You stated something in your original post that is actually incorrect. FAFSA does not require you to file any required taxes before receiving aid. The IRS requires you to file taxes. If a financial aid officer looks at your file and realizes you did not file taxes when you should have, they must require you to file taxes in order to receive aid. The regulation is this: If a school is working on a student’s file and discovers that the student should have filed a tax return, they cannot disburse aid unless/until the student files. If the school finds out after the student already received some aid, they have to return the aid until the student files - then they have to look at all the income info, revise awards if necessary, and redisburse the awards based on the new information.
Schools assume you are doing what you are supposed to do until they know otherwise. You did not do anything fraudulently, since you did not realize you were supposed to file until now.
You can talk with your school’s financial aid office to see what they say.
I see what you’re saying. So they wouldn’t expect me to immediately return all the money they gave me, for instance, last year, but might withhold more aid until it’s resolved (Which it would be quickly). And, if i do work with them, get it filed, and my efc doesn’t change much, I’ll get the money back? And I wouldn’t be expected to pay anything off out of pocket first? I’m definitely willing to be proactive with this and suppose it’s better to do this over winter break.
What was your EFC when using the 2015 tax figures for those two years? If high enough where you didn’t receive a Pell grant, it is unlikely to make much difference for the need based financial aid you received. I don’t even know if the unearned scholarship income is a factor in the FAFSA student income section at 20%. I don’t think it is.
On the other hand, if your EFC is $0 based on your parents’ income and assets, your (student) income and assets aren’t considered at all. You’d do all this paperwork for no change to your EFC.
My efc is not 0 but it’s really low, like $800. From my perspective, I doubt filing my taxes and reporting it to my school would change ANYTHING because they already had all of my financial information. My income, in their eyes, wouldn’t change. I just want to make sure I do the moral and lawfully right thing. I’m angry at myself that I didn’t notice until now
I can’t promise you what would happen for last year, but you would feel much better if you just deal with the issue head-on & get everything straightened out. Worry is not a good thing … it is better to talk to an aid officer & go from there.
Out of curiosity, what would happen if I filed the back taxes but didn’t let the school know. Would the IRS report it for me, or would they find out?
I’m going to be completely honest, I’m terrified. Not of the IRS because hell, I might be owed money. But because I’m a full aid student, and if I lost my aid for even a second, I’d be homeless. I’d literally have nowhere to go, in a different state. My entire life could be ruined over a tiny mistake I made that doesn’t even have to do with how much money I actually have-- which is small.
According to what you guys have told me, there’s a possibility that I could end up homeless in the middle of a state I know little about aside from the university I’m on. With no job or anything else. So I’m sorry I’m freaking out a bit right now.
Kelsmom said that she didn’t know what they’d do for the last year, and this year they would revoke my aid until the taxes are reviewed post-filing. I am a full-aid student. Let’s say they revoked my aid for last year. I can’ t repay that. Probably ever. And if they revoked this years aid, I couldn’t pay rent or anything. I would be homeless, and not in school and I’d lose my full ride scholarship.
Scholarship is merit based, but I can’t keep my scholarship without being enrolled full time. I have a full pell, and a bunch of state grants. I also have loans. If I lost my financial aid, I couldn’t enroll full time, so I’d lose my scholarship as well. I’d lose it all. There’s nothing external I wouldn’t lose.
And I can reiterate-- the information on my 2015 taxes (once filed) they already have. It’s the aid they gave me based on 2014, and my meager salary. They know about this money. Nothing should change. But the penalty of not filing before, or the time that they’d revoke my money to reevaluate my case… that could cripple my entire life.
MODERATOR’S NOTE: I’m closing this thread. The OP needs to talk to an accountant and get this figured out. Strangers on the internet can give only so much advice.