Dear FAFSA®, Remind Me Again… What's an Asset?
The FAFSA requires parents and students to report the value of their assets, and we're often asked here at MEFA the exact definition of assets, at least according to the FAFSA. There are three main asset questions on the FAFSA, and we've included the fine print instructions of each below. Remember that net worth equals current value minus debt.
The first asset question asks for the total current value of cash, savings accounts, and checking accounts. As the question states, the FAFSA wants to know the balance sitting in these accounts on the day you submit the FAFSA, so check those figures and report them. Though feel free to pay your monthly bills first!
The second asset question asks for the net worth of investments, including real estate. However the question specifies that you should not report your primary home. What exactly is an investment? Report all of the following: any real estate outside of your primary home (include any unit within your primary home rented to anyone outside of your family that has its own entrance, kitchen, and bathroom), trust funds, UGMA & UTMA accounts (these are student assets), money market funds, mutual funds, CDs, stocks, stock options, bonds, other securities, and education savings accounts (these are parent assets). Investments do not include: your primary home, life insurance plans, or retirement plans.
The third asset question asks for the net worth of businesses and investment farms. However, any family farms or family businesses with 100 or fewer full-time employees don't need to be listed. What's a family farm or family business? One that your family (meaning folks directly related to you or related to you by marriage) owns and controls more than 50 percent. If you live on and operate a farm, don't list that either. When determining market value for this answer, take into account land, buildings, machinery, equipment, and inventory.
Have other asset questions? Feel free to give us a call or shoot us an email: 1-800-449-MEFA (6332), firstname.lastname@example.org. You can also take a stroll through our FAQs to learn more about the FAFSA on our website here.