Filling out the FAFSA every year is a big deal -- after all, it determines how much and what type of tuition assistance you’re eligible to receive from the federal government to help you cover the costs of your college education.
But boy, can the estimated family contribution be a doozy.
Everybody has looked at the EFC on their FAFSA and wished they were receiving more aid. It doesn’t seem fair that at this point three generations of American students are still struggling to finance their higher education. And since student loan forgiveness still isn’t a sure bet by any means, what’s a broke college kid to do?
Fudging the numbers a bit to get more financial aid from your FAFSA can be tempting, but is it worth it?
What happens if you lie on the FAFSA?
How likely is it that you’ll get caught?
Today we’re taking a look at everything you need to know about lying on the FAFSA, including:
- How FAFSA verifies your assets and information
- What happens if you lie on the FAFSA
- Safer ways to secure more funding for your college education
- Next steps if you get caught lying on the FAFSA
Does FAFSA even know if you lie on the forms?
Understanding How and How Often FAFSA Verifies the Information and Assets You Report
The FAFSA seems like a pretty automated process. You can fill it out online, for free, and have your Student Aid Report (SAR) in your hands just a few days later. With over 100 fields on the questionnaire and nearly 20 million college students enrolled in public or private colleges, they can’t possibly look too closely at any individual form, right?
While the government doesn’t rigorously check every number that every FAFSA applicant submits, the office of student aid does its due diligence in verifying FAFSA applicant assets. Every year, about one third of applicants are selected for verification. If you are one of those students selected for verification, you’ll be expected to submit documents that match the numbers you sent in. That can include:
- Child support
- Proof of income
- Bank statements
- Tax forms/ returns (W2s, 1040s for both you and your parents, etc.)
- Proof of high school education (like your diploma or GED)
Typically, just one element is selected for verification rather than the entire form.
That being said, Universities can also choose to verify assets before disbursing financial aid. This isn’t a common practice at large public schools, but it may still happen. If you are attending a smaller, private school be aware that your school requiring additional documentation to verify your FAFSA responses is a very real possibility.
If you are selected to be audited, don’t worry, and don’t take it personally -- with a third of students selected for verification each year, the chances that you will need to verify your assets at some point during a 4+ year college career are high. Just be sure you submit your files by the deadline given, and your FAFSA should process without an issue.
However if your application responses don’t match the documents you provide, things can get ugly quickly.
What happens if you lie on the FAFSA?
Lying on the FAFSA is a Problem for Both Ethical and Legal Reasons
It’s important to complete your FAFSA as accurately as possible, but small mistakes do happen. Minor typos or rounding typically aren’t an issue, but if there are major discrepancies between the numbers that you or your parents are reporting and the documents you are able to produce for verification, you can face some serious ramifications.
For our purposes, lying on the FAFSA means things like:
- Failing to accurately report income. That includes your job, your parents’ jobs, and any other gigs or side hustles that might be bringing in some extra bucks.
- Sending money to relatives for safekeeping. The amount of money a student has in their bank account can impact the amount of money they and their family are expected to contribute, so some applicants attempt to hide assets by moving them into other relatives’ accounts.
- Otherwise hiding assets. This means bank accounts under different names, buying an excess of annuities or life insurance, and other tactics designed to make calculating the value of your assets more difficult.
Penalties for Lying on the FAFSA
According to The Higher Education Act of 1965 (sometimes abbreviated HEA), the repercussions of lying on the FAFSA can include hefty fines, loss of financial aid, and even jail time. The Higher Education Act allows for maximum penalties of:
- Up to 5 years in prison
- Fines of up to $20,000
- Returning any financial aid already disbursed
Since the FAFSA takes both student and parental information into consideration, you might be wondering who is on the hook for those penalties. In most cases, the parents are the ones who will end up facing the consequences, unless they are able to prove that the false responses were submitted without their consent, which would absolve them of legal responsibility.
But that’s not all:
- Lying on a federal document is a felony. Whether you or your parents face the charge, a felony charge can affect your ability to get into schools or land jobs for the rest of your life.
- Most schools have a zero-tolerance policy. Don’t risk losing a spot at your top choice school. Many schools will kick out students who are found to be cheating, whether it’s in class or on financial aid documents.
- Lying on the FAFSA can impact your taxes. Think getting some extra help from the FAFSA is as simple as moving some money around? Think again. If you are caught cashing out assets or otherwise trying to hide money, you could also be subjected to an Internal Revenue Services (IRS) audit to ensure that the appropriate taxes were paid on those assets.
Ethical Considerations of Lying on the FAFSA
If you’ve taken a look at news headlines at any point over the last couple of decades, you probably know that there is a lot of debate surrounding college education, tuition prices, and financial aid. Regardless of whether you support the system, think it needs to be reformed, or think it needs to be thrown out entirely, the actions you take when filling out the FAFSA have real implications for the amount of support available to other students.
The FAFSA is designed to give the most aid to students with the greatest demonstrated need. When applicants abuse the system, students with greater need who rely on federal support to make higher education possible may not have access to the grants, loans, and work study programs they rely on to finance their education.
So… is lying on the FAFSA worth it?
In our opinion? Absolutely not.
Between the high risk of being audited, the steep penalties, and the ethical concerns raised by impacting the amount of financial aid available to others, lying on the FAFSA is all-around not a great idea.
How to Pay for College without Lying on the FAFSA
Your Guide to Scholarships, Grants, and Other Financing Options
Okay, so lying on the FAFSA is out, but you still have to foot the bill for your college education somehow. What next?
You might be sick of hearing it, but spend some time looking for scholarships and grants.
Applying for scholarships can be a frustrating process -- just like applying to colleges and applying to jobs, it’s a numbers game. The more you put into your search, the more likely you are to come out with some serious help financing your degree.
At Grantford, our goal is to help students understand the financial aid process and get all the help they need paying for school. We update our blog regularly with scholarship lists curated for different demographics because finding more specific scholarships decreases your competition and increases the chances you’ll receive an award.
We also know that writing scholarship essays is a pain and takes up a lot of time, which is why we launched our very own Recycled Essay Scholarship. Seriously -- check it out. It’s the easiest scholarship application out there!
Tips for Offsetting the Price of College with Scholarships
When it comes to applying for scholarships and grants, there are a few things you can do to increase your chances of taking a significant chunk out of the pricetag of your degree, or even covering it entirely. Our experts recommend:
- Apply to local scholarships. National scholarships get lots of attention, have big rewards, and are easy to find, but when you apply for them you’re competing with thousands of other students from all over the country. By all means, toss your hat into the ring -- but spend the majority of your time focusing on smaller, local scholarships that will be easier to win.
- No scholarship is too small. Applying for scholarships takes time, and when you’re in the midst of sending out essays and completing demographic questions for what feels like the thousandth time, you may find yourself wondering if it’s all worth it. Take a deep breath. It is. Even small scholarships can add up surprisingly quickly.
- Hang onto your essays. And that means all of your essays -- the notes you take for icebreakers in class, the essays you write for college applications, scholarship essays, everything. Chances are, you can repurpose all or some of your work to make applying to future scholarships way faster. Pro tip? Highlight any phrases or passages in your essay you’ll want to switch out to customize your response for each scholarship to make them easy to find. And write a quick note about the subject of the essay at the top of the document or in the title for easy reference.
- Don’t be afraid to negotiate. Did you know that you can negotiate scholarship awards? You can! Much like negotiating a job offer, you can work with the financial aid office at your school before accepting a spot there to secure scholarship funding that makes their tuition competitive with other offers you’ve received. Don’t be afraid to advocate for what you need!
- Apply for aid early. Many programs -- including FAFSA and state-based support programs -- operate on a first come, first served basis. The earlier you apply, the better your chances of getting a large award.
- Stay organized. If you’re applying to lots of scholarships, take the time to create a spreadsheet. Not only can you keep track of what’s done and important dates like when you submitted the application or expect to hear back, it also gives you a convenient place to drop the links to any new scholarships you find so that you can revisit them when you have time to apply.
Lying on the FAFSA is a felony and can land you or your parents in some big trouble. Fudging the numbers may seem like an easy way to get some extra financial aid, but it can end up costing you a lot in the end.
Need help financing your college education? Let us know what you need to know! Our inbox is always open.