When filling out financial aid forms, you can expect to be called upon to present an accounting of your assets. But what counts as an asset on college financial aid forms? And do assets from parents hurt a child’s financial award eligibility? Here’s what you need to know.
What Assets Do Parents Need to List on College Financial Aid Forms?
Typically, if you have significant financial assets, you will most likely qualify for less aid. However, it is rare that having assets completely disqualifies your child from being eligible for financial aid. The college financial aid system considers how expensive college has become, and even parents with a combined six-figure income and substantial assets may be eligible.
As far as what assets you must list, this depends on the financial aid form in question. In order to receive financial aid, you’ll need to fill out the FAFSA application. However, if your child is applying to more selective colleges, you may also need to fill out what is called a CSS Profile, which is much more inclusive when it comes to what assets you need to disclose. For example, if you own a small business, you won’t have to include the business assets on the FAFSA, but you will on the CSS profile.
Is My Home an Asset I Should List on My Child’s Financial Aid Forms? What About Retirement Plans?
Home equity does not count against you on the FAFSA. However, you will need to include it in the CSS profile if the college or university requires that form. Investment products for your child — like College 529 plans and trust funds — will need to be recorded on the FAFSA. Retirement plans like 401Ks, IRAs and ROTH IRAs do not need to be included, but other investments, including checking accounts, savings accounts, mutual funds, stocks, bonds, CDs and money market accounts are assets that you must include. Also, the previous year’s contributions to your retirement accounts do count as income for purposes of filling out the FAFSA.
Ecliptic Financial Advisors Can Help Sort it All Out
Navigating the world of college financial aid and financial aid forms can be confusing and stressful. Ecliptic Financial Advisors can help. Our trained experts can help you sort out the right funding strategies to pursue and the right forms to fill out to help you pay for your child’s tuition. We encourage you to attend one of our free college funding workshops near you. Register online or give us a call at 732-502-9700 and start taking some of the stress out of paying for college.