<b>On the asset section of the FAFSA form if you have $100,000 in
stocks but also have a $75,000 margin loan balance would you net this
out and put down $25,000 in stock assets?
— Rob A.
Yes. You report the net asset value, namely the current market value of the
assets minus any debts secured by the assets. Since a margin loan is
secured by the stocks you would report the difference ($25,000 in this
example) on the FAFSA. After all, if you were to liquidate the
brokerage account the brokerage would require you to pay off the
margin loan balance before disbursing the remaining money to you. So
only the net assets are available to you.
Note that the loan must be secured by the asset for it to be
subtracted from the asset value. If you had used a home equity loan to buy
the stocks instead of a margin loan you would have to report the full
value of the stocks ($100,000 in this example), since the home equity
loan is secured by your house, not the stocks. (If the house is your
principal place of residence you wouldn't be able to subtract the home
equity loan from the value of the house since the principal place of
residence is not reported as an asset on the FAFSA. If the house is a
vacation or rental property and not your principal place of residence,
on the other hand, the home equity loan would be subtracted from the
market value of the house when calculating the net worth of the home
because vacation and rental properties are reported on the FAFSA.)
The current market value of an asset is the market value as of the
application date. Practically speaking, however, the market value as
of the most recent brokerage account statement is sufficient.
I got married 4 months ago and my husband just lost his job! If I put
that I'm married would I get the full amount of financial aid? Or
should I just stay using my father's income?
— Lashunda W.
You don't have a choice. If you are married as of the date you submit
the FAFSA, you must complete the FAFSA as married.
The FAFSA cannot be updated for changes in the applicant's marital
status. It also cannot be based on an anticipated change in marital
status. If an applicant is planning on getting married the day after
submitting the FAFSA, the applicant must still complete the FAFSA as
single, and cannot change the marital status on that year's FAFSA
after submission. If the applicant wants to submit the FAFSA as
married, the applicant should wait until after the marriage to submit
the FAFSA.
Since your husband lost his job, you should ask the college for a
professional judgment review. If he provides them with a copy of a
recent (within 90 days) letter from the unemployment office or other
evidence that he's unemployed, the college can adjust the income on
the FAFSA to compensate for the job loss.
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