Word of the Day Wednesday: Asset
Each Wednesday, MEFA will feature a Word of the Day, where we'll highlight a word (or sometimes a phrase) related to the college planning process. This month, we're focusing on vocabulary related to the CSS/Financial Aid PROFILE®.
Today's Word of the Day is Asset.
An asset is a resource of monetary value. Both the CSS/Financial Aid PROFILE®, a financial aid application used by colleges that provide their own financial aid, and the FAFSA®, the federal government's financial aid application, request students and parents to report their assets.
There are differences between the assets reported on the FAFSA and PROFILE®, and families will need to report more asset information on the PROFILE® than on the FAFSA. Assets reported on the PROFILE® will include the following:
- Families will need to list the value of their cash, savings accounts, checking accounts, trust funds, CD's, stocks, bonds, and other investments
- Do you have a vacation home on the Cape or rental property somewhere? Information about any vacation, rental, or investment property will need to be reported. The PROFILE® will ask the value, debt, purchase price, and purchase year in order to calculate the equity in each property.
- The PROFILE® also requires the value, debt, purchase price, and purchase year of a family's primary residence. This is a major difference between the PROFILE® and the FAFSA, as this information is not requested on the FAFSA.
- In order to capture all assets belonging to parents, the PROFILE® will ask for any parent assets held in the names of siblings under age 19.
- And finally, the PROFILE® will request business and farm assets, requesting the current market value of any business or farm owned by the family.
You shouldn't include the value of any official retirement accounts, such as 401(k)s, 403(b)s, or IRAs, within parent assets. The PROFILE® will ask a separate question about the value of your retirement accounts, and you can include those totals there.
Why does this matter to you?
If you're a parent or student completing financial aid applications this fall and winter, you'll want to make sure that you understand each application question and that you accurately submit the requested information. If you would like to learn more about the PROFILE®, view our popular webinar recording. And if you come across specific questions you can't answer, contact us. We'll be happy to help via email at firstname.lastname@example.org or phone at 800.449.MEFA (6332).