Filling out the FAFSA: What Assets Must be Listed

Free Application for Federal Student Aid
It's FAFSA season and for families with a student entering or returning to college in the fall of 2015, the latest FAFSA is now available at fafsa.ed.gov. The online version of the form has gotten much easier to complete over the years with more help boxes designed to assist along the way and with the addition of the IRS Retrieval Tool. I've been fielding many questions recently about what counts as parent assets on the FAFSA. Here are a few things to keep in mind:
Cash and savings must be reported on the FAFSA
  • While the family home is not included on the FAFSA, the net worth of other real estate must be reported.
  • Qualified retirement plans, such as 401(k) plans, 403(b) plans, pension plans,annuities, traditional IRAs, Roth IRAs, Keogh, SEP and SIMPLE plans do not need to be reported. However, if retirement money is not held in a qualified retirement plan, it must be reported as an asset on the FAFSA, even if the asset owner has already reached retirement age.
  • Life insurance policies, including cash value and whole life insurance policies do not need to be reported. Families completing the "other financial aid form" (the CSS Profile) will need to report these policies as assets.
  • Personal possessions, such as clothing, furniture, a car, computer equipment and software, television and stereo equipment do not need to be reported.  
  • Money must be reported as an asset, even if it is withdrawn from a bank account and stuffed in a mattress.
About one-third of FAFSAs are selected for verification, in which the applicant has to provide copies of documentation of the data reported (compare this to the IRS, which audits only about one percent of federal income tax returns). Keep in mind that intentionally providing false information on the FAFSA is fraud. The penalties may include fines, jail time, repayment of the financial aid received and some colleges even suspend or expel a student for providing false information on financial aid application forms.
Get help with the FAFSA

If you're not sure if an asset needs to be reported on the FAFSA, contact the Federal Student Aid Information Center at 1-800-4FED-AID (1-800-433-3243) or email them at FederalStudentAidCustomerService@ed.gov.