new here, trying to help a loved one go to college after she finishes high school. When applying for FAFSA, do the colleges typically not pull back statements looking for possible income not reported? Say someone send monthly help to the parent.
Also, I assume they look at the kids bank accounts, for example if someone gave her money for a car, that income will count. obviously it was deposited in her bank account. They really need to go get counseling, I just wanted to get the ball rolling on some of the confusion.
I know they have gone through a hard time like a divorce in the last year so I know they make take that into consideration as well. THANKS in advance for any responses…
The student will need the income and tax information for the tax year of her fafsa. If she is completing the 2016-2017 fafsa, she will need this info for the full 2015 tax year.
There is a question on the fafsa about money paid on behalf of the student. So…any bills in the student name that were laid by someone else in 2015…those amounts will need to be reported.
Are you saying someone is giving money to the parent? If this is child or spousal support, this MUST be reported on the fafsa as well.
We did have one school that asked for bank statements, but that was over ten years ago.
The bottom line…fill these forms out honestly. Getting financial,aid by providing dishonest information is considered fraud…and you don’t want to get into that at all.
In terms of the divorce…only the custodial parent info is included on the fafsa.,this is the parent that the student resides with better than 50% of the time in the year prior to the fafsa filing date. However, any spousal or child support must be included as well.
If the student applies to a college where non-custodial parent info is required…the non-custodial parent will need to provide that information either via a school form, or the non-custodial profile.
When it comes to financial aid matters, the student is likely to get much better advice here than at the school counselor’s office. Counselors can be very weak in that area–we’ve heard some horror stories on CC about school counselors either giving incorrect advice or only having knowledge of/recommending state schools when private colleges may offer the best financial aid options. So, bottom line, come back here for good guidance as the process continues.
The FAFSA application is really based on two things, the income from the prior tax year (if applying Jan 2016, the income from tax year 2015) and the asset picture on the DAY you file. There are other things like 401k contributions and child support paid or received, but income and assets are the major ones.
The FAFSA application will not ‘pull’ your taxes or bank statements. You declare what you have. You may be selected for verification and then you’d have to send in a tax transcript.
If these parents are recently divorced, they certainly can do some planning as to who the student lives with more during the year, how assets are held (savings account, 529 plan). The schools (and FAFSA application) do not care that there has been a divorce or that money is being sent to relatives. If a student received money to buy a car and that money is in the bank account on the day FAFSA is filed, it’s an asset. If the car is in the driveway, you don’t have to report it.
Actually this is not true anymore. Most colleges ask that those completing the FAFSA link to the IRS Data Retrieval Tool. This is done instead of requesting the tax transcript. And it’s not only for those who are selected for verification.
However, you can’t link to the data retrieval tool until a few weeks after your taxes are electronically filed. So…many students will file their FAFSA…then go in later to link to the data retrieval tool.
You can request a tax transcript if you can’t (for some reason) link to the IRS data retrieval tool…but really…it’s a lot easier, and quicker to link to it.
If your parent buys you a car you do not have to declare it as student income. The parent and student each report any earnings for the previous year. They also report assets as of the day of filing. So you report the money in the bank that day. So don’t have extra money when you file. Buy the car first.
thumper, my kids were selected for verification and I had to send the tax transcript even though I used the DRT. Maybe it was only at one school? In fact I did it wrong and got a tax accounting report, so had to send it in again.