There is not a “Pell” looking at it. The school makes the adjustments it feels are correct. OP can call and say “I don’t understand the adjustments. Can you explain them?” and see what the school has to say.
I like that approach, asking them to explain. I find that asking a question is often a good way to proceed. Like when I call another attorney who I think is doing something ill-advised, I rarely start out blasting them; rather, I ask, “why did you do x?” If you don’t blast them, it doesn’t get their guard up, make them defensive; they are more likely to try to explain, and sometimes you can get lots of really good information that way, that they would never give you if you were more confrontational.
This way, if they have an explanation, maybe we can keep the better numbers, and still feel good about it. And if it was a mistake, we won’t have to worry about it coming back to bite us later.
Great suggestion, @twoinanddone.
I do think this is my son’s call, though, don’t you agree? Isn’t he the one responsible for the FAFSA? I will tell him what I think, but I think it’s his decision, his liability, and his inquiry to make. Anyone disagree?
In your original post, you say that “we were notified that the school had made a change in the FAFSA…” Does this mean that you (a parent) and your son both received emails notifying of the change? This has been my experience: that a notification email is sent to both the student’s email address and the email address of the parent that signed the FAFSA. If you were notified of the change, I see no issue with you as the parent making the inquiry with the school’s FA office. Given that you and your husband have a fairly atypical income and tax situation, I would think that as soon as any details start getting discussed, your son is going to defer to you anyway.
Was the schedule K amount from box 14, code A? If so, it does get reported on the FAFSA as income from work (if it’s not that particular box/code, it does not). It should have been considered your income, though, not your H’s.
Technically, you do not have any obligation to know that the amount may be incorrect. Morally … that’s another story, if you do realize it may be incorrect. In the end, if the school does realize it’s wrong and fixes it, you will be responsible for repaying the Pell overpayment.
^^OP has a K-1 from an 1120S, not from a 1065. The reference above is to SE income on a partnership K-1.
As to whether the OP or the student should contact the FA office, I’d consider whether the student can understand the K-1 and the parents’ income and other financial info. My children certainly couldn’t, so it would do no good for the student to make the contact. It’s complicated. I bet the first person at the FA office won’t understand it either and might take a few phone calls.
@Sweetbeet - Please note what @kelsmom wrote:
There’s the answer to your question, from someone who works in financial aid. So if you choose to contact the FA office at your son’s school, that’s up to you, but you have no legal obligation to do so.
Right…you have no legal obligation to contact the school per @kelsmom. But do put some money in the bank just in case the school finds an error that THEY made which would require you to pay back that Pell.
And the bigger question…will this happen again next year? And the year after? It doesn’t sound like that extra Pell money will make or break your situation…but just know…you could face this again…and again…and again.
Doesn’t one parent sign the FAFSA? If so that parent also has an obligation. Personally, my kid has no idea what my income and assets are and I prefer it that way. My kid is also unlikely to go through her FAFSA to look either. My kid cannot fill out a W4 for her summer job at the local club without help (I did not offer, she asked.)
Yes, @SeekingPam, one parent signs the FAFSA - but that parent has ZERO control over changes subsequently made by the college, and is not responsible for those changes.
^ Yes I am aware, having previously experienced this first hand. In our case the school was correct and it was an unintentional mistake I made.
I was responding to OP’s comment that the FAFSA is her son’s liability alone. I do not understand how you can expect an 18 year old to understand a FAFSA involving K-1s, SE and an LLC or PC. As I said mine cannot even properly fill out a W4 and neither can most of her friends who had way much taken out of their paychecks last year after putting down 1 exemption at their sub $2000 summer jobs.
Once the FAFSA is submitted and processed, the parent that signed it can’t even view it, let alone make corrections, without the assistance of the child/student, assuming that the parent and the child do not share their FAFSA IDs with each other, which they aren’t supposed to do. I think it would be hard to hold a parent liable for something that happens after the FAFSA is originally submitted (like a change made by a school), given that the parent shouldn’t be able to access the FAFSA to see the change without the assistance of another person.
Not questioning whether or not that is true, have no idea, but that is truly one of the more ridiculous things I have heard if it is true. So an 18 year old who has never written a check is expected to understand changes to a form that most adults have trouble with?! Amazing.
Also, in this case, how would the student even know that the income may have been assigned to the wrong parent unless the parent told him after viewing the form? In many families the children do not know the specifics of their parents income and assets.
OP, when you say “we were notified” is that both of you or just your child? If OP was notified of the change it does not make sense that she was notified and then is not allowed to view the change without asking her child to give her access?
I think the reasonable thing would be for the student to provide the parent with a copy of the updated “corrected” SAR and consult with the parent about what it means and the best course of action. My point is that the FAFSA belongs to the student. The student can choose to grant access and provide information to the parent (or not). If the student chooses not to do so, which is within his/her right, the parent has no recourse, other than refusing to provide information for the next year’s FAFSA, if there is one.
What an 18 year old considers “reasonable” and what is in fact “reasonable” never ceases to amaze me.
DS and I each got an email notification. I must have put in my email when I set up my Federal account, in order to sign the FAFSA. We are close on stuff like this, so when I got mine, I reached out and he forwarded his to me. Then I accessed the SAR with his permission. (This year, we actually did the FAFSA together, on Skype, and I encouraged him to read over all the parent info I put in and ask any questions he wanted. I don’t think he had any.)
No, he really doesn’t understand all the ins and outs of our finances, but I explained the mistake to him, and he certainly knows that his dad doesn’t have that kind of income. He understands that some of my income was put on a line relating to his dad, and that it decreased our EFC.
I am inclined to wait for our FA package. Maybe they’ll figure it out and fix it again before then. If not, we will have a chance to discuss it after he’s done with finals. I don’t want to stress him about it right now, and I don’t think there’s any big rush.
I do appreciate everyone’s thoughts and comments.Lots of food for thought.
Making a guess here that the school thinks all the K1 income from a professional PS is subject to Self employment taxes, as it usually is. So they didn’t put it in for you H. They put it in for you.
What’s a PS?
Partnership. Sorry.
This is not a partnership. It’s an S-corporation.