https://www.edvisors.com/fafsa/secrets/minimize-impact-of-assets/
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Student Aid Secrets: Minimize the Impact of Assets
Summary: Assets can impact your eligibility for financial aid. This article helps you understand how
assets are assessed and what you can do to minimize the impact of your assets.
When you file your FAFSA (and some other financial aid forms, like the CSS/Financial Aid PROFILE),
you’ll have to answer a series of questions about both your income and your financial assets. (If you’re a
dependent student, you’ll also be asked about your parents’ income and assets.)
In most cases, income and assets both play a role in determining your eligibility for financial aid —
especially need-based aid. In some cases, you may be able to increase your eligibility for need-based aid
by considering different financial strategies, such as repositioning assets, paying off debt, or accelerating
necessary expenses.
Reportable vs. Non-Reportable Assets and Debts
The first thing to understand is that when it comes to the FAFSA, some types of assets have to be reported
— and others don’t.
(Note: Some students and parents aren’t even required to answer the questions about assets. You’ll get a
pass if you are below the income threshold for the year and file certain types of tax returns. Certain states,
like California, do require you to answer questions about assets to determine eligibility for state aid, even
if you aren’t required to answer those questions for federal aid purposes.)
Reportable assets (you are required to list these on your FAFSA):
• Your cash on hand — and whatever you have in your checking and savings account(s) as of the
date you file the FAFSA.
• Other financial assets/investments, such as brokerage accounts, certificates of deposit (CDs),
stocks, bonds, mutual funds, money market accounts, commodities, precious metals, the vested
portions of stock options and restricted stock units, exchange-traded funds (ETF), hedge funds,
trust funds, private equity, and other investments.
• Real estate (other than the family’s principal place of residence), real estate investment trusts
(REIT), loans held, installment contracts, trust funds, private equity, and other investments.
• Uniform Gift to Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA) accounts,
are reported as assets of the account owner (you, the student), not the custodian.
• College savings plans (529 college savings plans, prepaid tuition plans, and Coverdell education
savings accounts) are reported as an asset of the account owner, not the beneficiary.
Non-reportable assets (you are not required to list these on your FAFSA):
• The net worth of your family’s principal place of residence (the family home)
• The net worth of a family farm (if it is the family’s principal place of residence and you and/or
your parents materially participate in the farming operation)
• Any small businesses owned and controlled by your family (if it has less than 100 full-time or
full-time equivalent employees)
• Qualified retirement plans such as 401(k) plans, 403(b) plans, pension plans, annuities, traditional
IRAs, Roth IRAs, Keogh, SEP and SIMPLE plans