Roth IRA distributions can be tricky on the FAFSA. For the 2025-2026 FAFSA, they're using your 2023 tax information, so that $7,000 distribution will be relevant. The good news is that if you only withdrew your original contributions (not earnings) from your Roth IRA, it won't count as income on the FAFSA. The FAFSA follows tax rules here - qualified Roth IRA distributions aren't taxable income. However, if any portion was earnings and wasn't a qualified distribution, that part would have been reported as income on your 2023 tax return and would therefore be included in your AGI on the FAFSA. The FAFSA doesn't have a specific line for Roth IRA distributions - they're captured through your AGI and other income questions. If your distribution was properly reported on your taxes, it should automatically be accounted for correctly when you enter your tax information. Just make sure you don't count this distribution twice by also reporting it separately as untaxed income, which is a common mistake.

Great explanation from Mei-Ling! Just to add a bit more clarity - since you mentioned this was a $7,000 Roth distribution in 2023, you'll want to check your 2023 Form 1099-R that you should have received from your IRA custodian. This form will show the distribution amount and importantly, the distribution code in box 7. If the code is "J" or "T", it typically means it was a qualified distribution of contributions only, which won't affect your FAFSA. But if you see other codes, some portion might have been taxable. Also, remember that while the distribution itself may not count as income for FAFSA purposes, any remaining balance in your Roth IRA is still considered a parent asset on the FAFSA and will be assessed at the 5.64% rate in the Expected Family Contribution calculation. If you're unsure about how your specific distribution was treated tax-wise, it might be worth consulting with a tax professional, especially since FAFSA accuracy is so important for financial aid eligibility.

To clarify my earlier response about signature order: 1. Student creates the FAFSA account 2. Student completes their portion of the application 3. Student adds parent as a contributor 4. Student signs their portion 5. Parent completes their information and signs 6. FAFSA is officially submitted after all required signatures The application isn't actually submitted until ALL required signatures are collected. The student signing first just establishes the proper workflow and prevents technical issues.

I'm so glad you got it figured out! I went through this same confusion with my twins last year. One thing I'd add for anyone else reading this - make sure you and your daughter are both using the same browser and have cleared your cache before starting. We had issues where the parent contributor invitation wasn't showing up properly because of browser conflicts. Also, keep your FSA ID login info handy because you'll need it multiple times during the process. The whole redesigned FAFSA is definitely more complicated than it used to be, but once you get the signature order right, it does work smoothly.

I'm new to this community but your situation really caught my attention because I'm currently helping my sister navigate something very similar. She's going through a divorce and has about $32k in Parent Plus loans that she signed for alone during her marriage. One thing that might be worth exploring - and I apologize if this has been covered already - is whether Florida has any specific provisions for educational expenses in divorce settlements. I know some states treat education costs for children (including loan repayments) as ongoing child support obligations that can be shared between parents even after divorce. Also, from what I've been learning about Parent Plus loans, there are some newer income-driven repayment options that weren't available a few years ago. The Income-Contingent Repayment plan can sometimes result in significantly lower monthly payments if your post-divorce income is substantially less than your combined marital income was. I've been impressed by how supportive this community is in sharing real experiences rather than just theoretical advice. It's clear that unfortunately many families face this exact situation where federal loan policies don't align with how education decisions are actually made in families. Hoping you're able to find a path forward that works for your situation.

I'm new to this community but wanted to share some insights from my experience working in financial aid administration. What you're dealing with is unfortunately very common, and the responses here have covered most of the key points accurately. One thing I'd add is that when you do speak with Federal Student Aid (whether through the regular line or services like Claimyr that others mentioned), make sure to ask specifically about the Income-Contingent Repayment plan if you consolidate your Parent Plus loans into a Direct Consolidation Loan. This can potentially lower your payments significantly based on your post-divorce income alone, rather than the combined income that was likely used for the original loan terms. Also, while you're gathering documentation for your divorce proceedings, I'd recommend pulling your complete Federal Student Aid history online through your FSA ID. This will show exactly when each loan was disbursed and can help demonstrate the timeline of decisions if you need to show these were joint family choices made during the marriage. The system really is unfair in how it handles family situations like divorce, but understanding all your federal repayment options will at least give you more leverage in your settlement negotiations. Wishing you the best as you navigate this difficult situation.

UPDATE: We got it fixed! After trying the Help/Contact Us method that @profile2 suggested, we still didn't see any change after 3 days. Finally broke down and used that Claimyr service to get through to an FSA agent without the 2+ hour wait. The agent confirmed it was indeed a known system issue with the contributor invitations not linking properly. They had to do some kind of manual override on their end - took about 15 minutes while on the phone. We immediately saw the application appear in both parent accounts afterward! For anyone else facing this issue, definitely worth getting help directly from FSA rather than waiting to see if it resolves itself. Thanks everyone for your help!

So glad to see this thread with the solution! I'm dealing with this exact same issue right now - my daughter sent invitations to me and my ex-husband last Tuesday and we still can't see anything in our accounts. It's reassuring to know this is a widespread technical problem and not something we're doing wrong. I'm going to try the Claimyr service route since calling FSA directly seems like a nightmare with the wait times. Thanks @anastasia for the detailed update about what information to have ready when you do get through to an agent!

To address your follow-up question about loan approval vs. disbursement: The FAFSA only asks about current assets at the time of filing. So if you have loan approval but the funds haven't been disbursed to your account yet, those funds wouldn't count as assets. However, be careful with the timing because verification requests from schools can come later, and they may ask for updated bank statements. My recommendation would be to submit your FAFSA as early as possible (October 1), then arrange for your loan to be approved and disbursed after that date.

Just wanted to add another perspective as someone who went through this exact situation two years ago. We had a similar renovation loan for our rental property and made the mistake of taking it out right before filing FAFSA. It bumped our SAI up by about $2,500, which cost us nearly that much in lost Pell Grant eligibility. What we learned for the following year: we set up automatic payments to contractors and suppliers so the money never actually sat in our personal accounts. We had the bank disburse the loan funds directly to the roofing company and HVAC contractor. This way, the cash never showed up as our assets on the FAFSA snapshot date. Also, keep detailed records of all renovation expenses. Some schools will consider professional judgment appeals if you can demonstrate that the money was already committed to necessary property maintenance expenses, though success varies by school. One last tip: if you do end up with the cash in your account when filing, consider prepaying some other legitimate expenses (property insurance, property taxes, etc.) to reduce the cash balance before your FAFSA snapshot date.