<p>Scenario 1:
Say a family is making $100,000 a year when they file FAFSA. So the college gives them a financial aid award. Then the family has a $50,000 cut in income. Can the college give them a better financial aid package now?</p>
<p>Scenario 2:
Say a family is making $100,000 a year when they file FAFSA. So the college gives them a financial aid award. Then the family has a $50,000 increase in income. Are they obligated to tell the college of the income change?</p>
<p>Scenario 1: Yes, if the college has more money available. It's the "professional discretion" part of financial aid. (I know that's not its name, but there is such a concept.)</p>
<p>Scenario 2: Ethically, they should tell the college. However, I'm not sure if legally they have to, since aid was based on the previous year. In any event, the financial change will show in next year's application.</p>
<p>Scenario1: The college can review the new information and award additional funds if they are available...but colleges are not required to.</p>
<p>Scenario2: The family would be obligated to disclose this new information ONLY if they had originally requested a professional judgment to reduce their current EFC. The schools typically do not care if the income has increased, as the FAFSA is based on the prior years income.</p>