FAFSA SAI calculation jumped from $35K to $162K after IRA rollover - how to fix this mistake?

This is a common issue with the 2025-2026 FAFSA. The system is incorrectly counting retirement rollovers as income because they show up on your tax return, but they're not actually supposed to be included in the SAI calculation. You need to request a 'professional judgment' review from your school's financial aid office. Make sure you have documentation of the rollover (the 1099-R form should show distribution code G for rollover). Schools can adjust your SAI calculation locally.

omg same exact thing happened to my brother last year!!! the whole system is so broken. he ended up losing his merit scholarship bc they thought our parents were rich. you need to fight this HARD.

The same thing happened to me, and I've been trying to call the FSA hotline for days. Finally found this service called Claimyr (claimyr.com) that got me through to an actual human at FSA in about 15 minutes instead of waiting for hours. They have a video showing how it works here: https://youtu.be/TbC8dZQWYNQ The agent confirmed that IRA rollovers shouldn't count as income and put in a correction request for me. My updated SAI came through 3 days later.

Financial aid counselor here. This is a well-known issue with the FAFSA that unfortunately affects many applicants each year. Here's what you should do: 1. Contact each school's financial aid office IMMEDIATELY - don't wait 2. Request a professional judgment review specifically for the IRA rollover issue 3. Provide documentation: 1099-R showing distribution code G, account statements showing money went from one retirement account to another 4. Get your tax preparer to write a brief letter explaining the rollover wasn't income 5. Follow up by phone with each school to confirm they received your documents Most schools are familiar with this issue and have procedures to address it. The key is acting quickly before aid packages are finalized.

THE WHOLE FAFSA SYSTEM IS RIGGED TO DENY AID!!!! They DELIBERATELY count retirement rollovers to make middle class families look rich! I had this EXACT problem and lost $23,000 in aid because my appeal was denied. They said I "should have known" to report it differently. HOW?? Where does it even ask about rollovers on the form?!?!

I worked through this same issue last year. Here's what I learned: The problem is that the FAFSA pulls your AGI directly from your tax return, and IRA rollovers often appear on Form 1040 line 4a but are then subtracted out on line 4b. The FAFSA system sometimes incorrectly grabs the 4a amount instead of using the correct number from 4b. Solution: You need to submit a correction specifically explaining the rollover issue. Use the "Special Circumstances" section to note that a retirement account rollover was incorrectly counted as income. Then follow up with a call (if you can get through) to confirm they received your correction request.

Has anyone tried the IRS Data Retrieval Tool? Maybe redoing the FAFSA using that would fix the issue? I'm asking because my parents had a similar situation with a 401k rollover that got counted as income.

Update: I finally got through to FSA this morning! The agent confirmed that the IRA rollover shouldn't count as income and said they're seeing this problem a lot with the new FAFSA. They submitted a correction for me, but also suggested I contact my schools directly as backup. She said it could take up to 3 weeks for the correction to process in their system (ugh!), but the schools can make adjustments on their end in the meantime.

This is such a widespread issue this year - thank you Charlie for sharing your experience! For anyone else dealing with this, I want to emphasize that time is critical. Don't wait for the FSA correction to process if you have upcoming deadlines. I've seen students lose out on aid because they assumed the FAFSA correction would happen automatically. One tip: When you email your schools, include your FAFSA confirmation number and the exact amount of the rollover that was incorrectly counted as income. This helps the financial aid officers process your case faster. Also, if your first school responds quickly like Charlie's did, ask them what documentation they need - then you can send the same package to all your other schools immediately rather than waiting for each one to tell you what they want. The system definitely needs to be fixed, but in the meantime, the professional judgment process does work if you're proactive about it!