How and why FAFSA can verify the assets recorded on their applications.
Have you ever filled out your FAFSA, or are planning on filling out your FAFSA, and thought ‘maybe I could get away with fudging the numbers on here a little?’ Well, you might want to reconsider because the answer to that question and the possible consequences that follow testing the verification process of FAFSA can be costly for multiple reasons.
What is the FAFSA and Why You Need to Fill it Out
The ins and outs of the FAFSA and benefits of completing it
If you’re a newbie at applying for financial aid, whether for an undergraduate degree or something comparable, the first thing necessary in order to become eligible to receive the most amount of aid towards your education possible is filling out the FAFSA.
The FAFSA is an online form that requires information about your household members, their income, your income, and yours and other household members’ savings. When you plan to fill out the FAFSA, make sure to have tax forms and any other information about your household’s situation available and ready to type in.
Once you’ve completed the FAFSA fully and submitted it, it will be run through a program that considers all of the information you previously input to generate your amount of financial need and your expected family contribution. The expected family contribution is the amount of money that the government expects your family (and possibly you) to allot towards paying for your education. Financial need is the amount that your expected family contribution does not cover in the cost of attendance, and this financial need amount will be factored into the grants, loans, and work studies that you will become eligible for.
The FAFSA is a crucial step for every student who is interested in receiving any sort of financial aid to take before going to school. Additionally, the FAFSA must be renewed each year that you’re in school, so always make sure to stay on top of those deadlines. While it varies by state, the deadline for first-time FAFSA applicants typically falls on August 1st and May 1st for students who are renewing their application.
For a deeper look at what the FAFSA is and why you should complete it, check out our in-depth guide.
Can FAFSA Verify My Assets?
How FAFSA might seek to confirm your responses to their application questions
The FAFSA can mean the difference between being able to fund your education or not. It could be the difference between having to take out massive amounts of money in the form of loans, or finding other means to pay for university. For many, the FAFSA is a key tool in what allows them to attend higher education, and any abuse of this system can be costly for not only those who commit fraud but also students around the country who demonstrate financial need who receive less due to others abusing the process.
The answer to whether FAFSA can verify whether the numbers you put down for your parents’ or your income, assets, and other costs contains a lot of gray area. For the most part, and if we’re being realistic, FAFSA will not verify every single person’s application to make sure that it matches up with what they actually have in their bank accounts or tax forms. Doing so would require ample time and resources on behalf of the government and department of education.
Does this mean that everyone should put down lower income and asset amounts on the FAFSA in order to obtain the most financial aid they possibly can? Absolutely not. While the main reason you should refrain from doing this is because it’s ethically wrong and takes away opportunities for less advantaged students from attending or paying for school, the other reason is the consequences of getting caught lying on the application.
Because the government cannot verify if every single person is being perfectly truthful on their financial aid application, they use an auditing system that randomly selects applicants to verify their data through tax forms and bank statements. About one-third of all applicants are selected for verification each year, meaning that they have to provide proof of their application responses matching up with their income and assets.
In some cases, a university may choose to verify all of their students’ financial information, but this is most common in private, smaller schools.
If you’re audited, or selected for verification, don’t panic. As mentioned, the chances of this happening during at least one year of your time in college is quite high. If you’re selected, you’ll have to follow the directions on your FAFSA account, which mainly consists of uploading tax documents like W2’s and 1040’s for both you and your parents. If discrepancies are suspected with savings accounts or assets, you might be asked to verify this information by uploading yours and your parents’ bank statements.
Failure to supply this verification can result in the loss of financial aid, so always be sure to check if you have been chosen for verification and make sure to upload the requested documents on time in order to receive maximum aid.
So, what happens if you or your parents choose to lie on your FAFSA? If there are major discrepancies between the number listed on the FAFSA and yours or your parents’ actual information, then serious consequences may arise. To start, The Higher Education Act of 1965 states that anyone caught lying on the FAFSA is subject to penalties up to five years in prison and a fine of $20,000. Additionally, any financial aid that was provided as a result of the fraudulent information will be owed to the institution that the student is enrolled in.
If you’re a dependent student who reports your parents’ income on your FAFSA and you lie on the application, your parents will be facing the majority of these consequences. If you’re an independent student, then you will face these consequences for lying, potentially leading to being kicked out of school as a result.
If you’re thinking about lying on the FAFSA to get more financial aid, think again. The application was created to increase the opportunity for lower and middle class students to attend higher education, and by lying on the application, it hurts other students. And those hefty fines and prison times should be a pretty good motivator, too.
Other Ways to Increase Funds for College
Scholarships, loans, and more
If you just read the last section and are thinking, ‘now what do I do to pay for college?’ don’t worry. There are a variety of actions you should take to maximize your education funds before resorting to lying on the FAFSA (which you should never resort to at all).
The first option, which almost 70% of students do at some point in their academic career, is take out loans. The types of loans offered to students include Stafford loans, which are either subsidized or unsubsidized, Parent Loan for Undergraduate Students, or PLUS for short, private loans, and consolidation loans.
Stafford loans are included in financial aid packages and can be accepted or declined by students, but the rest of the types of loans must be applied for. Private loans can be difficult and costly to take out, as they sometimes have a high interest rate based on the lender's discretion, but they are a good option if you are struggling to finance school even after Stafford and other federal loan opportunities.
Aside from loans, scholarships are a great way to make a dent in your total educational costs. Scholarships can be applied to by any student of any program in any year of their education and are essentially free money. For more information about scholarships, check out our guide.
If you’re looking to have a large portion, or the entirety of your education, paid for, there might be some special programs offered depending on your course of study. Joining a branch of the U.S. military is one method of paying for school, as many programs offer to pay the full cost of tuition for those enlisted, in active duty, who are reservists, or are veterans.
There are also loan forgiveness opportunities presented to those in professions like nursing and education. A great way to see if you qualify for these programs or whether you might be interested in participating in one of these programs is by conducting your own research, understanding the requirements for each opportunity, and evaluating whether the opportunity would make a significant difference in funding your education.
Regardless of your ability to pay for higher education, you should never lie on your FAFSA in order to receive more financial aid. The chances of getting away with it are slim and you’ll be taking funds away from those who need the assistance, so consider going down other routes like loans or scholarships to fund your education.
