401(k) rollover incorrectly inflating our FAFSA SAI - colleges requesting rollover documentation

omg literal same thing happened to us! my dads 401k rollover got counted and our SAI went from what should be like 15k to almost 45k!!! the financial aid ppl at my school told us to just file a appeal and include our tax documents that show it wasnt income. still waiting to hear back tho 🙄

I'm a financial aid counselor, and unfortunately this is a common issue with the 2024-2025 FAFSA. Your approach is correct: 1. The special circumstances form at each college (sometimes called Professional Judgment or Income Adjustment form) is the right starting point. Include documentation showing the rollover - the 1099-R should have a code G in Box 7 indicating a direct rollover. 2. The FAFSA correction strategy is less reliable. While the IRA rollover field technically works for reporting the 401(k) rollover amount, not all financial aid systems process this correctly. Some colleges' systems will flag this for manual review anyway. My advice: Focus on the special circumstances forms and contact each financial aid office directly. Explain the situation clearly and ask for an estimated timeline for when they'll process your adjustment.

Call the financial aid offices!! I went through similar nightmare with my daughter's FAFSA last year (not exactly same issue but also had incorrect income calculation). Submitting forms without follow-up meant nothing happened for weeks. When I finally called, they processed our adjustment in 3 days.

I had this exact 401k rollover issue and successfully got it resolved with all three schools my son applied to. Here's what worked: 1. I submitted the special circumstances forms with a copy of the 1099-R showing the rollover code 2. I attached a brief letter explaining that the rollover was not income and never entered our bank accounts 3. I included our tax return transcript (not just the return) which you can get free from the IRS website 4. I followed up with phone calls 3-5 days after submission All three schools adjusted his SAI and aid packages. The corrected packages arrived 2-3 weeks after submission, and the difference was substantial - about $9,000 more aid at each school. One tip: If you're having trouble reaching financial aid offices by phone, I used Claimyr (claimyr.com) to get through. They have a service that waits on hold for you and calls when a rep answers. Saved me hours of hold time. They have a demo video that explains it: https://youtu.be/TbC8dZQWYNQ

The FAFSA is completely broken this year! My daughter's financial aid has been delayed for MONTHS because of all the stupid FAFSA problems. Now we're finding out our SAI is wrong too because of my wife's pension rollover. The worst part is EVERY SCHOOL handles corrections differently! One school told us they won't even look at our correction documents until AFTER we've paid the enrollment deposit. WHAT A SCAM!!! The whole system is designed to confuse families and make us pay more. My neighbor's kid got more aid than my daughter even though they make $30K more than us annually!

I don't think you should be reporting the 401(k) rollover as an IRA rollover on the FAFSA correction. Those are different retirement accounts with different rules. You might cause more problems by entering information in the wrong field. The special circumstances forms are your best bet.

Has anyone had a college actually DENY their special circumstances request for the 401(k) rollover situation? I'm trying to gauge how likely we are to get this fixed and how much I should be panicking.

lol my parents would kill to have the kind of problems where u have $78k to rollover 😂 but fr tho hope u get it fixed

I think the entire FAFSA system is stupid. My son got NO financial aid because I made $92k last year, but they don't consider that I live in New Jersey where that barely covers rent and groceries. Meanwhile my nephew in Oklahoma got grants because his parents make $60k, which goes WAY further there. The whole system is broken.

I'm dealing with a similar issue but with a 403(b) rollover from my teaching job. The amount was much smaller ($23k) but it still bumped our SAI up significantly. I called one of the schools and they told me to submit a "Data Change Request" form along with the special circumstances paperwork. Apparently some schools have both processes? The financial aid officer said the Data Change Request gets processed faster because it goes directly to their FAFSA team instead of the general appeals committee. Might be worth asking about when you call!