Hey guys,
I got admitted as Freshman in College last year, this fall will be my second year in college. Obviously, I filed FAFSA and CSS last year and this year. We assumed certain things and made an error of about $10K in assets. How can we fix this? What can happen? can they take the entire aid away from last year? what would happen to the aid going forward. Regardless, I would like to fix the error, I just want to know how this works if you realize you made and error and voluntarily intend to fix this.
Talk to the FA office.
They may reduce your FA for next year, not taking it away. It depends on the type of asset too. What is that?
This was due to missing on some overseas FDs, since they don’t send you 1099 etc it was out of sight.
If it’s your parent’s asset then it affects less. I guess around 2-3K. Student’s asset affects more on FA.
Parent assets are assessed at 5.6% of value for fafsa purposes. So a $10,000 asset would only add $560 to the EFC.
^ Yes, around that much for FAFSA. I knew the percentage but did the math incorrectly. I am not sure about CSS though. Probably not heavy.
It’s no problem if it goes up accordingly. What I’m worried about is they taking the entire aid away, then I won’t be able to go to college! Not that it matters at this time as you have to fix it regardless.
They are not cruel. If you don’t make correction things may get worse later.
I made correction on my kids’ CSS 2, 3 times due to my poor eyes. 10K is not a gross mistake.
We don’t have enough information to give you an accurate answer on what YOUR college will do. Here are some things that could happen.
- Some colleges have a threshold of family contribution under which you get more need based aid. If this takes you above that threshold, you would lose some aid.
- To qualify for a Pell grant, your fafsa EFC must be below $5000. So if your EFC rose above that amount, you would lose the Pell portion you received.
- Most colleges do not meet full need. It is very possible that this won't make a difference at all. Because your college doesn't meet full need anyway.
- If you received only a small amount of aid, yes, you could,lose all of it. But if you received a large amount of need based aid, it is not likely you would lose all of it because of a $10,000 increase in assets.
Do we need to see Tax attorney or CPA? There is something we will have to fix on IRS interest as well and Foreign accounts reporting. Would we have to go back and correct last year’s FAFSA and CSS, I did not get any aid from Federal Govt, it’s all through school. Can the school correct everything?
“But if you received a large amount of need based aid, it is not likely you would lose all of it because of a $10,000 increase in assets.”
I know you are not going to lose all of the aid by the numbers. I don’t know if they take it away because you made a mistake and they think something else.
People make mistakes. You are correcting your mistake…which is the honest and correct thing to do.
Since you’re being honest and telling about the mistake yourself, I’m sure they’ll realize that it was a genuine mistake and not an attempt to get away with a lower EFC.
How much in assets do your parents have? The total amount may still be below the protected amount.
Since you’re going to be telling the school, the sooner the better. I doubt it will change your aid very much. But if for some odd reason it does, it’s better to know now rather than later. Besides, you’re all stressed out from worry…you need to put that worry to rest.
The oversight of 20K is from overseas bank balance since you do not get 1099, regular statements etc. Financial aid officer asked for bank statements and that is when we started looking closely. Should I go see FA and tell her that I made an error on overseas assets accounting and I would like to correct it? assets we are talking about here are 100K not in millions just to give perspective. Not eligible for pell grants etc so I believe I would need to deal with school.
$20k in income or assets?
Ugh! 100K in liquidable bank asset was not reported? If that’s true then it probably will reduce a larger amount on your FA.
If you reported the 100K asset and forgot to report the 10K in1099 interest then it’s not so bad.
You need to make amendement tax returns. You may have to pay penalty (depending on how many years you did not report 1099 income on returns).
Your original post says about $10,000. Your post above says $20,000. What is the amount of the error?
“Ugh! 100K in liquidable bank asset was not reported? If that’s true then it probably will reduce a larger amount on your FA.”
100K is the total parental assets from bank and investment accounts globally, I wanted to give helping hands some perspective on what we are dealing with. what was not reported was 20K is what I meant to say. So instead of 80K reported amount ,it should have been 100K. @ 6% the EFC should go up by $1200. I hope they don’t do anything drastic.
20 k error is in assets not income.
Can you please give me some ideas on how to approach this? and get this cleared up once for all.
Will I need to amend FAFSA and CSS? or Just get with FA and they can make corrections.
I feel much better.
CSS does not allow to amend online. You can print out a copy of your current CSS, cross out the incorrect amount, write the correct amount next to it. You should also write a cover letter telling about the incorrect info. I think you can correct FAFSA online. Regardless, ask your FA office what you should do first.
You also need to file amended tax return. Your college may ask for it. Also, do so to avoid more penalties and possible legal costs.