This article is from the Financial Aid, Scholarships, and Fellowships FAQ, by Mark Kantrowitz with numerous contributions by others.
If the financial aid administrator believes that false information
was provided on the financial aid forms, they can require
additional documentation or even disallow your claims. Many
schools go through a process known as verification, in which a
high percentage of their students are required to provide full
documentation of every piece of information listed on the
financial aid forms.
Read the certification paragraph about providing false information
that appears on the front of the FAFSA form. In particular, the
FAFSA states that
any person who intentionally makes false statements or
misrepresentations on this form is subject to fine or
imprisonment or both under provisions of the United States
That includes the student and his or her parents. If you received
funds as a result of providing false information, you will be
required to repay those funds.