What Is Considered an Asset When Filing for a FAFSA?

by Emily Weller
Students need to include cash and investments on the FAFSA.

If students want any sort of federal financial aid for college, they need to fill out the Free Application for Federal Student Aid form. Schools and the federal government use the form to determine how much students and their families can afford to pay, and how much students will get in the form of grants, loans or work study. The FAFSA looks at the money and other assets both the students and their parents have.

Cash

Students must report any cash they have on hand, including money in a savings or checking account and even cash stashed in a drawer or an extra wallet. Students should only include the cash they have on hand the day they fill out the application -- don't include money blown on a new car the day before. The cash assets of the student's parents count for less on the FAFSA than the student's own cash reserves, according to CU Student Loans. Since the parents' cash counts for less than the students, the Finaid website recommends having savings and other cash accounts in the parent's name; it could mean a bigger financial aid package for the student.

Investments

Most investments are counted on the FAFSA, too. Investments include any stocks, bonds and mutual funds. As with cash, parental investments count for less on the FAFSA than the student's, but a Uniform Transfer to Minors Act account still counts as the student's own asset, even if the parents are the custodian.

Real Estate

Parents aren't expected to sell their home to send their children off to school, so the net value of a primary residence doesn't have to be included on the FAFSA. Parents owning an apartment building or other rental property, however, need to list the net worth of the income property. Any secondary residences, such as vacation homes, are also considered assets, so note the net worth of any additional property over and above the primary residence.

Assets That Aren't Considered

A number of other assets should not be listed on the FAFSA. Retirement accounts are meant to be tucked away for later on in life, so don't include them as assets. The FAFSA also isn't interested in having parents cash out their life insurance for their children's education, so don't include that information. Other assets students and parents can leave off of the application include the value of cars and other vehicles, such as boats or motorcycles.

About the Author

Based in Pennsylvania, Emily Weller has been writing professionally since 2007, when she began writing theater reviews Off-Off Broadway productions. Since then, she has written for TheNest, ModernMom and Rhode Island Home and Design magazine, among others. Weller attended CUNY/Brooklyn college and Temple University.

Photo Credits

  • Creatas/Creatas/Getty Images