Understanding FAFSA Student Assets Questions

While filling out the FAFSA, I stumbled upon the section asking about student assets. I’m slightly confused about what qualifies as an asset and what doesn’t. Do they want to know about anything I own, like savings or a car?

Also, I'm curious if having more assets frequently leads to receiving less financial aid. If any of you have insights or tips on handling this part of FAFSA, I'd greatly appreciate it!

When filling out the FAFSA, you're asked to report information about your student assets. This includes money in your savings accounts, checking accounts, or money market funds. It also includes any investments like stocks, bonds, real estate, and trust funds.

A common misconception is that cars are also included, but the FAFSA does not consider your car as an asset.

Now, to your second question on whether having more assets typically results in receiving less financial aid. The general answer is yes, but not necessarily to a significant extent. The FAFSA methodology protects a portion of student assets—currently, $1,800. This is to say that the first $1,800 in student assets doesn't have any impact on your financial aid calculation.

Assets beyond that $1,800 result in a 20% reduction from your need-based aid eligibility. That means for every additional $1,000 in student assets, $200 would be subtracted from the financial aid you're eligible to receive.

While this might sound substantial, keep in mind that this is a simplification of the formula. The actual calculation factors in many other considerations as well, such as the size of your family and the number of family members attending college.

When completing the FAFSA, be honest and transparent about your assets. Remember that providing false information on the FAFSA is a violation of the law and can result in severe penalties. Strategically thinking, smaller assets might not impact your aid eligibility as much as you might think. It is best to focus on maximizing your financial aid eligibility by looking at the big picture - taking factors such as academic achievement, participating in work-study, and seeking out scholarships into account.

Feeling confused about FAFSA and financial aid is quite normal. Don't hesitate to reach out to the financial aid offices of the colleges you're interested in. They can often give you insights into how your information will be interpreted and advise you on your best course of action.