<p>Many annuities are set up so that the actual income is only the interest which is disbursed, not the principal. Thus, the income would be the interest and not necessarily the full value of the annuity itself.</p>
<p>Also, people whose parent dies are eligible for social security payments as are their parents for a certain period of time. I think a kid gets until they are 18 or 19 and parents as long as they have a kid under that age. I don’t know if those funds are required to be reported on FAFSA or not.</p>
<p>I am on the side of those who believe in turning in cheaters and frauds, but I think you need to do a little more checking before you do so. This is your SIL and your MIL - have you spoken to your H about the situation? Perhaps he knows about how the annuity is set up and how the money is distributed? For instance, I have set aside some of my 401k money as an annuity for my kids, but they are not to get it until they are out of college so when they apply for FA, it’s not an asset. There is nothing illegal about tax sheltering, as long as it’s done legally…</p>
<p>I also agree with the poster who thinks that your MIL might be overwhelmed and perhaps your H can suggest that she consult with an accountant, preferably one who is also an attorney and licensed to appear before the tax courts.</p>
<p>Good luck. I, for one, applaud your moral fiber but urge you to be cautious in proceeding…</p>
<p>It is good to see someone that wants to do the right thing, this attitude everyone has of minding your own business is BS… it is your business, who do they thinks pays for all the theft of people who cheat (steal from the system). I say call everyone and drop the dime.</p>
<p>Also good job for standing up for what’s right</p>
<p>Why are you reviving this thread again? It was started five years ago!
It’s funny how each time this has been revived it was done by someone with who only posted one time ever.</p>
<p>One of my few complaints about the CC software is that there should be a way to automatically lock a thread after a given amount of time has passed with no postings.</p>
<p>Just try reporting to financial aid administrators, even when armed with facts. They don’t care if there’s fraud, and they won’t investigate. They will tell you, themselves, that they know misreporting is happening, but that FAFSA won’t follow up unless it’s a MAJOR amount of money (hundreds of thousands - as in a ring of conspiracy) - so financial aid administrators won’t do anything.</p>
<p>My point is that if we pursued individual cases, it would involve MAJOR amounts of money - money which has been unfairly paid out to undeserving people and as usual is on the backs of taxpayers. Nobody WHO MATTERS cares. It makes a sham of those kids who have done the right thing and honestly earned scholarships - and a sham of those parents who do the right thing and honestly report monies.</p>
<p>Why - in this day and age - isn’t there the automatic ability for FAFSA to VERIFY figures reported on FAFSA to income tax forms???</p>
<p>Answer: “somebody” doesn’t want it to happen b/c they are making bucks off of it</p>
<p>Can we please lock this thread? Things that happened 6 years ago have no bearing on what happens today. If people want to bring up this topic again, they should start a new thread.</p>
<p>In clicking on the link you provided, notice that this change is BRAND NEW for 2012. And is it only for students at UVU? </p>
<p>Up until now, the “verification process” has been nothing but a sham (personal experience over the past four years for two college students) - so just because it’s written up to look like it now has some teeth - I’m not convinced. The devil is in the details. </p>
<p>Perhaps the reason why this thread has resurrected so many times over six years is b/c so many people know there has been widespread FAFSA fraud occurring for YEARS, but little/nothing is done. Who cares what happened six years ago? Perhaps you should b/c it’s still occurring (and worse, not better). </p>
<p>Furthermore, don’t assume that all people who make the charge that there is fraudulent activity don’t know the true financial facts of the picture. Abuse often occurs where there’s been a divorce and one ex-spouse earns a lower income (but the other one does). Even if there are no other children in the college mix between the two “new” families created by divorce, the lower earning spouse claims that the children live with them the most and that he/she covers most expenses (often an untrue circumstance). NOBODY CHECKS the higher earning spouse’s income tax forms, not EVEN in the verification process.</p>
<p>We’ve now “taught” at least one generation of students that it’s perfectly fine to lie on official forms if it means one could get undeserved money and most likely not get caught. Gee, isn’t that the definition of fraud? (Those kids filled out the forms with parental assistance; students read the directions on the forms and know who’s providing the support and who isn’t and where the student actually lives most of the time. Don’t assume the students are innocent). I’ve spoken to two financial aid administrators for two colleges who outright admitted that they “know” that it’s sending a bad message to students - that it’s okay to lie - but that FAFSA won’t pursue it so they won’t. The colleges simply follow the inadequate guidelines FAFSA tells them. They initiate the “verification” process, but the information that comes back is provided directly from the spouse who was lying in the first place - and it is unquestioned. The process is useless for verifying anything other than the lie itself. </p>
<p>Why - in this day and age - isn’t there the automatic ability for FAFSA to VERIFY figures reported on FAFSA to income tax forms???</p>
<hr>
<p>If the parents/student directly link to the IRS website and download their information, and if they do not change it once it is linked back to the FAFSA (yes, aid offices are notified if they change it!!) … then the information can be assumed to be correct. That is, correct in terms of what was reported to the IRS … and I can tell you that the IRS does not catch all fraud on their end … evidenced by the number of folks we caught during verification who incorrectly filed as head of household instead of married.</p>
<p>If the information on the FAFSA is self-reported and not directly downloaded from the IRS website, it cannot be checked against the IRS website. It only goes one way - individual to IRS, not school to IRS. </p>
<p>That is why verification in 2012-13 requires direct download or an IRS tax transcript.</p>
<p>But … anyone who did not directly link & was not selected for verification can still get away with lying on the FAFSA. And even if the IRS link is used, there are other ways to lie that might not get caught (no, I am not going to list them!).</p>
<p>I’ve said it before … liars will find a way. It’s been that way since the beginning of time, not just in financial aid … and it’s not likely to stop before the world ends.</p>
<p>Of the past five years, neither of the two college students lived with the mother (the low wage-earner) for at least three of those years. One lived with her four days/week for the first year only. Yet the mother has filed the FAFSA early every single year, lying that the children lived with her most of the time and that she paid most of their expenses (not even close to the truth). She paid no child support; he did. She was, however, required to pay 25% of both students’ college expenses (so she had skin in the game of trying to get lots of financial aid). </p>
<p>The tax forms for the father (a high wage-earner) were never requested by either college, even after he notified financial aid offices of both colleges (he was afraid he would be held responsible for fraud b/c his income was not even being considered - he never filed the FAFSA forms; instead, the mother did it early each year with the students). Both colleges initiated the verification process for several years, but the father’s financial information was never reported nor requested by anyone. Why was there no link to the father’s income tax forms through the IRS? Financial aid was awarded for both students on the sole basis of the mother’s low income. Unfair.</p>
<p>There are obvious holes in the process that the “verification” process didn’t catch. Other than the fact that the mother hid her $60k divorce settlement by temporarily loaning those monies out to her boyfriend (to avoid reporting them on the FAFSA), I’ve not made the charge that she committed fraud on her IRS forms. But why was the father’s income never considered (i.e., the mother’s statement about where the students lived and who supported them was never questioned, even when the father reported the facts of the situation to financial aid offices). </p>
<p>Whatever - it just seems that not enough is done. Somebody gave her advice on how to manipulate the system - so this must occur much more often than people think. I don’t know that I really care anymore - but then again, isn’t apathy the reason it has been allowed to go on for so long?</p>
<p>Apathy is absolutely not the reason for it. Lack of resources to hound down the liars and cheaters is the reason. Would you prefer to squander the scarce resources to try to catch people hell-bent on cheating the system? It’s not like financial aid offices have a ton of money to pay for private detectives. Instead, they use their budgets to do many more positive things to the benefit of those who are on the up-and-up. It is far better to concentrate on helping the masses, rather than concentrating on catching the “best” cheaters.</p>
<p>OK - fair point. (I believe that the point of a forum such as this is to hear all sides of the issue, is it not - without offense?).</p>
<p>I wasn’t aware that lack of resources was the real problem. (Yet it seems like asking for financial information from BOTH parents wouldn’t cost any money - therefore no resources would be squandered. No private detectives required for that).</p>