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Who's a Parent?
Income Taxes
Foreign Income
Asset Net Worth
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Asset Information
An asset is defined as property that has an exchange value. The
purpose of collecting asset information is to determine if your family's assets
are substantial enough to support a contribution toward your cost of attendance
(COA). Only the net asset value is counted in the need analysis; that is, any
debts against assets are subtracted from their value.
Previous versions of the FAFSA required students and parents to
complete a Simplified Needs Worksheet to determine whether they would be
required to list their assets on the FAFSA. While the current FAFSA does not
require you to complete a Simplified Needs Worksheet, the Department's processor
will still determine whether you or your parents qualify for a Simplified Needs
calculation.
If your parents do qualify for the Simplified Needs calculation,
their assets will not be taken into account when determining their EFC for
federal student aid. However, state agencies, private scholarship groups,
postsecondary schools, or other groups may require asset information for
nonfederal student aid purposes.
Ownership of an Asset
Ownership of an asset may be divided or contested in several
situations:
- Part ownership of asset. If your parents have only part
ownership of an asset, they should report only that part. Generally, the value
of an asset and debts against it should be divided equally by the number of
people who share ownership, unless the share of the asset is determined by the
amount invested or the terms of the ownership arrangement.
- Contested ownership. An asset should not be reported if its
ownership is being contested. For instance, if your parents are separated and
they may not sell or borrow against jointly owned property that is being
contested, the FAFSA information they report would not list any value for the
property or any debts against it. If ownership of the asset is resolved after
the initial application is filed, they are not required to update this
information. However, if ownership of the property is not being contested, they
would report the property as an asset.
- Lien against asset. If there is a lien or imminent
foreclosure against an asset, the asset would still be reported until the party
holding the lien or making the foreclosure completes legal action to take
possession of the asset.
Assets that are Not Reported
Examples of assets that are not reported follow:
- Principal place of residence/family farm. Your parents'
principal place of residence is not reported as an asset. Neither is their
family farm if the farm is their principal place of residence and your family
claimed on Schedule F of the tax return that it "materially participated in
the farm's operation." In certain instances, however, even if the family
farm is incorporated and your family files a corporate return instead of IRS
Schedule F, the value and debt of the farm are not reported on the FAFSA. In
such cases, you must present evidence that family members own all shares of
stock in the corporation and that those family members also reside on the farm.
- Personal possessions. Do not report possessions such as a
car, a stereo, clothes, or furniture. By the same token, personal debts such as
credit card debt cannot be reported.
Courtesy of: "Completing the 2000-2001
FAFSA," from the U.S. Department of Education
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