Financial Aid Fraud

[Anonymous]

Anonymous wrote:At VT my DD had a roommate whose mother took out loans in her kids name. And took all the kids financial aid.

The other roommates reported her and she went to jail.

Sadly this is not uncommon and imo it is a big risk of those "mama bear" power of attorney forms that were trendy for a while. However, not sure it's relevant to k-12.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's fairly difficult to fake low income. Some services get the information directly from the IRS.

Not if you use an LLC for everything. I helped (through an org for FGLI kids) a kid last year whose family did this and reported their income as $80K and qualified as LI for college (3 kids). Fancy address. Most private meets-needs colleges that she was admitted to denied financial aid but one of HYPSM gave $60k/yr. Her dad had a video on insta to show how to use loopholes to own multiple houses (they had 5-6) through LLC and get money from the LLC — I did not watch it but after April 1, they removed it. I guess they did not want to be caught.

LLCs still have to report gross income on their taxes. It’s all on Schedule C. Having one does not hide what you made even if you can rack up expenses to lower your taxable income.

That is very naive. This is easily manipulated to be whatever you want. Depreciate assets, claim losses, do not report everything, etc.

No, it’s very aware of how taxes work. You can reduce your gross income, but that doesn’t mean it isn’t reported. What the schools do with it is a different question.

“Not report everything” is tax fraud, so yeah, you could do that but I wouldn’t recommend it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I know a kid who gets financial aid and has a north face jacket, not even used.

How do you know it wasn’t a gift?
My kid wears North Face too. Greater outerwear, raincoats and a couple of hoodies. They’re all from the thrift store.

you send your kid to private school, but buy your kids north face gear from a thrift store?? that sounds so strange on many levels.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know a kid who gets financial aid and has a north face jacket, not even used.

How do you know it wasn’t a gift?
My kid wears North Face too. Greater outerwear, raincoats and a couple of hoodies. They’re all from the thrift store.

you send your kid to private school, but buy your kids north face gear from a thrift store?? that sounds so strange on many levels.

I don’t buy clothes from thrift stores (definitely look for sales), but my kids wear plenty of hand-me-downs (as do many people I know). I guess that will change once they are fully grown (one of them almost is).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's fairly difficult to fake low income. Some services get the information directly from the IRS.

Not if you use an LLC for everything. I helped (through an org for FGLI kids) a kid last year whose family did this and reported their income as $80K and qualified as LI for college (3 kids). Fancy address. Most private meets-needs colleges that she was admitted to denied financial aid but one of HYPSM gave $60k/yr. Her dad had a video on insta to show how to use loopholes to own multiple houses (they had 5-6) through LLC and get money from the LLC — I did not watch it but after April 1, they removed it. I guess they did not want to be caught.

LLCs still have to report gross income on their taxes. It’s all on Schedule C. Having one does not hide what you made even if you can rack up expenses to lower your taxable income.

That is very naive. This is easily manipulated to be whatever you want. Depreciate assets, claim losses, do not report everything, etc.

No, it’s very aware of how taxes work. You can reduce your gross income, but that doesn’t mean it isn’t reported. What the schools do with it is a different question.

“Not report everything” is tax fraud, so yeah, you could do that but I wouldn’t recommend it.

No, you seem clueless how taxes work for small businesses. Many people can reduce their gross income to being virtually nothing to even reporting net losses by inflating expenses and minimizing revenue on paper. It is all legal, or at least close enough, even when they do not report everything. It is done legally. A small business can be very successful but report net losses, year after year. If large companies like Amazon can do it, so can the rest of us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:At VT my DD had a roommate whose mother took out loans in her kids name. And took all the kids financial aid.

The other roommates reported her and she went to jail.

Sadly this is not uncommon and imo it is a big risk of those "mama bear" power of attorney forms that were trendy for a while. However, not sure it's relevant to k-12.

It is not a risk for well-written limited power-of-attorney forms, which is a good reason to hire an actual lawyer instead of downloading some random paper from the Internet. (I am not a lawyer, but I absolutely use one if I have a legal matter.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's fairly difficult to fake low income. Some services get the information directly from the IRS.

Not if you use an LLC for everything. I helped (through an org for FGLI kids) a kid last year whose family did this and reported their income as $80K and qualified as LI for college (3 kids). Fancy address. Most private meets-needs colleges that she was admitted to denied financial aid but one of HYPSM gave $60k/yr. Her dad had a video on insta to show how to use loopholes to own multiple houses (they had 5-6) through LLC and get money from the LLC — I did not watch it but after April 1, they removed it. I guess they did not want to be caught.

LLCs still have to report gross income on their taxes. It’s all on Schedule C. Having one does not hide what you made even if you can rack up expenses to lower your taxable income.

That is very naive. This is easily manipulated to be whatever you want. Depreciate assets, claim losses, do not report everything, etc.

No, it’s very aware of how taxes work. You can reduce your gross income, but that doesn’t mean it isn’t reported. What the schools do with it is a different question.

“Not report everything” is tax fraud, so yeah, you could do that but I wouldn’t recommend it.

No, you seem clueless how taxes work for small businesses. Many people can reduce their gross income to being virtually nothing to even reporting net losses by inflating expenses and minimizing revenue on paper. It is all legal, or at least close enough, even when they do not report everything. It is done legally. A small business can be very successful but report net losses, year after year. If large companies like Amazon can do it, so can the rest of us.

IRS wants to see a small business make money most years. They quickly disallow it as a “hobby” if it does not.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Many schools do not offer financial aid to a family with a stay at home parent (without other preschool/infant children.) Staying home is seen as a choice.

Every school we have ever applied to assigns an “income” to the stay at home parent to account for what they would be making if they worked, unless there are kids under 5 in the family or some other extenuating circumstance.

This. No doubt an exception must exist somewhere, but most schools will “impute” an income for stay at home parents when calculating need.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's fairly difficult to fake low income. Some services get the information directly from the IRS.

Not if you use an LLC for everything. I helped (through an org for FGLI kids) a kid last year whose family did this and reported their income as $80K and qualified as LI for college (3 kids). Fancy address. Most private meets-needs colleges that she was admitted to denied financial aid but one of HYPSM gave $60k/yr. Her dad had a video on insta to show how to use loopholes to own multiple houses (they had 5-6) through LLC and get money from the LLC — I did not watch it but after April 1, they removed it. I guess they did not want to be caught.

LLCs still have to report gross income on their taxes. It’s all on Schedule C. Having one does not hide what you made even if you can rack up expenses to lower your taxable income.

That is very naive. This is easily manipulated to be whatever you want. Depreciate assets, claim losses, do not report everything, etc.

No, it’s very aware of how taxes work. You can reduce your gross income, but that doesn’t mean it isn’t reported. What the schools do with it is a different question.

“Not report everything” is tax fraud, so yeah, you could do that but I wouldn’t recommend it.

No, you seem clueless how taxes work for small businesses. Many people can reduce their gross income to being virtually nothing to even reporting net losses by inflating expenses and minimizing revenue on paper. It is all legal, or at least close enough, even when they do not report everything. It is done legally. A small business can be very successful but report net losses, year after year. If large companies like Amazon can do it, so can the rest of us.

IRS wants to see a small business make money most years. They quickly disallow it as a “hobby” if it does not.

Then not every year has to be a net loss, some years can eke out a small profit. Just enough to keep things going.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's fairly difficult to fake low income. Some services get the information directly from the IRS.

Not if you use an LLC for everything. I helped (through an org for FGLI kids) a kid last year whose family did this and reported their income as $80K and qualified as LI for college (3 kids). Fancy address. Most private meets-needs colleges that she was admitted to denied financial aid but one of HYPSM gave $60k/yr. Her dad had a video on insta to show how to use loopholes to own multiple houses (they had 5-6) through LLC and get money from the LLC — I did not watch it but after April 1, they removed it. I guess they did not want to be caught.

LLCs still have to report gross income on their taxes. It’s all on Schedule C. Having one does not hide what you made even if you can rack up expenses to lower your taxable income.

That is very naive. This is easily manipulated to be whatever you want. Depreciate assets, claim losses, do not report everything, etc.

No, it’s very aware of how taxes work. You can reduce your gross income, but that doesn’t mean it isn’t reported. What the schools do with it is a different question.

“Not report everything” is tax fraud, so yeah, you could do that but I wouldn’t recommend it.

No, you seem clueless how taxes work for small businesses. Many people can reduce their gross income to being virtually nothing to even reporting net losses by inflating expenses and minimizing revenue on paper. It is all legal, or at least close enough, even when they do not report everything. It is done legally. A small business can be very successful but report net losses, year after year. If large companies like Amazon can do it, so can the rest of us.

Lol you don’t know the difference between gross and net, nor how expenses get reported on tax forms, so I think we’re done here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's fairly difficult to fake low income. Some services get the information directly from the IRS.

Not if you use an LLC for everything. I helped (through an org for FGLI kids) a kid last year whose family did this and reported their income as $80K and qualified as LI for college (3 kids). Fancy address. Most private meets-needs colleges that she was admitted to denied financial aid but one of HYPSM gave $60k/yr. Her dad had a video on insta to show how to use loopholes to own multiple houses (they had 5-6) through LLC and get money from the LLC — I did not watch it but after April 1, they removed it. I guess they did not want to be caught.

LLCs still have to report gross income on their taxes. It’s all on Schedule C. Having one does not hide what you made even if you can rack up expenses to lower your taxable income.

That is very naive. This is easily manipulated to be whatever you want. Depreciate assets, claim losses, do not report everything, etc.

No, it’s very aware of how taxes work. You can reduce your gross income, but that doesn’t mean it isn’t reported. What the schools do with it is a different question.

“Not report everything” is tax fraud, so yeah, you could do that but I wouldn’t recommend it.

No, you seem clueless how taxes work for small businesses. Many people can reduce their gross income to being virtually nothing to even reporting net losses by inflating expenses and minimizing revenue on paper. It is all legal, or at least close enough, even when they do not report everything. It is done legally. A small business can be very successful but report net losses, year after year. If large companies like Amazon can do it, so can the rest of us.

Lol you don’t know the difference between gross and net, nor how expenses get reported on tax forms, so I think we’re done here.

You just exposed yourself. I know all of this extremely well.

[Anonymous]

Anonymous wrote:Most parents want to get rid of financial aid.

Disagree. We’re full pay at cathedral schools and while we love the schools and the opportunities they provide, our biggest concern is that our kids will be grow up to be entitled jerks. I would be happy for there to be more financial aid so that my kids can benefit from having friends with a wide variety of life experiences. My very selfish take on this is that my kids, who are full pay, benefit A LOT from the school providing financial aid. The schools are better because of their ability to attract wonderful kids that could otherwise not afford to attend.

Also it’s nice to give a **** about other people sometimes, especially children.

[Anonymous]

School administrator here. There is an ugliness and ignorance in this thread. Those who are begrudging families receiving financial aid are actually the ones who are wildly out of sync with school culture.

1. It is not accurate that most families want to get rid of financial aid. I work in school philanthropy and it's the #1 reason that the biggest donors cite when contributing to the annual fund. There's a benefit, as another poster said, to every student to having socio-economic diversity in the community. These students will graduate into a world with income disparity. They need the skills and awareness to communicate with others outside their economic class in order to function in their careers.

2. Why do you care what someone else's children wear? If they found a way to buy name brands cheaply, good for them! They don't owe it to you to spend every last minute trying to increase their income. There's a lot of wealth in these schools, and children who receive financial aid are surrounded by evidence of affluence. If they can wear a North Face jacket and feel more like they fit in, that's wonderful. They're still not going to be able to brag about skiing in Switzerland over winter break, which is what they hear other kids doing.

3. For those two parents working in low-paying nonprofit jobs? Good for them. Yes, the financial aid program wants to support those families! And they are often the ones who volunteer and bring the knowledge about how to run a sustainable non-profit (like the school itself) to their school committees, boards, parents associations.

4. A family getting a "sibling discount?" Why not? We love those families, so long as all the kids can meet the admissions standards. And when you apply $55K per tuition times 3 kids, and then do the math on the pre-tax income needed to support that? It means you can make a good income and still qualify for assistance.

5. I doubt very much there's any fraud going on. FAFSA and the business office know a lot more than you about a family's finances, job situation, etc.

Just by kind, OP, and stay out of it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Many schools do not offer financial aid to a family with a stay at home parent (without other preschool/infant children.) Staying home is seen as a choice.

Every school we have ever applied to assigns an “income” to the stay at home parent to account for what they would be making if they worked, unless there are kids under 5 in the family or some other extenuating circumstance.

This. No doubt an exception must exist somewhere, but most schools will “impute” an income for stay at home parents when calculating need.

How about if one parent works part time? Is a full time income imputed for them?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's fairly difficult to fake low income. Some services get the information directly from the IRS.

Not if you use an LLC for everything. I helped (through an org for FGLI kids) a kid last year whose family did this and reported their income as $80K and qualified as LI for college (3 kids). Fancy address. Most private meets-needs colleges that she was admitted to denied financial aid but one of HYPSM gave $60k/yr. Her dad had a video on insta to show how to use loopholes to own multiple houses (they had 5-6) through LLC and get money from the LLC — I did not watch it but after April 1, they removed it. I guess they did not want to be caught.

LLCs still have to report gross income on their taxes. It’s all on Schedule C. Having one does not hide what you made even if you can rack up expenses to lower your taxable income.

That is very naive. This is easily manipulated to be whatever you want. Depreciate assets, claim losses, do not report everything, etc.

No, it’s very aware of how taxes work. You can reduce your gross income, but that doesn’t mean it isn’t reported. What the schools do with it is a different question.

“Not report everything” is tax fraud, so yeah, you could do that but I wouldn’t recommend it.

No, you seem clueless how taxes work for small businesses. Many people can reduce their gross income to being virtually nothing to even reporting net losses by inflating expenses and minimizing revenue on paper. It is all legal, or at least close enough, even when they do not report everything. It is done legally. A small business can be very successful but report net losses, year after year. If large companies like Amazon can do it, so can the rest of us.

Lol you don’t know the difference between gross and net, nor how expenses get reported on tax forms, so I think we’re done here.

You just exposed yourself. I know all of this extremely well.

I am pretty sure this poster is a high schooler. If not, maybe a foreign bot.