documentation.

“Life events, such as unemployment/retirement, will be handled differently by every school,” North said. “Some schools may not even offer professional judgments, so your mileage may vary based on the school you are applying to.”

Since you know your husband plans to retire in two years, you need to contact the financial aid office of any school your daughter wants to attend before she decides on a college. And when I say “you,” I mean both you and your husband. He should be part of finding solutions here. If your daughter’s school of choice doesn’t offer professional judgments or has limited options for adjusting financial aid, she needs to look at Plan B. You also need to be clear with your daughter about what you can afford.

Once your daughter has chosen her college, make sure you submit the FAFSA as soon as possible every year. “The FAFSA is available on Oct. 1 every year, but financial aid awarding cycles may vary from college to college,” North said. “By starting the process early, you are giving yourself plenty of time to provide documentation and resolve any issues that may arise during the financial aid process.”

It’s also not the end of the world if your daughter has to take on some student loan debt. The general rule of thumb is that you don’t want to take out more than your expected annual starting salary. This may be quite doable, particularly if your daughter only needs loans for two years of school vs. four.

Meanwhile, since you and your husband know your income will drop when he retires, you could try living on your retirement budget for the next two years. Set aside the excess now so that you have funds to dip into for your daughter’s last two years of college. Your daughter can also contribute by working part time.

Your husband’s retirement will certainly complicate your daughter’s plans, but she should have options that won’t require her to graduate with six figures of debt.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].