<p>We received notification today that my daughter's FAFSA was corrected by her school. I was stunned to see her EFC increase by almost $5,300. After a line-by-line comparison, I determined that the school reduced the figure reported on line 44d, Student's Grant and Scholarship Aid Reported in AGI, to zero.I am at a loss as to how they could have done this, as they are in possession of her tax returens showing "SCH" to the left of line 7 as well as her W-2s which show she did not earn the full amount of her AGI from work. Of course I will call the school tomorrow, but I was wondering how hard it will be to get this "correction" reversed.</p>
<p>Definitely contact them! It sounds like a poorly trained and/or overworked aid officer. Make sure you talk to someone who can fix the situation.</p>
<p>Thanks, kelsmom. I’m going to be charitable and go with “overworked.” Our experiences up to this point have been good, but this is worrisome.</p>
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Your daughter (student) should be the one calling the school, not you (parent).</p>
<p>^^^Normally I would agree with you, but my daughter is interning out of state this summer without access to any of the pertinent documentation and has asked me to initiate the contact on her behalf for the sake of expediency.</p>
<p>I call the schools for financial aid things, especially as this really a tax issue and I know my 18 year old won’t really understand it next year when she has to pay taxes on scholarship money. This is not the admissions officer you are trying to impress with how independent the student it before acceptance - this is $$. My money. My daughters signed the waivers so I could discuss financial matters.</p>
<p>I agree, twoinanddone. My daughter did not do her own taxes and has only a basic understanding of what is involved (one of the reasons why she asked me to call). I, on the other hand, have become more familiar than I ever wanted to be with this situation. She also would not be the one coming up with the additional money if the FAFSA correction is not reversed.</p>
<p>Every year for my son in this situation he got an email with a link to a form that had to be filled out and signed confirming he had actually reported the income in his AGI. I know you said they have the tax returns but did you miss needing a form by any chance?</p>
<p>We have not been asked to complete a form such as you describe, annoyingdad, but did have to submit her tax returns (showing the scholarship/grant income) and W-2s through IDOC. Additionally, she was selected for verification and we submitted additional forms then. Not to mention, can’t the school tell that the grants and scholarships they awarded my daughter exceed the cost of tuition, books and fees?</p>
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I have to ask, you mean like many people today? H&R Block and CPAs work their magic so most people don’t need to know any of that. It’s not unusual.</p>
<p>Are these, in fact, taxable scholarships?</p>
<p>Erin’s Dad, my working daughter did do her own taxes (I helped) and both also did a 1040ez as part of a school project. They have a basic understanding. They do not have an understanding that they will have to pay taxes on scholarship money that I ‘moved’ to DD#2’s return so that I can take the AOTC credit, the kiddie tax or other non-income based taxes. It’s pretty complicated when you are doing things to get credits and moving tax liability around.</p>
<p>I will show her when we do the taxes, but really, did you understand any of this when you were 17? </p>
<p>The scholarships were reported on the 1040 as scholarship income, so I am assuming it was reported correctly. Did she actually earn that much more than tuition, as indicated on her 1098-T? I am assuming the answer is yes.</p>
<p>And yes, the school can find the scholarship/grant info, but to do so for every student is not really feasible. The truth is, though, that a huge percentage of students (my grad students included) incorrectly report grants/scholarships as income when it really isn’t (because it wasn’t enough to be reported on the 1040 and was, in fact, NOT reported on the 1040). So an aid officer who has a required number of files to process may overlook the “real” one and make an incorrect adjustment. Or the aid officer can be like the very nice but completely wrong aid officer my brother dealt with at his D’s school … having a financial aid compliance queen for a sister is probably annoying, but it sure can come in handy.</p>
<p>kelsmom, my daughter did not receive a 1098-T because her aid exceeded tuition and fees. I would love having a financial aid compliance queen for a sister!</p>
<p>The person I spoke with today indicated they subtracted out the amount of taxable grants/scholarships from my daughter’s AGI in their system, which they do routinely since they know that is not income the student can use to pay for college, This triggered a FAFSA “correction”, but she was not sure why the taxable grants/scholarships disappeared from line 44d and will have to research it further. Line 44d was unchanged last year.</p>
<p>The other strange thing was that the FA person I spoke with insisted that the EFC on the initial FAFSA was the same as on the changed FAFSA, and it definitely was not. I have copies of both.</p>
<p>Erin’s Dad, I was referring more to the issue of taxable grants/scholarships than taxes in general, but to be honest, my kids don’t have a strong understanding of either – and neither does my husband!</p>
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<p>I’m not sure I understand this. Students we know DID receive 1098T forms. The scholarships were listed, as well as allowable educational expenses. That is one way they KNEW how much exceeded the tuition and fees.</p>
<p>My daughter didn’t get her 1098t in the mail! but was easily able to access it online.</p>
<p>Colleges are only required to send 1098T forms to students whose qualified tuition and related expenses is greater than the student’s scholarships and grants. True fact.</p>
<p>That seems backwards Kelsmom! Seems like the folks who would NEED that 1098T are the ones where the scholarships are in excess of tuition and fees!</p>
<p>The purpose of the 1098T is to advise families they may have eligible QEE for the AOTC. It can be useful for determining taxable scholarships amounts, but that’s not it’s purpose.</p>
<p>I’m guessing the fact that the college is reviewing this is a good step. But still hope the amounts declared as taxable are correct. </p>