Ex-wife is custodial parent and it appears she is committing FAFSA fraud by hiding assets

My ex-wife is the custodial parent as far as FAFSA goes, so I don’t see of my daughter’s FAFSA info other than what she tell me. I do know that her EFC is < $2000. Since our divorce agreement requires us to exchange tax returns for child support calculation purposes, I know my ex-wife made $3000+ of interest from a savings account. This confirms what my daughter told me, that her mother has/had a 6 figure balance in a regular savings account. I suspect she moved all this money into her boyfriend’s account to keep the EFC low. My daughter is a junior in college and has qualified for financial aid every year because of a low EFC.

What’s going to happen if my ex-wife gets caught committing FAFSA fraud? In particular, will my ex-wife get penalized or will my daughter have to pay anything back? I don’t want my daughter getting screwed over because her mom is falsifying FAFSA info.

And do I just cross my fingers and hope nothing happens? It’s stressing me out.

@kevin303 , “appears” is not good enough here. Unless you have indisputable proof of fraud (you have seen the FAFSA report with your own eyes) AND you are personally willing to pay the difference in what you daughter would lose in FinAid, I think you should do as you said in the last paragraph: “cross my fingers and hope nothing happens.”

Remember, if you report your wife and you are correct and your daughter loses some or all of her FinAid, your daughter may have to pay more money immediately to remain in classes this semester and may have to stop her college education if she cannot pay more.

Whatever reasons you think you may have for reporting your possibly erroneous assumptions, consider the significant harm that may happen to your daughter if your try to get your ex-wife in trouble. Stay out of it and let the custodial parent worry about how the FAFSA is filled out. Like it or not, the FAFSA is the custodial parent’s business and not yours.

Lastly, imagine how your daughter would feel about this if you were the reason she had to discontinue her college education/experience.

Good points. Yeah, had considered reporting my ex-wife since she’s doing absolutely nothing to support our daughter in college even though she has the means. But have ruled that out since I don’t want to open that can of worms and impact my daughter.

I will be helping my daughter for her senior year, since I didn’t want her to have to report money from me on FAFSA since I’m the non-custodial parent.

Why would the $3k of interest be on your wife’s tax return if the money is in her boyfriend’s account?
Probably more information is missing. If you want to go after the ex I’d recommend passing small costs onto her. For example, have her buy your child a year’s worth of mobile phone service on Mint Mobile. Then have other monthly subscriptions moved to the ex (Netflix, Amazon student, etc). Thirdly, get the ex to research low cost school books for next semester. Lots of opportunities to share costs when a collage of college expenses are taking place.

From what I understand from my daughter and suspect, the money was in my ex-wife’s account and then she moved it into her boyfriend’s account right before filling out FAFSA.

Kevin… let it go. Nothing good can come from you acting on your suspicions.

had considered reporting my ex-wife <<<<<<<<

Ugh.

If she “gifted” the money to her boyfriend, or used it for something like paying off their house or his car, that’s not illegal or fraud.

If he chooses to not pay it back to her after D graduates, that’s also not fraud, because it had to be a legitimate gift to be on the up and up. That risk is on her, not you.

@kevin303 Moving the money to her boyfriend is perfectly legal.

If she made a bona fide gift of the money to her boyfriend without expecting anything in return or expecting to have the money returned to her at a future time, yes.

If she moved the money to an account in her boyfriend’s name but still considers it to be her money available for her use at her sole discretion, no (at least as far as financial aid reporting is concerned).

Either way, Kevin needs to let it go.

@kevin303

Please let your daughter graduate from college without the angst of this issue hanging over her head…or yours.

Frankly, it sounds like you would stick it to you ex wife if you didn’t think it would affect your daughter.

My opinion…you need to forget about this. You are getting second and third hand information about the whereabouts of this money…the tax return information and the like.

Just stop.

If the custodial parent income generates a <$2000 EFC, it’s possible this student qualifies for the simplified needs test whereby assets wouldn’t be counted anyway.

As long as she filed a Form 709 with the IRS, if it’s “a 6 figure balance”

Correct, if “moving the money” is another way of saying “gifting the money.”

@kevin303 ,

What do you want to happen? The net-net is that you can’t “stick it” to your ex, without sacrificing your daughter as collateral damage. Is it really going to be worth it to you?

Keep in mind that your Daughter also signs the FAFSA where she attest the information is true.

** Do not even think** about doing this after she graduates, because willful misrepresentation (even on financial aid forms ) would be grounds for having her degree rescinded, leaving her with a worthless piece of paper and being a non-grad).

Nowhere in the man’s original post did he say he was going to report his ex-wife. He said he was worried what would happen if she was commiting fraud and got caught. Immediately people jumped to the conclusion that he was going to report her.

He later said later he had thought about it but didn’t want to open that can if worms.

Obviously considering the consequences if there is fraud he is worried about his daughter. Seems like a legitimate question to me. He now knows if it is fraud and it is found out that his daughter could get screwed. I think that’s worth worrying a little about.

Just my two cents.

I’m disappointed that your daughter is involved in this at all.

Once more…

If your daughter’s EFC per FAFSA was <$2000, it is very possible that your former wife’s income is below $49,999. Is that possible? If so, it’s possible she qualified for the simplified needs test, and assets would NOT be reported…at all…even if they are millions of dollars.

Yeah. I was going to bring up Simplified Needs as well. None of our assets are counted due to having an AGI under 50K.

I would just leave it alone.

Thanks for all the input. My ex makes a little over $62K. I don’t know all the facts like some have mentioned. So I don’t know if it was really fraud or not. And like I said, I “had” thought about reporting her previously but have no plans to do that and was interested in what could happen if she has committed fraud and got caught and what impact that could have on my daughter.

Is the 62K gross though? My AGI is about 25K less than gross due to payroll pre-tax deductions.