<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>
the penalties for lying are severe.</p>
<p>Be very careful about following any unethical advice. Financial aid administrators are obligated to notify the US Department of Education when they encounter cases of fraud. (If they don’t, their school is held liable when the US Department of Education audits them.) Every school verifies the FAFSAs of at least one-third of their students, and some schools verify 100% of the financial aid applications. This is in contrast with the IRS, which audits only a very small percentage of tax returns. So if you lie on your financial aid forms, there’s a very good chance you’ll get caught.</p>
<p>The FAFSA includes the following warning on the front:</p>
<pre><code>WARNING: You must fill out this form accurately. The information that you supply can be verified by your college, your state, or by the U.S. Department of Education.
You may be asked to provide U.S. income tax returns, the worksheets in this booklet and other information. If you can’t or don’t provide these records to your college, you may not get Federal student aid. If you get Federal student aid based on incorrect information, you will have to pay it back; you may also have to pay fines and fees. If you purposely give false or misleading information on your application, you may be fined $20,000, sent to prison, or both
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