<p>Hi there,</p>
<p>Just curious in regards to reporting the amount of money you have or your parent's have in their checking account when filling in the FAFSA.</p>
<p>In regards to parent's bank account, the amount you put is as of the day you fill in the fafsa right? So my question is, what happens if after you have submitted FAFSA, you somehow receive a large amount of cash to deposit in your bank account a few months later? </p>
<p>For example, you filled in FAFSA and submitted it in March and listed $10,000 (which was true) in parent's bank account. What if a few months later like in July your parent's sell their car or something of value for like 15,000 and deposit that into their bank account? So now, it would be more than $10,000 in the account. Do you report these changes or does anything need to be done? Does fafsa do random checks on bank accounts throughout the year?</p>
<p>Any feedback is much appreciated.
Thanks</p>
<p>No you don’t need to report the increase; as long as the values that you entered are the values of the accounts on the filing date of FAFSA.</p>
<p>Your assets for FAFSA are reported as of that day as a snap shot Doesn’t matter if they are in the bank, in your pocket, in a shoebox under your bed. Doesn’t matter what was in the account the day before or the day after. That’s why you pick your day V-E-R-Y carefully. Too bad if money was in there because the check for $10K you wrote for the roof repair, had not yet cleared. Good for you, if you won the lottery and got the check the next day. </p>
<p>What can happen is that you can be audited after verification, in which case, a request of all bank and other statements will be requested. Remember, access to your taxes is there so any accounts you have with interest/ divs, etc and other trails can be easily followed. Depending upon the extent and intent of the audit, states before and after that day could also be requested to make sure no games are not being played. </p>
<p>Bear in mind that FAFSA is a federal form, so federal penalties can apply for fraud, not to mention losing ones aid. </p>
<p>But, the answer to your direct question is that the assets need to be reported as of that day, not before or afterwards. It would be crazy to half to report and track fluctuations. THe system wants a balance on that one day.</p>
<p>Thank you for your quick responses! Definitely makes a lot of sense now as I was just curious about the whole process. </p>
<p>In regards to your statement and that they take a snap shot as of the moment you click submit, isn’t it unfair if someone does happen to win the lotto the very next day and it wouldn’t affect their application because it was after you submitted. </p>
<p>Also, you mentioned being Audited AFTER verification? How would that work or what happens then if your bank account amount will obviously be different than the exact day you submitted your fafsa in the first place?</p>
<p>So, they can request you to give them your bank account information again even after they already selected you for Verification and submitted all the documents they requested for Verification (and using the IRS data tool retreiver)?</p>
<p>FYI, I’m not planning to or will commit any fraud. Just wanted a clear answer as to what if your bank account fluctuates if you receive a large amount of money after you submit.</p>
<p>thanks again! </p>
<p>I’m not worried about the unfairness of someone getting a big fat lotto check the next day. I’m more concerned, about those who fill out the form without knowing all of these things, and use a balance that is inflated due to an earmarked payment. Or a student who has a big fat check in there of what he saved, when 20% of it is going right onto the EFC when if had paid bank his parents for the year’s living expenses, and they put it into a joint account with parent’s name and SSN first, it would only be hit, at most, by FAFSA at 5.6% Even more draconian are some of the PROFILE schools with this. It pays to know how it works.</p>
<p>Verification just pretty much means checking the numbers against IRS returns which are not going to show asset balances. But if info on your return showing investment income don’t jive with assets or any other flag, or just a random lucky pick for getting audited, would mean a request for you to come up with statements as of that day. Banks and other such institutions can do that. You can get day end balance. If the asset is a super thorough one, all kinds of things can be requested, just like when you get an IRS audit. Federal government. </p>
<p>Though a lot of people get verified, and there may be additional requests for info, I only know of one thorough audit. So yes, you are filling out a federal form requesting eligibility for federal funds, so the feds do reserve the right to check out the info anyone so provides. </p>
<p>I disagree that you should not reduce the money in the account by the outstanding checks. Once you write that check or pay a bill online, that money is no longer yours, not available for college. It’s spent. If you report that your balance is $10,000 and you wrote a check the day before for $9000, that money can’t be spent again.</p>
<p>If questioned, you could show that you had outstanding items. I agree it is best to pick a sweet spot, like a day before pay day but when all bills from the previous cycle have been presented, but we don’t have control over our creditors and when they will present item for payment. I pay my rent anywhere from the 1st to 4th, and then it sometimes takes until the 10th to clear. Sometimes it clears the 2nd of the month. </p>
<p>But OP, no, you don’t have to update that information on FAFSA.</p>
<p>Thanks again for your replies.</p>
<p>Another thing if I may ask…regarding family owned businesses. So FAFSA doesn’t require you to report your small business if it’s family owned and less than a certain amount of employees and some other requirements i forget etc.</p>
<p>So if you do meet the requirements to not have to report this, does this also mean that money in the business bank account (assets) doesn’t need to be reported right? Any income/revenue from the business that would be cash would be stated on my own federal tax return anyway (the small business is a partnership) so you’re not really hiding anything correct?</p>
<p>Twoinanddone, the problem is that a line has been drawn that is definite. A check could well have been written the day before, two days before, or after, and get cashed a day later, a week later, or just not get cashed–got lost. All kinds of scenarios. So to make it VERY simple, the line is drawn as the balance as of that day. Not the day before, not the day after or two days later or a week later. If there is an earmarked balance for something like a medical expense that upcoming, a professional judgement is supposed to be requested for it, and likely granted, but otherwise it’s the balance as of that day. YOU have the responsibility and the option to monitor your balance day to day and pick a low point. Your problem if you don’t do that. </p>