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Investments include real estate, but not the home you live in; trust funds, Uniform Gift to Minors Act UGMA account or Uniform Transfer to Minors Act UTMA account, money market funds, mutual funds, certificates of deposit, stocks, stock options, bonds, other securities, installment and land sale contracts, including mortgages held and commodities. Investments also include qualified educational benefits or education savings accounts such as Coverdell savings accounts, college savings plans and the refund value of prepaid tuition plans.

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Students who report parental information must report accounts owned by the student and all accounts owned by the parents for any member of the household in question Investment value is the current market value as of today. Investment debt refers to debt associated with any investment.

How to Report Stocks on the FAFSA

Do not include the home you live in, the value of life insurance and retirement plans as investments k plans, pension funds, annuities, non-education IRAs, Keogh plans or cash, savings and checking accounts already reported in questions 41 and Otherwise, the asset value will be based on the most recent account statement.

Reportable assets are based on the net worth, after subtracting any debts that are secured by the asset.

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Debts that are not secured by the asset do not affect the net worth. For example, if a family uses a home equity loan on the family home to buy a second home, the home equity loan reduces the net worth of the family home, not the second home. A line of credit, however, is not reported as an asset.

Thus, the proceeds from the sale of the family home count as an asset on the FAFSA unless they are in escrow for the purchase of a new home. The intention to buy a new home is not enough. Whole life and cash value life insurance policies are sheltered as retirement plans, but they are bad investments. The return on investment is inferior, they have high surrender charges and high sales commissions. The interest is also not deductible. Unpaid interest may eventually count as taxable income. For example, bequests from a will are not reported as assets if the will is being challenges or the estate has not yet been settled.

The CSS Profile counts all plans that list the student as a beneficiary. The main exception involves a court-ordered trust to pay for future medical expenses of an accident victim.

It is reported as a business asset only if it is owned by the business and the business provides additional services beyond renting the property, such as maid service or a bed and breakfast. Treating rental real estate as a business matters on the FAFSA, not just because of the small business exclusion, but also because business assets are partially sheltered if the small business exclusion does not apply. See also: How 7 different assets can affect your financial aid eligibility.

Increasing contributions to qualified retirement plans can transform reportable assets into non-reportable assets.



Contributions during the base year will not reduce reportable income, since the contributions will still count as part of total income i. Contributions to a qualified annuity may be one of the most flexible ways of sheltering an asset. Financial aid application forms do not consider debt as offsetting assets, except to the extent that the debt is secured by an asset, such as margin debt in a brokerage account.

Stocks and Fafsa? : stocks

So, using a reportable asset to pay down non-reportable debt, such as credit card debt and auto loans, will make the reportable asset disappear from the perspective of the financial aid formula. However, if a college caps net home equity on the CSS Profile and the home equity already equals or exceeds the cap, then additional prepayment of the home mortgage will reduce reportable assets on the CSS Profile.

It may also be beneficial to accelerate necessary expenses, so that the money is spent before the FAFSA is filed. For example, if the parents anticipate needing a new car, a new furnace or a new roof, spending the money sooner may increase eligibility for need-based financial aid. Of course, this strategy should be used only for expenses that the parents were planning on spending anyway.

If the student is a dependent student, moving the money into a custodial plan account will cause it to be reported as a parent asset on the FAFSA.