Fafsa Corrections

Paying for College
1

<p>I filed my fafsa and ccs in January and naively mentioned that they have a 74k CD account (although I wrote in ccs that my parents are using that money to purchase a new home, which is true). I also noted that my parents haven't filed their taxes yet and so I have to make corrections now. </p>

<p>Does the $74,000 CD account count as a savings or an investment? And if I just fail to mention the 74k in my corrections, how will that affect my financial aid package?</p>

2

<p>

Naively? You are supposed to report the CD. How is that naive?</p>

<p>

It would reduce you EFC but you would be lying on a federal document. Not a good idea.</p>

3

<p>Well, I mean I wasn’t sure if a CD was an investment or a savings, so wouldn’t it have been easier pleading ignorance and not mentioning it?</p>

<p>and with the CD in account, would that significantly lower my financial aid package?</p>

4

<p>A CD is an investment for FAFSA purposes. </p>

<p>Ignorance is no protection under the law. </p>

<p>It would increase your EFC so reduce your financial need - difficult to know how much effect it would have on your financial aid package as so many other things come into play - income, how many other assets your parents have etc. But better to have reduced aid than a $20,000 fine or jail time (the penalties for lying on FAFSA). Your parents also have to sign FAFSA so the “pleading ignorance and not mentioning it will not wash”.</p>

<p>From finaid.org:</p>

<p>

</code></pre>

5

<p>Thanks</p>

<p>I’m going to file the CD account as an investment, but what about my parents IRA retirement fund? Does that count as an investment as well?</p>

6

<p>No - not for FAFSA. Certain assets do not have to be reported - Primary home, retirement accounts (IRAs, 401ks etc).</p>

<p>Unfortunately having money saved and earmarked for certain things does not protect them - for instance if the $74K was already invested in a house (primary home only) it would not have to be reported. As it is in CDs it does have to be reported even if the plan is for it to be used to purchase a home. </p>

<p>You sound as if you are maybe a little confused on some of the FAFSA questions. This site gives detailed explanations question by question of what has to be reported.</p>

<p>[Completing</a> the FAFSA 08-09/The Application Questions(1-31)](<a href=“http://www.studentaid.ed.gov/students/publications/completing_fafsa/2008_2009/ques.html]Completing”>http://www.studentaid.ed.gov/students/publications/completing_fafsa/2008_2009/ques.html)</p>