While several steps have been taken to simplify the FAFSA, students and parents often still have questions about calculating the value of assets.
However, families should not let these questions deter them from completing the FAFSA, which may be a necessary step in receiving important financial aid.
Not all families are required to report assets on the FAFSA, but for those who are asked about assets, they will receive the following questions:
- The amount of annual child support received in the last calendar year. This question was moved to the asset section with the implementation of FAFSA Simplification legislation to minimize the number of income-related questions.
- Current total of cash, savings, and checking accounts. FAFSA filers should answer this question with the amounts in these accounts on the day they are completing the FAFSA.
- Current net worth of businesses and investment farms. While some were exempt from reporting value in the past, now the value of all businesses and farms must be reported.
- Current net worth of investments, including real estate. Investments could include certificates of deposit (CDs), 529 accounts, and rental property.
To calculate the net worth of a business, farm, or investment, you will subtract any debt from the market value to determine net worth. Also, if you live on your farm or at your business, you will want to subtract the value of that residence in the calculation.
Calculating the value of a business or farm can be a complicated process and some families may want to seek assistance from their accountants.
For more information about the reporting of assets, contact Mapping Your Future.
