Are You Committing FAFSA Fraud to "Save All You Can?"

http://answers.yahoo.com/question/index?qid=20070918083057AAh3oSX

"Saving all you can..." For what? That new car to drive to college with or that first Spring Break trip you've been saving up for?

FAFSA Fraud has severe penalties, probably far greater than the FinAid difference you will get by lying to yourself, and both the government and your intended graduate school. Then, if found out, your record of fraud will still be there when your children come around asking for aid, it will become part of your permanent family record, not just your own, the government will never allow you to co-sign any federal or state loan with such a record.

And then comes the question of your own ethical integrity. You will always know you stole the money. "They'll never find out" really isn't as true as you might think. There are new programs designed to detect fraud and the greater burden is placed on the college which has more to lose by not reporting you.

Stand up and act ethically from the start. Don't start off your professional career with lies, they will haunt you forever...and set a pattern of behavior that can dog you well into your life beyond graduate school.

The last time I checked, taking money under false pretenses is clearly defined as fraud and theft. As an older graduate (I hope you're not considering law school) you've seem as though you've been financially harmed before and are seeking systemic retribution.

Is there a way to anonomously report fraud regarding college financial aid?

http://collegefinancialaidnews.com/2010/is-there-a-way-to-anonomously-report-fraud-regarding-college-financial-aid

Question: I am aware of someone who is fraudulently reporting information about her son in order to receive more government assistence for his college education. Is there a way I can report this anonymously.

It really frosts me to see someone take advantage of the system like this since the programs were not designed to be used this way.

Thank you everyone!

Answer:  I agree: it’s very frustrating, since it’s taxpayer money (yours and mine) that they’re taking, undeservedly. You can report Student Aid Fraud to 1-800-MIS-USED. Naturally, there’s no guarantee that that anyone will be able to stop this person from abusing the system, but it’s a start.

You can rest a little easy knowing that applications are selected randomly for a process called “Verification” (some schools require everyone to partake in this process, submitting tax forms for the school to scrutinize). It’s possible that this person will eventually get caught.

False Information On The FAFSA - It simply doesn’t make sense.

Many people resort to FAFSA fraud, in order to eke out a few extra dollars.

If you’re caught receiving help due to fraudulent information, you lose all benefits, must pay back any money you’ve received, and may face further fines and fees.

That’s if it’s an innocent mistake. If you’re found to have knowingly filed false info, the penalty is $20,000 and/or prison.

What’s more, this isn’t like taxes. A miniscule number of tax returns go through the audit process; a minimum 1/3 of FAFSA applications go through an audit, and some colleges audit every single one.

Lying on your FAFSA is a low-reward, high-risk endeavor. Even being careless on your FAFSA carries huge penalties for no gain. It simply doesn’t make sense.

Is it possible to to file for FAFSA without your parents tax form?

The only way to NOT file without your parents income is to be 24 years old, a veteran, married, an orphan, a ward of the court, have kids or have a bachelors degree. Until then, you'll need your parents taxes.

It does not matter if they will be paying for your education, if you dont live with them, or if they claim you on your taxes, or even if you support yourself.

Sorry.. federal rules.


http://answers.yahoo.com/question/index?qid=20080102161929AAbuXsX

What Happens If You Deliberately Don't Report Assets on the FAFSA?

http://www.fastweb.com/financial-aid/articles/3066-ask-kantro-what-happens-if-you-deliberately-dont-report-assets-on-the-fafsa?print=true

Failure to report assets on the Free Application for Federal Student Aid (FAFSA) is fraud. It doesn’t matter whether you keep the money in a safety deposit box or stuffed under your mattress. Failing to report the money is still fraud, since you will be making a false statement on the FAFSA in response to the question about the “total current balance of cash, savings and checking accounts.”

The penalties for providing false information on the FAFSA are severe. Per section 490(a) of the Higher Education Act of 1965 [20 USC 1097(a)], the penalties include a fine of up to $20,000 and/or up to 5 years in prison. These penalties apply both to attempts to receive and to the actual receipt of Title IV federal student aid through fraud, false statement or forgery. (The FAFSA also includes the following signing statement: “If you purposely give false or misleading information, you may be fined up to $20,000, sent to prison, or both.”) You will also be required to return all student aid, making it much more difficult for you to pay for college. Some colleges will expell students who submit falsified financial aid applications, as it is a violation of their honor code.

What's Wrong With FAFSA Fraud

http://talk.collegeconfidential.com/2322143-post8.html

Unfortunately it hurts others too. If she becomes fraudulently eligible for federal pell grants etc. then that takes away money that others deserve, and if she accepts financial aid provided by the college, again, that is money that could/should go to other eligible students who meet the actual criteria. We all know there isn't enough money to go around to meet everyone's actual "need", so there are definitely others who are impacted by this manipulating/cheating of "the system".

It's one thing suspecting that someone fudged their numbers, but you are in a much more delicate situation when your sister-in-law flat-out told you it was a lie. I don't have any advice for you, but stories like this definitely bother me. Grrrr.....

What happens if you lie on FASFA?

http://answers.yahoo.com/question/index?qid=20090122124817AAj1qZK

Lying on a federal application is committing fraud and will put you in serious trouble when you get caught. You can be fined, receive jail time, lose any chance of getting financial aid in the future, no longer be allowed to attend the school you want, or a multitude of those things.

When you electronically sign the FAFSA there is a statement that reads something like, "Under the penalties of perjury I affirm this information is true...." If you knowingly submitted incorrect information that is fraud and you can be subject to paying back all of the money you received as a result of the fraud as well as being subject to fines, jail or both. Here is a link to a website that discusses fraud on the FAFSA

http://www.finaid.org/educators/fraud.phtml#common

How to Report FAFSA Fraud

http://www.ehow.com/how_7707905_report-fafsa-fraud.html

The Free Application for Federal Student Aid is funded by federal education resources. To apply, current and anticipating undergraduate and graduate level college students fill out an annual form. Types of aid includes approximately nine programs. When people engage in fraud by falsifying documents, this hurts the entire system because those who actually need the financial aid may be denied due to lack of sufficient funding to assist everyone who applies.

Instructions
things you'll need:
Verified Documentation
Notes with Factual Evidence
Names and Contact Info of Alleged Fraud Perpetrators

1. Gather all information concerning the alleged fraudulent activity. One of the more common FAFSA discrepancies concerns under-reporting assets or overstating the number of family members in college. Find documentation that supports your suspicions. If you have copies of financial documents, those will need to be provided as evidence.

2. Document all conversations that you have had with suspected individuals or others who have suspected fraud. For example, if someone directly told you that fraud was committed, write down all of the facts, such as the name, address, phone number, time, place, form and event and what exactly was said. Do this for every person who may have said something to you. Record all of the facts that you are aware of, such as any suspicious activity and income and assets that may be considered excessive and could have been under-reported. Also include any facts, figures or other information that led you to believe that fraud was committed. Authorities will need as much information as possible to follow up on the reported suspicion.

3. Review all of your information for accuracy. Create a time line to organize the information as necessary. Make a copy of all of the information that will serve as evidence. Include your notes with all of the names and contact information for all of the parties involved.

4. Consult the USAID Inspector General website to find the local office for reporting. Review the website to find the phone number for the state in which you suspect that the fraud was committed. Call the appropriate USAID Inspector General office to report the suspected fraud. Make notes during the phone conversation in case there are further instructions. It may also be helpful to have this information, should it be required to call you as a witness. Follow any instructions that you are given. Provide a copy of all of the documentation and evidence that you have to the Office of the Inspector General, according to the information that you receive from them.

Wise Positioning Vs. FAFSA Fraud

http://www.collegemadesimple.com/false-info-fafsa/

NOT OK: “Giving” assets to an aunt, uncle, or other distant relative, so you don’t have to declare them on the FAFSA.

NOT OK: Giving everyone in the family a new car, with the expectation that they’ll pay you back at a family interest rate.

NOT OK: Saying you’ll go back to school, enrolling in classes, then getting dropped for never attending and non-payment (until recently, this was a popular scam that is closely monitored).

NOT OK: Hiding your money in debit accounts held in offshore banks.

OK: Contributing the max amount to your IRA or 401(k) so that more of your assets are held in a “non-includable” retirement plan that typically doesn’t affect your EFC.

NOT OK: Understating your assets or overstating the number of children you have in college on the FAFSA.  Sounds ridiculous – but surprisingly, this is one of the most common forms of FAFSA fraud.

Common Types of Fraud

Extracted from http://www.finaid.org/educators/fraud.phtml 

The most common types of fraud will involve underreporting of income and assets and overstating the number of family members in college. Some families may even go so far as to provide a falsified copy of their income tax returns.

Look for the following warning signs:

• Interest and Dividend Income both zero, or very low when compared with the family's wages. Compare these figures with any figures reported for capital gains or losses.
• No alimony income reported or alimony payments reported when the custodial parent is female.
• No business or farm income reported when the parents' occupation suggests that they are self-employed. If the return reports one-half of self-employment tax or self-employed health insurance deduction but no business or farm income, be suspicious.
• Check the return for the telltale signs that it is a photocopy of a photocopy. If it appears to be a photocopy of an original, be suspicious.
• Round numbers like $0, $500 and $1,000 for income.