Do I Include This on the FAFSA?
The Free Application for Federal Student Aid (FAFSA®) is the primary application used to determine financial aid eligibility, and it's required by every college and university in the country. Families often have questions about what's reported on the FAFSA, particularly when it comes to income and assets. We listed out the most common items asked about below and provided details on whether or not you need to report it. Keep in mind this is only guidance for the FAFSA, as the CSS Profile has different questions and may ask you to report on something the FAFSA excludes.
A Multi-Family Unit
If you own a multi-family unit, and live in one of those units, the net value (market value of the property minus any debt) of the units you don't live in should be reported as assets. You won't report the value of the unit in which you live.
Your unemployment compensation will be included in your Adjusted Gross Income on your federal income tax return, so you'll end up reporting it just as you would report your salary on the FAFSA in the taxable income section. Individuals with unemployment compensation often have differing levels of income from year to year, due to working one year and not working the next. It's advisable to contact the financial aid office at each college if your income level changes significantly, as it may affect your eligibility for financial aid.
Cars are not reported on the FAFSA
Boats are not reported on the FAFSA
Credit Card Debt
Credit card debt is not reported on the FAFSA
Life insurance is not reported on the FAFSA
Roth IRA Contributions
Contributions to a Roth IRA are not reported on the FAFSA.
Roth IRA Withdrawals
Distributions from a Roth IRA are reported as income on the FAFSA. The distributions are reported as taxable income or untaxed income, depending on whether they are included in Adjusted Gross Income or not.
A pension distribution is reported as income on the FAFSA.
Workers' compensation is not reported as income on the FAFSA.
The full amount of an insurance settlement distribution is reported if it appears on the tax return as taxable income, whether it was a lump sum or annual distribution.
Pretax Contributions to a Pension
Pretax contributions to a pension plan are not reported on the FAFSA, regardless of whether they are voluntary or involuntary.
Student Funds Earned Through a Co-Op
Student funds earned through a co-op are not reported on the FAFSA as income.
Artwork is not reported on the FAFSA
Jewelry is not reported on the FAFSA
Bank Account on Which You Are a Custodian
If your child has a custodial account set up by you, the custodial account is reported as an asset of your child, not you.
For a full overview of how to complete the FAFSA, watch our Understanding the FAFSA webinar. And feel free to email us at email@example.com with any questions you have as you navigate completing the application.