<p>My son's college made changes to his FAFSA that lowered the amount of financial aid he'll receive by a substantial amount. These are the changes the college made.</p>
<ol>
<li><p>Student's Grant and Scholarship Aid Reported in AGI (line 44d) - The college deleted the amount of taxable student aid he reported in his AGI and changed the amount to $0. Line 44d seems pretty self-explanatory to us, in that we thought he was supposed to report the taxable grant and scholarship money that was included in his Adjusted Gross Income from his tax return. Are we missing something? Wouldn't he be lying if he said he didn't have any taxable grant and scholarship benefits when he actually received a substantial amount,and has the 1098-T to prove it?</p></li>
<li><p>Parents' Other Untaxed Income or Benefits (line 94i) - My son originally put $0.00 in this line. The college changed this by taking the amount that we used from our savings accounts to pay our expenses (as we reported in one of our verification forms) and put that number in this line. Is this correct? (Our expenses exceeded our income, and we used our personal savings to cover the expenses.) I can certainly understand why the college did this if that was the appropriate thing to do. We just never saw anything in the instructions that indicated that we were to include money drawn from our personal savings accounts as Other Untaxed Income or Benefits, particularly since we paid tax on the interest.</p></li>
<li><p>Parents' Other Untaxed Income or Benefits (line 94i) (continued). When I filled out the monthly expense portion of the parent verification form, I filled out the part that asked us how much we paid in charge cards per month. I also added a note underneath indicating that this was misleading since I included what we paid for our credit cards under the other expense categories as well. For example, what we listed as paying in monthly transportation expenses also showed up in our monthly credit card payments - it's not like we pay for the same gas fill-up twice a month. I included in my explanation the fact that our true monthly expenditures should not include the credit card payments since we pay off our charge cards every month, we don't pay interest, and we hardly ever have any balances carry over to the next month.</p></li>
</ol>
<p>Is there a better way to fill out the Parent Expense sheet? I feel like if I don't record the credit card payments, I'm lying. But if I do, I'm double-reporting a significant amount of our expenses.</p>
<p>The reason why this is an issue for line 94i is that the college included all of the expenses we paid from our savings account, plus the double-reported charge card amounts. They did the same thing in line 94i of my son's FAFSA last year but I didn't catch it until a few days ago. We had significantly higher expenses this year over last year, and I'm wondering if the college figures that if we had enough to spend money on home repairs this past year, then we can afford to pay more for college expenses.</p>
<p>We're not looking for handouts we're not entitled to. We just want to understand the process a little bit better so things go smoother next year.
. </p>
<ol>
<li>If the student filed a return and had SCH xxxx on the W-2 line and that amount was included in W-2 wages then you properly reported that amount on line 44d. Amounts entered in 44d benefit the student as that amount is subtracted from AGI so the student isn’t penalized for having taxable scholarships/grants.</li>
<li>Amounts taken out of non-retirement accounts to use for college expenses or anything for that matter are not other untaxed income. As you noted you pay taxes on the interest these accounts earn and that interest is included in your AGI. Were these accounts reported as assets on the fafsa?</li>
<li>Just seems a compounding of 2. I don’t know what expenses paid from properly reported assets have to do with anything regarding fafsa.</li>
</ol>
<p>The Parent Expense Sheet is something that would be different for each college. Perhaps you did enter some things incorrectly. You need a phone call or sit down with a supervisory type person in the finaid office. I could see the expenses altering a school’s own aid perhaps but changing your fafsa incorrectly is not the way to accomplish that.</p>
<p>I think you had better make a telephone conference appointment with the financial aid director of the school, send her an email telling her that it is urgent she go over your student’s FAFSA changes with you. </p>
<p>Your son’s scholarships, grants, other aid are not supposed to be reported. Even if they are over the taxable threshhold. That’s the nice thing about getting work study. Even income from that is not reportable. So (1), I understand and agree wtih the school.</p>
<p>I do not understand why money from your savings accounts are being counted as income. They should not be, unless those are from qualified plans of some sort. When you take money out an IRA, roth or regular, a 401 K, those distributuions are counted as income, but not any money you have in any savings account or any loan proceeds. Something is not right here. My guess is that something you filled out on the verification form is not right and you have given the school the idea that you have some qualified account from which you are withdrawing Another possibility is if you are taking money out of a business account ANy money you include as your assets, your non qualified ones, in the FAFSA can be spent and not taken as additional income. </p>
<p>Is this FAFSA or PROFILE that you are asking about? Or a school’s own form? My suspicion is that the issue lies in how that verification form was filled out. There appears to be some misunderstanding here. </p>
<p>This sounds like several errors. Money you take out of saving is NOT untaxed income, unless you pulled it from a retirement account. The "parent expense sheet’ is not something all schools use, and if anything from that form is used it would be for CSS profile, not the FAFSA. Did you report a very low AGI? Some schools collect additional information if they believe there is not enough income to account for a household’s expenses.</p>
<p>What was the impact on the EFC? Sometimes these changes don’t really impact aid at all, other times it has a big impact. If the impact was significant, definitely set up a time to talk to a Sr level person in the FA office. Sounds like they are not looking at untaxed income correctly.</p>
<p>Not reported for what purpose? Taxable amounts of scholarships/grants are reported to the IRS, included in AGI and the amount entered for fafsa question 44d so the formula will subtract that amount from AGI.</p>
<p>Work study income is reportable to the IRS as income, included in AGI and the amount from need-based employment is entered in fafsa question 44c so the student is not penalized for that either.</p>
<p>So the school appears to be handling this incorrectly.</p>
<p>I really appreciate all of the help everyone provided here. To answer some of your questions from up above:</p>
<p>“annoyingdad”/(not so annoying) - The savings accounts we used to pay our household expenses were reported on FAFSA. Also, I didn’t realize that verification forms might differ quite a bit depending on the college.</p>
<p>“cptofthehouse” - My son did not have work study. He had grant money that he used to pay room & board, which is considered taxable income. And, I’m talking about the FAFSA application and the school’s own verification forms.</p>
<p>“mittentigger” - We had a very low AGI this year, which is why the college asked us to fill out their verification forms. Our EFC was raised quite a bit based on the college’s changes to the FAFSA.</p>
<p>We’re setting up an appointment to visit the financial aid office very soon. In looking over our paperwork we noticed that line 39 from FAFSA can be very confusing. Line 39 says “How much did you [the student] earn from working in 2013?” Of course this sounds like, how much did you earn from wages or salary? However, the directions say to add up the amounts on 7 + 12 + 18 + Box 14 (etc.) of your IRS Form 1040, which includes the taxable grant money my son received as reported on line 7 on Form 1040. The IRS Data Retrieval Tool also carried over this amount from my son’s tax return and deposited it on line 39 of his FAFSA application. </p>
<p>We’re guessing that the college financial aid officer thought all of the amount we reported in line 39 was strictly from earned income rather than earned income plus taxable grant money, although it still doesn’t explain why they changed the Scholarship and Grant Aid money received as reported in line 44d to $0.00.</p>
<p>I’ll update this thread when I get answers just in case someone else runs into the same snags as we did. </p>
<p>Sorry, what I meant was that any scholarships, grants, work study awards are not counted as income. Though reported, they should be subtracted out again for a net zero effect on the next year’s financial aid. That is regardless if it results in taxes owed. Savings accounts, really any account, money comprised of amounts of deposited work study proceeds, loan proceeds and any financial aid and scholarships are not reported. </p>
<p>It seems to me that the verification forms were either filled out or interpreted incorrectly. Also the verification form might be poorly worded. </p>
<p>I have only seen one a while ago and it was requested because my friend had so little income, but lived pretty well, so I guess the school was questioning how she was making ends meet. She had a huge HELOC and assets that she drew upon, as well as having borrowed money those years but her zero EFC would bring up flags each year. </p>
<p>Are you sure question 39 was transferred via the DRT? I just looked at the correction summary for my daughter from when I used the DRT for her and it wasn’t transferred. Amounts entered in that question give a credit to the student for social security and medicare taxes paid. The amount in that field should only be the amount from work despite the instructions.</p>
<p>My brother and I recently had a discussion about question 39. I was not aware that the DRT brought over question 39 this year … but he sent me the screen shot from the transfer, and low and behold, the income from work does transfer. This means that it transfers with the scholarship money included. His D’s aid office kept it in income from work, removed it from AGI, and made 44d 0. I have no idea what is going on with schools and the taxable scholarship money these days! (I have grad students, and no one gets that much gift aid, so no issue for me.)</p>
<p>The taxable scholarship money has to be removed somehow. In my niece’s case, they chose (for whatever reason) to remove it from AGI and make 44d 0. OP’s child’s aid office needs to remove that money from the formula somehow … I would push the aid office on that one! Send them a copy of the 1098-T (no, the aid office does not necessarily have access to that document).</p>
<p>Parent’s other untaxed income or benefits: The school should not have done what they did, as far as I can tell. It’s your savings, and you spent it. It’s not like it fell from the sky and you used it for your expenses. I would push them on this, too.</p>
<p>As for the charge card stuff, I am not quite sure what you filled out or how the school looks at that. I have never delved into anyone’s finances that carefully … I only look at income. If it’s high enough for the family to live, I don’t care how much they owe on their charge cards. If it’s really low, I just look for evidence of how they are able to afford to live (and with my previous school’s population, that was often by living with relatives or in a shelter). I wouldn’t know how to interpret your situation, which sounds different than I am used to, meaning I can’t comment or offer any insight for that.</p>
<p>This was many years ago, about 15 or more, when my friend had to undergo a massive verification process because she had a zero EFC despite living a rather high flying life. They did want to know what her charges card balances were and how they were being paid. Actually, I think they were looking for additional income. She was difvorced and if her ex had been paying her charge cards, which he actually had been doing for a while, they would have caught unreported income that way. In her case, it was all bonafide. She was living on her home equity line, loans,gifts and savings. But her kids school was looking for any way some claimable income could be found. </p>
<p>In her case, the schools were both state schools and it was the FAFSA that was closely examined. She must have set off flags as this occurred wtih both of her kids, one with a PA state school, the other with an OH state school. Both kids got max federal and state aid, some money from the schools and loans were incurred for the rest. The Dad repaid all of the loans once the kids were out of school, as his graduation gifts to the kids. </p>
<p>The reason why this is an issue for line 94i is that the college included all of the expenses we paid from our savings account, plus the double-reported charge card amounts. They did the same thing in line 94i of my son’s FAFSA last year but I didn’t catch it until a few days ago.</p>
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<p>This makes no sense to me. Why would they put money you paid as untaxed income? Unless someone gave you that money, it is not “income.” I don’t get it.</p>
<p>kelsmom is right ( of course!) it makes no sense for them to be listing money you paid OUT as income. Either someone at the college does not understand verification at all, or there is some part other factor that is not being described here. As an FA professional, it always concerns me when I hear stores about rogue FA administrators making things up based on what makes ‘sense’ to them. Sounds l like that is what is happening.</p>
<p>Something is missing from this story either on the college 's end or the OP’s.</p>
<p>The only way to get an answer is to meet with the college folks.</p>
<p>As an FYI…my daughter got an email that all of her need based aid had been canceled. Supposedly the FAFSA had been changed. Ahem…her FAFSA EFC was $22,000 and the COA at her school was $50,000. So I called them. Apparently there was some glitch in their system, and it was an error.</p>
<p>And an additional FYI, she had Direct Loans, and a college grant that actually was tied to maintaining her GPA…no federally funded need based aid. </p>
<p>So I looked at my daughter’s DRT transfer summary again and question 39 did transfer. The questions that transferred were listed out of order: 33, 36, 39, 37, 38. The same issue as scholarships/grants also applies to student college employment earnings where SS and medicare taxes aren’t paid.</p>
<p>“mom2collegekids” You’re correct - FAFSA does not ask for credit card information. However the parent income/expense verification form that I filled out for the college asked how much our credit card expenses are per month. </p>
<p>“cptofthehouse” I can certainly understand how the college is trying to figure out how we’re paying for our expenses with such little income. I stated quite clearly in the college’s parent income/expense verification form that we’re paying the expenses out of our savings account. My take is that the college feels like they need to make changes to FAFSA in order to better convey our true financial state. It just doesn’t seem right to put in incorrect data into the FAFSA form. For one thing, if we’re ever audited, how would we ever be able to justify the false information, not to mention how hard it would be to remember everything that happened a year or two after the fact.</p>
<p>“kelsmom” That Line 39 issue sure is a mess. I don’t know why the FAFSA form doesn’t just ask for an itemization of how much of the AGI is from wages and salary, how much from scholarship and grants, how much from interest, etc. </p>
<p>As far as the credit card information, the parent income/expense verification form the college had us fill out had a list of expense categories, and we were supposed to put the dollar amount of our monthly expenses next to each category. Some of the categories included utilities, transportation, food, incidentals, credit card payments etc. I then had to total the dollar amounts in order to come up with total monthly expenses.</p>
<p>I certainly don’t mind letting the college know how much we charge on our credit cards each month, but they should put that questions off to the side so our charge card payments don’t show up in the totals for expenses. The only way it should accurately show up in our total monthly expenses is if we were paying interest on our charge cards, or if we were paying off balances from previous years. That’s not the case in our situation since we pay our charge cards in full every month. Last year I questioned the college on that and they told me to go ahead and include our total charge card payments per month, and add a note in the lines provided underneath that the charge card information we provided was being double-counted in our total expenses. (It’s not like we send money to the credit card companies just because we feel like it.)</p>
<p>This whole issue of credit card payments would mean a big fat nothing except for how the college apparently decided that they needed to show enough income in my son’s FAFSA form to cover all of the expenses. So, they apparently felt the need to take the dollar amount of expenses we had (including the double-counted charge card amount), subtract our actual income from that number, then put the remainder in line 94i - Parents’ Other Untaxed Income or Benefits.</p>
<p>I don’t know what the college fin aid office did, and neither do you. It looks like some mistakes were made, namely that withdrawals from your accounts were counted as income. That would bring up an EFC very quickly if you have large withdrawals. You have gotten enough feed back here so that when you talk to someone in fin aid, you can pin point where some problems are. Pls let us know where the mistakes were made as it appears as though this is a problem in the verification form. Others might get caught the same way. What a pain. I hope they fix this. It’s inexcusable that they make the process so much more difficult.</p>