filing-the-fafsa-2015-2016-edition

Filing the FAFSA 143
• Qualified retirement plans and the net worth of the family home are not reported as assets on
the FAFSA. Do not include these assets in the response to the question about the net worth of
investments.
• College savings plans of siblings (and the student) are reported as assets of the parent if the
custodial parent is the account owner. This includes 529 College Savings Plans, Prepaid Tuition
Plans and Coverdell Education Savings Accounts.
• If a noncustodial parent, grandparent, aunt, uncle or other relative is the owner of a college savings
plan, do not report it as an asset on the FAFSA (but do report it on the CSS/Financial Aid PROFILE
form). Distributions from such a college savings plan, however, are reported as untaxed income to
the beneficiary (the student).
• Assets are reported on the FAFSA as an asset of the account owner, not the beneficiary. The only
exception is for custodial college savings plan accounts, which are reported as a parent asset on the
FAFSA if the student is a dependent student.
• Rental properties are normally reported as investment assets, not business assets, unless they are
part of a formally recognized business.
• Applicants who qualify for the simplified needs test should ask their colleges if assets should be
reported. Some states and colleges use asset information when determining eligibility for state and
institutional aid funds.
Errors Involving Dependency Status
• Some students have difficulty with date arithmetic and get confused by the question that asks
whether they were born before January 1. If the birth year is less than the year specified in this
question, answer “Yes.”
• Students who served on active duty for training purposes are not considered veterans for federal
student aid purposes. Members of the National Guard or Reserves who have not been called to
national active duty are not considered veterans. Likewise, ROTC students are not considered
veterans.
• If a student serves on active duty, even for one day, and was discharged with a character of service
other than “Dishonorable,” the student is considered a veteran for federal student aid purposes.
Note that a student who has a character of service of “Under Other than Honorable Conditions” is
considered a veteran for federal student aid purposes.
• If a student has a child, but the child receives more than half his or her support from the student’s
parents, the student is not considered to have a legal dependent other than a spouse.