What's Reported on the FAFSA?

The Free Application for Federal Student Aid (FAFSA^®) is the primary application used to determine financial aid eligibility. Families often have questions about what's reported on the FAFSA, particularly when it comes to income and assets. To guide you and your family through the application process, the following list outlines what you will need to report and what you do not need to report on the FAFSA to receive your financial aid offer.

Do Report

• Income found on your federal tax return: The FAFSA will ask for taxable and non-taxable income found on your federal tax return. This includes tax filing status, income earned from work, tax-exempt interest income, untaxed portions of IRA distributions and pensions, Adjusted Gross income, income tax paid, IRA deductions, and education credits, as well as net profit or loss from a Schedule C. The good news is that the application will pull this information directly from the IRS (with your consent) so in most cases you won't need to enter this information manually. Note that if you took a one-time IRA or 401K withdrawal from your income, many colleges will remove this from your income when evaluating your financial aid eligibility upon request.
• Savings and checking account amounts: The FAFSA asks for this information to determine the available cash you have. Feel free to pay your monthly bills first, and then report your totals. If your child has a custodial account set up by you, the custodial account is reported as an asset of your child, not you.
• Investments: Enter your totals for any investments you own, including stocks, bonds, trusts, UGMA or UTMA accounts, money market funds, mutual funds, CDs, 529 plans and other college savings vehicles for the student applicant, and other securities. Make sure you don't report 529 plans and other college savings accounts for the student's siblings. If someone other than the parent, such as a grandparent or noncustodial parent, owns a 529 plan for the student, do not list it as an asset on the FAFSA.
• Net worth of additional properties owned: Any real estate outside of your primary home must be reported. This includes time shares, rental homes, vacation properties, and any unit within your primary home rented to anyone outside of your family that has its own entrance, kitchen, and bathroom.
• Other assets: You'll be asked to report the net worth of any business or farm assets (consider land, buildings, machinery, equipment, and inventory) as well as the amount of child support received in the last full calendar year (which the FAFSA counts as an asset).
• Insurance settlement: The full amount of an insurance settlement distribution will automatically be included on the FAFSA if it appears on the tax return as taxable income, whether it was a lump sum or annual distribution.
• Family size & number in college: The FAFSA will ask for you to list the number of people in your household (they will determine this number automatically for you from your tax return but you can modify it) and the number of people in the family attending college in the upcoming year.

Do Not Report

• Your primary home: The FAFSA doesn't expect you to list the value of your primary home as an asset that can help pay for college.
• Your retirement savings: The FAFSA doesn't ask you to list the balance of 401(k)s, IRAs, Roth IRAs, pensions, or other retirement funds.
• The value of life insurance policies: Reporting life insurance is not required by the FAFSA.
• Types of personal property: Cars, boats, artwork, and jewelry are examples of personal property that you would not report as an asset on the FAFSA.
• Credit card debt: The balances of outstanding credit card debt are not reported on the FAFSA.
• Workers' Compensation: Workers' compensation is not reported as income on the FAFSA.
• Student Funds Earned Through a Co-Op: Student funds earned through a co-op are not reported on the FAFSA as income.

For more details on the FAFSA, watch our recorded webinar, Understanding the FAFSA. If you run into more questions, please contact us. You can reach us at (800) 449-MEFA (6332) and collegeplanning@mefa.org.