FAFSA showing 145,000 SAI after retirement rollover - how to fix inflated number?

You need to file a special circumstances appeal with each college's financial aid office. This is a common issue with retirement rollovers showing up incorrectly on the FAFSA. The FAFSA system itself can't distinguish between income and rollovers because it pulls directly from tax forms where both might appear on the same line. Each school handles these appeals differently, but typically you'll need: 1. A letter explaining the situation 2. Documentation of the rollover (statements showing money leaving one account and entering another) 3. Any 1099-R forms showing the distribution coded as rollover 4. Possibly a letter from either retirement plan confirming the transaction was a rollover Don't panic - this happens more often than you'd think! Schools are used to making these adjustments.

the same thing happen to my cousin last year and they just called the school financial aid office and explained it was a retirement thing??? i think they had to send in some paperwork but it got fixed pretty fast. good luck!!

Call the Federal Student Aid Information Center directly and explain the situation. They might be able to help you flag this as a rollover in their system. Their number is 1-800-433-3243 but good luck getting through - I spent 2.5 hours on hold last week and got disconnected TWICE. Alternatively, you can try using Claimyr.com - I found them after my third failed attempt to reach FSA. They somehow got me connected to an agent in under 20 minutes. They have a video demo at https://youtu.be/TbC8dZQWYNQ that shows how it works. Saved me so much frustration when I was dealing with a similar special circumstance issue.

Financial aid officer here - this is unfortunately a very common issue with the FAFSA. The federal system doesn't have a mechanism to differentiate retirement account rollovers from actual income during the initial processing. Here's what you need to do: 1. DO NOT submit another FAFSA correction trying to fix this - it won't work and could cause more issues 2. Contact each school's financial aid office with a "Professional Judgment" or "Special Circumstances" request. This is the formal process to address this issue. 3. Prepare documentation: 1099-R showing distribution code (should have a code indicating rollover), statements from both retirement accounts showing the money leaving one and entering the other, and a brief letter explaining the situation. 4. Submit this package to each school - it's completely routine and they'll know exactly what to do. Timing: Do this ASAP but know that schools won't make these adjustments until after your son is admitted. The good news is most schools have a holistic review process and won't eliminate applicants solely based on FAFSA data, especially when the SAI is obviously incorrect (jumping from 15k to 145k raises flags for us too).

THIS IS WHY THE FAFSA SYSTEM IS COMPLETELY BROKEN!!!! They make us jump through a million hoops to fix THEIR errors. My daughter had almost the exact same situation with a 403(b) rollover and we had to fight for MONTHS to get it fixed. And guess what? Even after all the "corrections" one school STILL didn't give her the proper aid package and we had to appeal AGAIN. The entire system is designed to discourage families from getting the aid they deserve!!

Just went through this exact situation last year with my son's FAFSA. Retirement rollover from Fidelity to Vanguard showed up as income. The key is documentation, documentation, documentation! Here's what worked for us: 1. Created a single PDF with all the relevant documents (1099-R with code G for rollover, statements showing transfer) 2. Wrote a clear one-page letter explaining the situation with bullet points 3. Contacted each school's financial aid office directly - don't just send documents without talking to someone first 4. Asked for the name and direct contact info of the person handling our case 5. Followed up every 2 weeks until resolved Most schools fixed it within 3-4 weeks, but one took nearly 2 months. Start the process immediately! And keep detailed notes of every conversation - names, dates, what was promised. It makes a huge difference when following up.

have you considered submitting a correction to your FAFSA? theres an option to review and make changes now

Just to add some clarification on the timing question that's come up a few times in this thread: 1. You should notify schools' financial aid offices about this issue NOW, even before admissions decisions 2. Most schools will make a note in your file but won't process the actual adjustment until after admission 3. This type of error should NOT affect admissions decisions at most institutions - schools can see the drastic jump in SAI and will flag it as a likely error 4. The 2025-2026 FAFSA will actually have a specific question about retirement rollovers to prevent this exact issue, but for this year's application, you'll need to go through the special circumstances process One last tip: When you contact each financial aid office, specifically ask if they have a "Retirement Rollover Adjustment Form" - many schools have created standardized forms specifically for this common issue. It can streamline the process considerably.

I went through this exact same nightmare two years ago! My SAI jumped from around 12K to over 130K because of a 403(b) rollover when my spouse changed jobs. I was absolutely panicked just like you are now. Here's what I learned: definitely follow the advice about contacting each school's financial aid office for a special circumstances review, but also make sure you have the right documentation. The most important thing is getting a copy of your 1099-R form and making sure it shows the correct distribution code. Code "G" indicates a direct rollover, which is what you want to see. Also, when you write your explanation letter, be very specific about the dates and amounts. Something like "On [date], $XX,XXX was directly transferred from [old employer] 401k plan to [new employer] 401k plan as a non-taxable rollover." The more specific you are, the faster they can process it. One thing that really helped me was creating a simple timeline document showing: job loss date, rollover date, new job start date. It painted a clear picture of why the rollover happened and that it wasn't additional income. Don't lose sleep over this - I know it's terrifying, but this gets resolved! My daughter ended up getting great aid packages once the corrections were made. You've got this!

I'm a financial aid counselor and want to emphasize something important that hasn't been mentioned yet - make sure to keep copies of EVERYTHING you submit to each school. Create a folder (physical or digital) for each college with all your documentation, correspondence, and notes from phone calls. Also, when you call the financial aid offices, ask them to put a "flag" or "alert" on your file about the rollover issue. This ensures that when your son's application gets reviewed for aid packaging, the counselor will see the note immediately rather than processing it with the incorrect SAI. One more tip: if a school seems resistant or says they can't help until after admission, politely ask to speak with a supervisor. Most experienced financial aid directors have dealt with this exact scenario dozens of times and can usually expedite the process. You're doing everything right by addressing this early. The fact that you caught it now rather than after aid packages come out puts you in a much better position!

I'm a tax preparer and see this rollover issue with FAFSA almost every tax season! One thing I always tell my clients is to make sure you understand exactly which line on your tax return is causing the inflated SAI. Look at your 1040 - the rollover amount probably appears on line 4a (IRA distributions) or 4b (pensions and annuities) even though line 4b should show $0 for the taxable amount. When you're preparing your documentation for the schools, include a copy of the specific page of your tax return highlighting these lines. Circle line 4a showing the gross distribution amount and line 4b showing $0 taxable. This visual makes it crystal clear to financial aid officers what happened. Also, if you used tax software like TurboTax or H&R Block, they usually generate a "rollover worksheet" that shows the transaction wasn't taxable income. Include that too if you have it. The good news is this error is so common that most experienced financial aid officers can spot it immediately when they see a sudden SAI spike with corresponding retirement account activity on the tax forms. You're definitely not alone in this!