filing-the-fafsa-2015-2016-edition

Filing the FAFSA 95
and once as an asset. This is true. If the income is a one-time event that is not reflective of the family’s
ability to pay during the award year, such as an inheritance or life insurance settlement, the family can
ask the college financial aid administrator for a professional judgment review. Some college financial
aid administrators will make an adjustment to exclude such one-time events from income. However, the
money will still be counted as an asset.
Other Real Estate
While the family’s principal place of residence is excluded as an asset on the FAFSA, the net worth of
other real estate must be reported on the FAFSA. The net worth should be based on the current market
value of the real estate minus any debts secured by the real estate. Given the recent volatility in the real
estate market, the market value should be as up-to-date as possible.
There are several approaches to determining the current market value of real estate before subtracting the
mortgage debt.
The best approach is to obtain a current appraisal of the property from a licensed appraiser. A real
appraisal will cost a few hundred dollars and will be based on comparable sales. A similar approach is
used by web sites like Zillow.com.
One could also use the most recent assessment for the real estate, if assessments are based on up-todate
market valuations. Unfortunately, many counties use assessments that are not based on current
market values. Often, the assessments are out-of-date and may be unrelated to the current market value.
Assessments are used to determine property tax, not to determine a reasonable market value.
Another approach is to use House Price Index data from the Federal Housing Finance Agency (FHFA)
to derive a value for the residential property based on the purchase price and the year the property
was purchased. This table is based on the national All-Transaction Index. To use this table, multiply the
purchase price by the multiplier for the year of purchase. This will yield an estimate of the value of the
property in Q4 of 2013.
Year Multiplier Year Multiplier Year Multiplier Year Multiplier
1975 5.32 1985 2.56 1995 1.74 2005 0.92
1976 4.91 1986 2.39 1996 1.70 2006 0.88
1977 4.29 1987 2.26 1997 1.63 2007 0.89
1978 3.79 1988 2.14 1998 1.55 2008 0.95
1979 3.37 1989 2.03 1999 1.48 2009 1.01
1980 3.16 1990 2.01 2000 1.38 2010 1.02
1981 3.03 1991 1.94 2001 1.29 2011 1.06
1982 2.95 1992 1.90 2002 1.21 2012 1.05
1983 2.83 1993 1.85 2003 1.13 2013 1.00
1984 2.70 1994 1.82 2004 1.02