Financial Aid

Which Assets and Debts are Reported on the FAFSA?

Properly account for your FAFSA parent assets and debts to maximize aid eligibility.

Kathryn Knight Randolph

October 12, 2022

Which Assets and Debts are Reported on the FAFSA?
Learn more about parents and student assets on the FAFSA.
The Free Application for Federal Student Aid (FAFSA) asks about income as well as assets. However, certain types of assets are not reported on the FAFSA.

What is Considered an Asset on the FAFSA?

What you would consider an asset may not be considered a reportable asset on the FAFSA. Below, we provide a detailed look at which FAFSA parent assets are reportable as well as those that are not.

Reportable Assets


Your cash assets include all the money you currently have in savings and checking accounts – even money that you may have stuffed under the mattress.

Businesses or Farms

If you own, or have majority control, of a small business that employs less than 100 full-time employees, it must be reported on the FAFSA. This includes farms.

Investment Farms

Investment farms are also considered an asset on the FAFSA. An investment farm is defined as an agricultural business that is purchased and operated for financial gain.

Other Investments

Other investments that must be included on the FAFSA are real estate (i.e. homes besides the principal residence), UGMA (Uniform Gifts to Minors Act), UTMA (Uniform Transfers to Minors Act), stocks, bonds, certificates of deposit, etc.

Non-Reportable Assets

Principal Residence (including Farms)

For financial aid purposes, the home that is your principal residence is not considered an asset. As stated above, however, any other real estate that is owned will be assessed.

Custodian UGMA and UTMA Accounts

If your parents are the custodians, and not the owners, of a UGMA or UTMA account, they do not have to report these on the FAFSA.

Life Insurance

The funds in a life insurance policy are not considered an asset on the FAFSA.

ABLE Accounts

ABLE accounts are state-run savings programs for individuals living with disabilities. Like many of the assets listed here, they are not reported on the FAFSA.

Retirement Savings

For FAFSA filing purposes, retirement savings accounts include 401k plans, pension funds, annuities, noneducation IRAs, Keogh plans, etc.

Simplified Needs Test

The Simplified Needs Test makes it easy for families below a certain income threshold to complete the FAFSA. If they fall below this threshold, they don’t need to answer questions about parent or student assets. A family can qualify for the simplified needs test if the parents have an adjusted gross income under $50,000 and are eligible to file a simplified federal income tax return, such as an IRS Form 1040A or 1040EZ. The simplified needs test disregards all assets. If the family does not qualify for the simplified needs test, a portion of their reportable assets will be sheltered by an asset protection allowance. The asset protection allowance is based on the age of the older parent. For most parents of college-age children (median age 48), the asset protection allowance is about $3,700.

Strategically Positioning Your Assets

There is a way to strategically position your assets so that you appear more needy than you are. This is also known as maximizing aid eligibility. If you have credit card debt, auto loans, or a mortgage, use your existing cash to pay down that debt. Principal homes, automobiles, and credit card debt are not considered for financial aid eligibility. It should be noted here that you should never keep assets in the child’s name. This includes 529 college savings accounts. Student assets are scrutinized much more harshly when determining financial aid. Therefore, it’s best to save or have accounts in the parents’ names.

Strategic Spending of Your Assets

If you’re considering a big purchase soon, it’s best to do it before you’ll have to file the FAFSA. Again, this type of strategy will eliminate cash that you have on hand, increasing our chances of becoming eligible for financial aid.

You Might Also Like

Join Fastweb.
Match Instantly.

Become a member and gain exclusive access to our database of over 1.5 million scholarships.

I am a:
Parents: Complete the questions using your child's information
Please select a grade level
Please enter a valid zip code.

By clicking, I agree to the Terms & Conditions and Privacy Policy.