There are ways to maximize your aid eligibility -- just be sure they're legal.
I'm doing everything possible to lower my EFC. I have assets, UTMA, mutual funds, stocks and I know they hurt my chances of receiving free money (Federal or state grants). I was thinking of cashing in the assets and putting them in a safety deposit box. That way I won't have to claim them on the FAFSA because they are no longer assets. I have two children who will be attending college. The age difference of the two is six years. Which means they won't be in college (hopefully) at the same time. Is this legal to do? If not, what are the consequences if I do this. Are there fines, penalties, etc.? I'm exploring all my options and if this way is illegal, then obviously doing it is out of the question. Any suggestions how to lower your EFC when you have assets that count against you? — Rich N.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." According to the U.S. Department of Education, falsifying information on the FAFSA could result in a fine of up to $20,000, jail time, or both. These penalties apply both to attempting to receive and to the actual receipt of student aid through fraud, false statements, or forgery. You will also be required to return all student aid, making it more difficult to pay for college in the long-run. Finally, some colleges will even expel students who submit false information on their financial aid applications, as it is a violation of their honor code. As you can see, it’s a pretty serious offense.You’re also very unlikely to get away with it. College financial aid administrators have truly seen it all and have must more experience in detecting false information than you have in falsifying your FAFSA application. For example, cashing out your assets will generate capital gains that show up on your income tax returns. If your assets are inconsistent with your income or interest/dividend income is inconsistent with reported assets, the college has the right to ask for several years of income tax returns and account statements. Though this sounds like an audit, it’s referred to as a FAFSA verification. However, if the financial aid office finds that you’ve been falsifying information, they are required to notify the General at the U.S. Department of Education for possible prosecution.It's also pointless to try to hide assets. Typically, when a parent has assets to hide, their income on its own is sufficient to prevent the student from qualifying for the Pell Grant as well as state grants. The need analysis formula is actually more heavily weighted toward income than assets. There are ways that you can maximize your aid eligibility legally. For instance, you can covert the UTMA account in a 529 college savings plan. For more strategies on how to maximize aid eligibility, check out our advice here.