49. At the beginning of the 2007-08 school year, will you be working on a master's or doctorate program (such as an MA, MBA, MD, JD, Ph.D., EdD, or graduate certificate, etc.)? You should answer, "Yes" if you will be enrolled in a master's or doctorate program in the initial term you attend in 2007-08. If you will be finishing your bachelor's degree in the initial term of the school year and then moving on to a master's or doctorate you should first answer Question 49 as "No." Once you have completed the undergraduate degree, this Question should be corrected to "Yes" and resubmitted. You should also notify your FAA.
A graduate or professional student is not eligible for a Federal Pell Grant, an ACG Grant, a National SMART Grant, or Federal Supplemental Educational Opportunity Grant, so if you incorrectly report that you are a graduate or professional student, you will need to correct this answer to receive any of these federal grants as an undergraduate student who is otherwise eligible.
50. As of today, are you married? Answer "Yes" if you are legally married on the date you complete the application. As previously stated under the instructions for Question 16, marital status cannot be projected. "Married" does not mean living together unless your state recognizes your relationship as common-law marriage. Answer "Yes" if you are separated but not divorced.
51. Do you have children who receive more than half of their support from you? "Support" means financial support. An applicant whose unborn child will be born before the end of the award year (June 30, 2008) may answer "Yes." Note that the financial support is the issue here; it does not matter whether the child lives with you or not.
52. Do you have dependents (other than your children or spouse) who live with you and who receive more than half of their support from you, now and through June 30, 2008? Again, the FAFSA is asking about financial support. In this question, the people supported must live with you throughout the award year.
53. Are (a) both of your parents deceased or (b) are you (or were you until age 18) a ward/dependent of the court?You should answer, "Yes" if both of your parents are deceased and you don't have an adoptive parent. If both your parents are deceased but you have a legal guardian, you should still answer, "Yes" to this question.
Answer "Yes" if you are currently a ward/dependent of the court or were a ward/dependent of the court until age 18.
You are not considered a ward/dependent of the court based solely on emancipation (when a child is released from the control of a parent or guardian) or incarceration.
54. Are you currently serving on active duty in the U.S. Armed Forces for purposes other than training? Answer "Yes" if you are currently serving in the U.S. Armed Forces or are a National Guard or Reserves enlistee who is on active duty for other than state or training purposes. Answer "No" if you are a National Guard or Reserves enlistee who is on active duty for state or training purposes.
55. Are you a veteran of the U.S. Armed Forces? You should answer "Yes" if
- You have engaged in active duty in the U.S. Armed Forces (Army, Navy, Air Force, Marine Corps, or Coast Guard), or you were a member of the National Guard or Reserves who was called to active duty for purposes other than training, or you were a cadet or midshipman at one of the service academies, and
- You were released under a condition other than dishonorable. Box 24 of the DD214 indicates the "Character of Service." If anything other than "dishonorable" appears in that box, you should answer, "Yes" to this question, as long as you were called to active service. There is no minimum amount of time the student has to have served to be considered a veteran for federal student aid purposes, but the service does have to be considered "active service." If "dishonorable" appears in box 24, you must answer "No" to Question 54.
You should also answer "Yes" if you are not a veteran now but will be one by June 30, 2008.
You should answer "No" (you are not a veteran) if
- You have never engaged in active duty in the U.S. Armed Forces,
- You are currently an ROTC student or a cadet or midshipman at a service academy, or
- You are a National Guard or Reserves enlistee activated only for training purposes.
Note that if you are currently serving in the U.S. Armed Forces and will continue to serve through June 30, 2008, you should answer "No" to this particular question.If you answered "Yes" to any of the questions 48-55, you should now skip to Question 90. If you answered "No" to every one of these questions, continue with Question 56. If you are a health professions student, your school may require you to complete Questions 56-89 even if you answered "Yes" to any of the dependency questions.
Questions 56-89 (Dependent applicants must complete)
Purpose: Your parents must provide financial information for Questions 56-89 if you are a dependent student (i.e., if you answered "No" to every question from 48-55). The EFC calculation, determined by congressional formula, uses information from this part to determine what portion of your parents' income and assets should be available to contribute to your educational cost of attendance.
Who is Considered a Parent?
The term "parent" is not restricted to biological parents. There are instances (such as when a grandparent legally adopts the applicant) in which a person other than a biological parent is treated as a parent, and in these instances, the parental questions on the application must be answered, since they apply to such an individual (or individuals).
If your parents are both living and married to each other, answer the questions about both of them.
If your parents are living together and have not been formally married but meet the criteria in their state for a common-law marriage, they should report their status as married on the application. If the state does not consider their situation to be a common-law marriage, then you should follow the rules for divorced parents. Check with the appropriate state agency concerning the definition of a common-law marriage.
A foster parent, legal guardian, or a grandparent or other relative is not treated as a parent for purposes of filing a FAFSA unless that person has legally adopted the applicant. An adoptive parent is treated in the same manner as a biological parent on the FAFSA.
If one, but not both, of your parents has died, you should answer the parental questions about the surviving parent. Do not report any financial information for the deceased parent on the FAFSA. If the surviving parent dies after the FAFSA has been filed, you must submit a correction to Question 53, thus updating your dependency status to independent, and correct all other information as appropriate (e.g., you will no longer fill out Questions 56-89). If the surviving parent is remarried as of the date you complete the FAFSA, answer the questions about both that parent and the person he or she married (your stepparent).
If your parents are divorced (or separated - see below for more information), answer the questions about the parent you lived with more during the 12 months preceding the date you complete the FAFSA. If you did not live with one parent more than the other, give answers about the parent who provided more financial support during the 12 months preceding the date you complete the FAFSA, or during the most recent year that you actually received support from a parent. If this parent has remarried as of the date you fill out the FAFSA, answer the questions on the remaining sections of the FAFSA about that parent and the person he or she married (your stepparent).
If your parents are legally separated, the same rules that apply for a divorced couple are used to determine which parent's information must be reported. A couple doesn't have to be legally separated in order to be considered separated for purposes of the FAFSA. The couple may consider themselves informally separated when one of the partners has left the household. If the partners live together, they can't be considered informally separated.
A stepparent is treated in the same manner as a biological parent if the stepparent is married, as of the date of application, to the biological parent whose information will be reported on the FAFSA, or if the stepparent has legally adopted you. There are no exceptions. Prenuptial agreements do not exempt the stepparent from providing required data on the FAFSA. Note that the stepparent's income information for the entire base year, 2006, must be reported even if your parent and stepparent were not married until after the start of 2006, but were married prior to the date the FAFSA was completed.
56. Parents' marital status as of today. The FAFSA asks about parents' marital status because their marital status directly affects the treatment of income and assets in the EFC calculation. Your parents must report their marital status as of the date the application is completed.
57. Month and year your parents where married, separated, divorced, or widowed. Enter the month and year that your parents attained the status you selected in Question 56.
58. Father's/stepfather's Social Security number. Enter your father's or stepfather's Social Security number (SSN) (that is, enter the information for the same person whose financial information you are reporting). All dependent applicants must provide the Social Security number of the parent providing financial data on the application. The Privacy Act statement on the FAFSA explains how his SSN can be used. If your father doesn't have a Social Security number, enter 000-00-0000. FAFSA on the Web filers should enter the numbers without dashes.
59-61. Father's/stepfather's last name, first initial, and date of birth. Enter your father's or stepfather's last name, first initial and date of birth (that is, enter the information for the same person (in #58) whose financial information you are reporting). Use the name found on his Social Security card. Your father's or stepfather's SSN, last name, and first initial on the application must match the number and name on his Social Security card. For information on how to update or correct the name on his Social Security card, he can call the Social Security Administration (SSA) at 1-800-772-1213 or go to the SSA's Web site at www.ssa.gov.
62. Mother's/stepmother's Social Security number. Enter your mother's or stepmother's Social Security number (SSN) (that is, enter the information for the same person whose financial information you are reporting). All dependent applicants must provide the Social Security number of the parent providing financial data on the application. The Privacy Act statement gives information about how her SSN can be used. If your mother doesn't have a Social Security number, enter 000-00-0000. FAFSA on the Web filers should enter the number without dashes.
63-65. Mother's/stepmother's last name, first initial, and date of birth. Enter your mother's or stepmother's last name, first initial, and date of birth (that is, enter the information for the same person (in #62) whose financial information you are reporting). Use the name found on her Social Security card. Your mother's or stepmother's SSN, last name, and first initial on the application must match the number and name on her Social Security card. For information on how to update or correct the name on her Social Security card, she can call the SSA at 1-800-772-1213 or go to their Web site at www.ssa.gov.
66. Number in parents' household. The number of family members reported determines the amount of an allowance that protects a portion of the reported income and this amount is subtracted from your family's income in the EFC calculation. This allowance provides for basic living expenses for the household size you indicate in this question.
The following persons are included in your parents' household size:
- You (the student), even if you do not live with your parents
- Your parents (the ones whose information is reported on the FAFSA)
- Your parents' other children, if your parents will provide more than half of their support from July 1, 2007 through June 30, 2008 or if the other children could answer "No" to every question in Questions 48-55
- Your parents' unborn child, if that child will be born before July 1, 2008 and your parents will provide more than half of the child's support through the end of the 2007-08 award year (June 30, 2008). (If there is a medical determination of a multiple birth, then all expected children can be included.)
- Other people (including your children and/or your unborn child due before July 1, 2008), if they live with and receive more than half of their support from your parents at the time of application and will continue to receive that support from July 1, 2007 through June 30, 2008.
To determine whether to include children in the household size, the "support" test is used (rather than a residency requirement) because there may be situations in which a parent supports a child who does not live with the parent, especially in cases where the parent is divorced or separated. In such cases, the parent who provides more than half of the child's support may claim the child in his or her household size. It does not matter which parent claims the child as a dependent for tax purposes. If your parent receives benefits (such as Social Security or Temporary Assistance for Needy Families (TANF) payments) in the child's name, these benefits must be counted as parental support to the child.
Support includes money, gifts, loans, housing, food, clothes, car payments or expenses, medical and dental care, and payment of college costs.
67. Number of college students in parents' household. This question asks about the number of household members who, in 2007-08, are or will be enrolled in a postsecondary school. Count yourself as a college student. Include others only if they will be attending at least half time in an approved program during 2007-08 that leads to a degree or certificate at a postsecondary school eligible to participate in any of the federal student aid programs. Do not include your parents. Also do not include a student at a U.S. military academy because the family is not expected to contribute to their academy student's postsecondary education.
The number of family members in college directly affects your family's ability to contribute to your education costs. For a dependent student, the parents' contribution to the EFC is divided by the number of family members (excluding parents) in college.
68. State of legal residence. Indicate the two-letter abbreviation for your parents' current state of residence. Your parents' residence is their true, fixed, and permanent home. If your parents are separated or divorced, use the state of legal residence for the parent whose information is reported on the form. Use the State Abbreviations list to provide the abbreviation for your parents' state of legal residence. If your parents live in a foreign country, enter "FC" in the state abbreviation space.
69. Legal resident before 2002. States have varying criteria for determining whether you are a resident for purposes of state financial aid. However, if you established a true, fixed, and permanent home in any state more than four years ago, you will meet the state's criteria. Select "Yes" if your parents became residents of their state before January 1, 2002 or "No" if your parents became residents of their state on or after January 1, 2002.
70. Date (month and year) of legal residence. If your parents did not become legal residents of their state before January 1, 2002, provide the month and year legal residency began for the parent who has lived in the state the longest.
71-75. Benefits your parents (or anyone in your parents' household received during 2006. If your parents received any benefits from any of the federal benefits programs shown in the boxes below, they should mark the ovals to the corresponding questions on the paper FAFSA or use the corresponding drop down menus online.
|71||Supplemental Security Income Program|
|72||Food Stamp Program|
|73||Free or Reduced Price School Lunch Program|
|74||Temporary Assistance for Needy Families (TANF)|
|75||Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)|
Instructions for Questions 76-83 (How to Complete the Income Tax Section)
It is best if your parents file their income tax return(s) before completing this application. However, if your parents have not completed their income tax return(s), they should calculate their adjusted gross income (AGI) and taxes paid using the instructions for the applicable IRS form. They can get the instructions and the appropriate form at a public library or download them in Portable Document Format (PDF) from www.irs.gov/formspubs/index.html.
When your application is compared with the tax return(s) your parents actually file, the financial information must agree. If there are differences, you may need to correct the information on the Web or send it back to the FAFSA processor. The time it takes to resubmit and reprocess corrected data could mean a delay in getting student financial aid.
Even if your parents are not required to file a 2006 income tax return, they will need to calculate their earnings for the year. They should use W-2 Forms and other records to answer the questions in this section.
If an answer is zero or a question does not apply to your parents, enter 0 (zero).
For the 2007-08 FAFSA, your parents' 2006 tax information will be used to answer the income tax questions. The income tax questions give 2006 IRS tax form line references.
Information from one of the following 2006 income tax forms may be listed on the FAFSA in the same manner as U.S. tax information: the income tax return required by Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia, or Palau. The amounts on these returns are already reported in U.S. dollars.
Income earned in a foreign country is treated in the same way as income earned in the U.S. Convert all figures to U.S. dollars, using the exchange rate in effect on the day you complete the FAFSA. Your parents can find information on current exchange rates at www.federalreserve.gov/releases/h10/update.
Your parents should also include the value of any taxes paid to the foreign government in the "U.S. income tax paid" line item. (If the income earned in the foreign country was not taxed by the central government of that country, the income should be reported as untaxed income on Worksheet B of the FAFSA and totaled in Question 85.)
In many cases, if your parents file a return with the IRS for a year in which foreign income was earned, a portion of the foreign income can be excluded on IRS Form 2555 for U.S. tax purposes. The figure reported on line 45 of Form 2555 (or line 18 of Form 2555EZ) should be reported on the "Foreign income exclusions" line on Worksheet B on page 5 of the paper FAFSA. (The worksheets, such as Worksheet B and others, that you will use to help you complete either a paper FAFSA or FAFSA on the Web, are also available online at www.fafsa.ed.gov.) The final total for Form 2555 must not be reported as untaxed income because it contains other exclusions.
76. Filing return. Indicate whether your parents have already completed, are going to complete, or will not file a tax return for 2006.
77. Type of return filed. Indicate which tax form your parents filed or will file for 2006.
78. Eligible to file a 1040A or 1040EZ. If your parents are eligible to file a 1040A or 1040EZ for 2006, they must indicate their eligibility to file one of these forms (even if they file a 2006 IRS Form 1040). Tax preparers often file a Form 1040 or an electronic 1040 on behalf of a tax filer, even though that person's income and tax filing circumstances would allow him or her to file a 1040A or 1040EZ.
In general, a person is eligible to file a 1040A or 1040EZ if he or she makes less than $100,000, does not itemize deductions, does not receive income from his or her own business or farm, and does not receive alimony. A person is not eligible to file a 1040A or a 1040 EZ form if he or she itemizes deductions, is self-employed, receive alimony, or is required to file Schedule D for capital gains. If your parents filed a 1040 only to claim Hope or Lifetime Learning credits and they would have otherwise been eligible to file a 1040A or 1040EZ, they should answer "Yes" to this question.
79. Adjusted Gross Income. Your parents must provide their adjusted gross income (AGI) for 2006. AGI is found on IRS 1040 â€” line 37; 1040A â€” line 21; or 1040EZ â€” line 4. If your parents have not completed a 2006 tax form, they should calculate their AGI using the instructions for the applicable IRS form. They can get the instructions and the form at a public library or download them in Portable Document Format (PDF) from www.irs.gov/formspubs/index.html.
Note that AGI includes more than just wages earned; it also includes, for example, interest, dividends, alimony, taxable portions of Social Security, and business income.
80. Income tax. Your parents should enter the amount of their 2006 income tax paid from IRS 1040 â€” line 57; 1040A â€” line 35; or 1040EZ â€” line 11. They should not copy the amount of federal income tax withheld from a W-2 Form. If they did not pay any income tax for 2006, they should enter zero (0).
81. Exemptions. Your parents should enter their exemptions for 2006. Exemptions are on IRS Form 1040 â€” line 6d or 1040A â€” line 6d. If your parents checked the "You" or "Spouse" box on 1040EZ â€” line 5, they should use EZ worksheet line F to determine the number of exemptions ($3,300 equals one exemption). If your parents didn't check either box on line 5, they should enter "01" if single or "02" if married.
If your parent is divorced, separated, or widowed, but he or she has filed or will file a joint tax return for 2006, he or she should give only his or her portion of the exemptions.
82. Father's/stepfather's income earned from working. When the Department's processor calculates your parents' contribution, certain allowances are deducted from your parents' income for required and necessary expenses (such as taxes and basic living costs). Your parents' income earned from work (wages, salaries, tips, combat pay) will be used in the EFC calculation as an income factor when no tax form is filed.
83. Mother's/stepmother's income earned from working. Use the instructions from Question 82 ("Father's/stepfather's Income Earned from working") as the guide to answer this question, reporting your mother's income this time.
If your parents filed (or will file) a 2006 tax return, each should include only his or her share from IRS Form 1040 â€” lines 7 + 12 + 18 + Box 14 of IRS Schedule K-1 (Form 1065); 1040A â€” line 7; 1040EZ â€” line 1. Even if your parents filed a joint return, they should report their earnings separately in Questions 82 and 83.
If your parents filed a tax return using other than an IRS form, such as a foreign or Puerto Rican tax form, they should report on the FAFSA the amounts (converted to U.S. dollars) from the lines of the non-IRS form that correspond most closely to those on the IRS forms.If your parents did not file a tax return, they should report their earnings from work in 2006. They can find this information on their W-2 form(s).
Question 84 - Worksheet A
Earned income credit. Enter the earned income credit from your parents' IRS Form 1040 â€” line 66a; 1040A â€” line 40a; 1040EZ â€” line 8a.
Additional child tax credit. Report the amount from your parents' IRS Form 1040 â€” line 68 or 1040A â€” line 41.
Welfare benefits (including Temporary Assistance for Needy Families [TANF]). Enter the total amount of welfare benefits your parents received, including TANF, in 2006. Report the amount they received for the year - not monthly amounts. Do not include the annual total value of food stamps or subsidized housing.
Untaxed Social Security benefits for all household members as reported in Question 66. If Social Security benefits were paid to your parents on your behalf (because you were under 18 years old at the time), those benefits are reported as your parents' income in the parent column, not your income in the student column.
Your parents must report benefits received on behalf of persons included in their household size as their income. However, if a member of your parents' household, such as an uncle or grandmother, receives benefits in his or her own name, your parents do not report those benefits in the total parental income.
The actual amount of benefits received for the year in question must be reported, even if that amount represents an underpayment or an overpayment that may be compensated for in the next year. This parallels the IRS treatment of overpayments of taxable income (such as salary) that must be reported and are taxed as any other income.
Payments to tax-deferred pension and savings plans. Your parents must report money paid into tax-sheltered or deferred annuities (whether paid directly or withheld from earnings), includingâ€”but not limited toâ€”amounts reported on the W-2 Form, in Boxes 12a through 12d, codes D, E, F, G, H, and S. They must include untaxed portions of their 401(k) and 403(b) plans. Note that employer contributions to tax- deferred pension and savings plans should not be reported on the FAFSA as an untaxed benefit.
IRA and other plans. Enter the amount of IRA deductions and payments to self-employed Simplified Employee Pension (SEP), Savings Incentive Match Plan for Employees (SIMPLE), and Keogh and other qualified plans. These plan payments can be found on IRS 1040 â€” total of lines 28 + 32 or 1040A â€” line 17.
Child support received. Report child support your parents received for all children during 2006. Do not include foster care or adoption payments.
Tax-exempt interest income. Enter the total amount of tax-exempt interest income your parents earned in 2006, as reported on Form 1040 â€” line 8b or 1040A â€” line 8b.
Foreign income exclusion. The IRS allows eligible U.S. citizens and residents living in foreign countries to exclude a limited amount of income earned abroad. Though deducted for tax purposes, this amount is considered untaxed income for federal student aid purposes. Provide the total amount of the foreign income exclusion your parents reported for 2006 from Form 2555 â€” line 45 or Form 2555EZ â€” line 18.
Untaxed portions of IRA distributions. This amount can be calculated from IRS Form 1040 (line 15a minus 15b) or 1040A (line 11a minus 11b). If the result is a negative number, enter zero.
Untaxed portions of pensions. This amount can be calculated from IRS Form 1040 (line 16a minus 16b) or 1040A (line 12a minus 12b). If the result is a negative number, enter zero.
The only exception to reporting IRA or pension distributions as income is when these distributions are rolled over to another IRA or retirement plan within 60 days following the day on which your parents receive the distribution from the initial IRA or retirement plan.
Special fuels credit. Enter the total amount of credit for federal tax on special fuels your parents reported in 2006, from IRS Form 4136 - line 20 (nonfarmers only).
Housing, food, and other living allowances. Housing, food, and other living allowances provided to your parents must be reported. These allowances must be reported when they are part of a compensation package that some people, particularly clergy and military personnel, receive for their jobs. Include cash payments and cash value of benefits. If your parents received free room and board in 2006 for a job that was not awarded as student financial aid, they must report the value of the room and board as untaxed income. (This category, "housing allowances," excludes rent subsidies for low-income housing.)
Veterans' noneducation benefits. Enter the total amount of veterans' noneducation benefits your parents received in 2006. Include Disability, Death Pension, Dependency & Indemnity Compensation (DIC), and/or VA Educational Work-Study allowances.
Other untaxed income and benefits. Your parents should include untaxed income or benefits not reported elsewhere on Worksheets A and B, such as worker's compensation, untaxed portions of railroad retirement benefits, untaxed portions of capital gains, Black Lung Benefits, Refugee Assistance, disability, foreign income that wasn't taxed by any government, etc. For parents whose W-2 Forms show combat pay, any untaxed portion of that pay must be reported on Worksheet B and the full amount must be reported as income earned from work. Do not include benefits from flexible spending arrangements (e.g., cafeteria plans), student aid, or Workforce Investment Act (WIA) (formerly JTPA) educational benefits.
Money received. Your parents should not report anything for this question.
Certain income and benefits should not be reported on Worksheets A and B:
- Combat Pay for non-tax filers. Parents who did not file a tax return must report any combat pay received as income earned from work in Question 82 or 83. None of it should be reported on Worksheet B. This is because income earned from work is used in place of adjusted gross income (AGI) for non-tax filers, so putting combat pay on Worksheet B in this case would yield a double-counting of funds.
- Food stamps and other programs. Benefits received from federal, state, or local governments from the following programs are not counted as untaxed income: the Food Stamp Program; Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); Food Distribution Program; Commodity Supplemental Food Program; National School Lunch and School Breakfast Programs; Summer Food Service Program; and Special Milk Program for Children.
- Dependent Assistance. Your parents may be eligible to exclude a limited amount of benefits received for dependent care assistance if certain requirements are met. Generally, up to $5,000 of benefits may be excluded from an employee's gross income, or $2,500 for a married employee who files a separate return from his or her spouse. This exclusion cannot exceed the employee's (or his or her spouse's) earned income. (Note: Some states provide reimbursement for childcare expenses incurred by welfare recipients through Temporary Assistance for Needy Families (TANF). Your parents must report this on the application because they bill the state for the amount of childcare costs incurred while on welfare and are reimbursed on that basis.)
- Per capita payments to Native Americans. Your parents should not report individual per capita payments received in 2006 from the Per Capita Act or the Distribution of Judgment Funds Act unless any individual payment exceeds $2,000. Thus, if an individual payment were $1,500, they would not report it on an application. However, if a payment were $2,500, they would report the amount that exceeds $2,000: $500.
- Heating/fuel assistance. Exclude from consideration as income or resources any payments or allowances received under the Low-Income Home Energy Assistance Program (LIHEAP). (Note: Payments under the LIHEAP are made through state programs that may have different names.)
Exclusions from taxed income. Because the items listed in this worksheet will be excluded from income when the Department's processor performs the EFC calculation, your parents should not subtract them from their responses to the income questions in from Questions 56-89. These amounts should be calculated on the basis of what was received between January 1 and December 31, 2006 and not what was received during the school year.
Education credits. The Hope and Lifetime Learning tax credits benefit students or parents who pay tuition and related expenses for attendance at least half time in a degree-granting program. These credits are subtracted directly from the total federal tax on a tax return. Enter the total amount of Hope and Lifetime Learning credits your parents received in 2006, from Form 1040 - line 50; 1040A - line 31. For more information about these tax credits, visit the IRS Web site at www.irs.gov/pub/irs-pdf/p970.pdf.
Child support payments. Report any child support payments your parents paid during 2006 because of divorce, separation, or legal requirement. Do not include support for children in your parents' household, as reported in the "number in household" question on the FAFSA (Question 66 for dependent students). For purposes of the FAFSA, a child is a member of your parents' household if your parents provide more than half of the child's support, whether the child lives with them or not.
Taxable earnings from need-based employment programs. These are earnings from any need-based employment programs including Federal Work-Study and need-based employment portions of fellowships and assistantships.
Student grants and other awards. Your parents should report any student grant and scholarship aid reported to the IRS in their AGI. This includes AmeriCorps benefits (awards, living allowances, and interest accrual payments), as well as grant and scholarship portions of fellowships and assistantships.
Questions 87-89 (Parent Asset Information Instructions)
An asset is defined as property that has an exchange value. The purpose of collecting asset information is to determine whether your family's assets are substantial enough to support a contribution toward your cost of attendance (COA). Only the net asset value is counted in the need analysis. To determine the net value of any asset, you first determine the market value of the asset and reduce the value by the amount of debt against that asset. The result is the net value of the asset.
Ownership of an asset
Ownership of an asset may be divided or contested in several situations:
- Part ownership of asset. If your parents own an asset with others and therefore only own a portion or percentage of the asset, they should report the net asset value that represents only their share of the asset owned. They would determine the current market value of the asset, reduce the value by any outstanding debt, and then multiply the net asset value by their ownership percentage. This result is then reported on the FAFSA.
- Contested ownership. An asset should not be reported if its ownership is being legally contested. For instance, if your parents are separated and they may not sell or borrow against jointly owned property that is being contested, the FAFSA information they report would not list any value for the property or any debts against it. If ownership of the asset is resolved after the initial application is filed, they may not update this information. However, if ownership of the property is not being contested, they would report the property as an asset.
- Lien against asset. If there is a lien or imminent foreclosure against an asset, the asset would still be reported on the FAFSA until the party holding the lien or making the foreclosure completes legal action to take possession of the asset. If the status of the property changes after the application is filed, you may not update the asset information.
Assets That Are Not Reported
Below are examples of assets that are not reported:
- Principal place of residence/family farm. Your parents' principal place of residence is not reported as an asset. Neither is their family farm if the farm is their principal place of residence and they "materially participated in the farm's operation."
- A small business with fewer than 100 employees. If your parents own and control a small business that has fewer than 100 full time or full-time equivalent employees, do not report the business as an asset.
- Personal possessions. Do not report possessions such as a car, a stereo, clothes, or furniture. By the same token, personal debts such as credit card debt cannot be reported.
- Pensions and Whole Life Insurance. The cash value or built-up equity of a life insurance policy (often referred to as a whole-life policy) isn't reported as an asset. The income distributed to the beneficiary must be reported as income.
- Excluded Assets From Native American Students. Do not report any property received under the Per Capita Act or the Distribution of Judgment Funds Act (25 United States Code [USC] 1401, et seq.), the Alaska Native Claims Settlement Act (43 USC 1601, et seq.), or the Maine Indian Claims Settlement Act (25 USC 1721, et seq.).
Rental properties. Generally, rental properties must be reported as investment assets rather than as business assets. To be reported as a business, a rental property would have to be part of a formally recognized business. (Usually such a business would provide additional services, such as regular cleaning, linen, or maid service.)
"Take-back" mortgages. In a "take-back" mortgage, the seller takes back a portion of the mortgage from the buyer and arranges for the buyer to repay that portion of the mortgage to the seller. For IRS purposes, the seller must report the interest portion of any payments received from the buyer on Schedule B of IRS Form 1040. If an amount is reported on Schedule B, the family should report the outstanding balance of the remaining mortgage on the FAFSA as an investment asset.
Trust funds. If trust funds are in your parents' names, they should be reported as their asset on the application. In the case of divorce or separation, where the trust is owned jointly and ownership is not being contested, the property and the debt are equally divided between the owners for reporting purposes, unless the terms of the trust specify some other method of division.
How the trust must be reported varies according to whether your parents receive or will receive the interest income, the trust principal, or both. If your parents receive only interest from the trust, any interest received in the base year must be reported as income. Even if interest accumulates in the trust and is not paid out during the year, if your parents will receive the interest, they must report an asset value for the interest they will receive in the future. The trust officer can usually calculate the present value of interest they will receive while the trust exists. This value represents the amount a third person would be willing to pay to receive the interest income your parents will receive from the trust in the future.
The present value of the principal is the amount a third person would pay at present for the right to receive the principal when the trust ends (basically, the amount that one would have to deposit now to receive the amount of the principal when the trust ends, including the accumulated interest). Again, the trust officer can calculate present value.
As a general rule, your parents must report the present value of the trust as an asset, even if their access to the trust is restricted as beneficiary/beneficiaries. If the creator of a trust has voluntarily placed restrictions on the use of the trust, then they should report the trust in the same manner as if there were no restrictions. However, if a trust has been restricted by court order, they should not report it as an asset. An example of such a restricted trust is one set up by court order to pay for future surgery for the victim of a car accident.
Parent Asset Information Questions
If your parents are eligible to skip these questions, but choose to answer them on the Web or on paper, answering these questions will not affect your eligibility for Federal Student Aid, such as Federal Pell Grant.
87. Total current cash on hand, and savings and checking account balances. Include the balance of your parents' savings and checking accounts as of the date the FAFSA is completed. Do not include student financial aid.
88. Net worth of investments. Net worth means current value minus debt. Investments include real estate such as rental property, land, and second or summer homes. Do not include your parents' primary home. Include the value of portions of multifamily dwellings that you own, except that you must exclude the portion of the value of a dwelling that is your parents' principal residence. Investments also include trust funds, Uniform Transfers to Minors Act (UTMA)/Uniform Gifts to Minors Act (UGMA) Custodial Accounts, money market funds, mutual funds, certificates of deposit, stocks, stock options, bonds, other securities, Coverdell savings accounts owned by your parents, 529 college savings plans, the refund value of 529 state prepaid tuition plans , installment and land sale contracts (including mortgages held), commodities, etc. Do not include the value of life insurance and retirement plans (pension funds, annuities, non-Education IRAs, Keogh plans, etc.).
Your parents must report in Question 88 all qualified educational benefits or education savings accounts, including Coverdell savings accounts, 529 college savings plans, and the refund value of 529 state prepaid tuition plans that they own. Your parents should not report any accounts owned by a dependent student in this question.
If your parents own real estate or investments other than their principal residence, the value equals the amount they are worth today.
Investment debt equals how much your parents owe on real estate and investments other than their principal place of residence. Investment debt means only those debts that are related to the investments.
Subtract the amount of debt on these assets from their value. Indicate this amount in Question 88 for net worth of investments.
89. Net worth of business and/or investment farm. Business or farm value includes the current market value of land, buildings, machinery, equipment, inventory, etc. Do not include your parents' primary home. Do not include the net worth of a family owned and controlled small business with not more than 100 full-time or full-time equivalent employees.
Business/Farm Value - Business/Farm Debt = Net Worth of Business/Farm
For business or investment farm value, first figure out how much the business or farm is worth today. An investment farm is a farming business where the parents do not reside on the farm, nor do they materially operate the farm.
Business or investment farm debts are what your parents owe on the business or farm. Include only debts for which the business or farm was used as collateral.
Subtract the amount of debt from the value. Indicate this amount in Question 89 for net worth of business and/or investment farm.
To report current market value for a business, your parents must use the amount for which the business could sell as of the date of the application. Also, if your parents are not the sole owners of the business, they should report only their share of its value and debt.
Questions 90 and 91 (Independent Students)
If you answered, "Yes" to any of the dependency questions (48-55), you will need to respond to both of these questions.
Purpose: The number of family members you report determines the allowance that will be subtracted from your family's income to provide for basic living expenses when the Department's processor calculates your EFC. The number of family members in college directly affects your family's ability to contribute to your education costs. Your EFC is divided by the number of family members in college.
90. Number in student's (and spouse's) household. The following persons are included in the household size of an independent student:
- Your spouse, excluding a spouse not living in the household as a result of death, separation, or divorce
- Your children, if they will receive more than half of their support from your household between July 1, 2007 and June 30, 2008
- Your unborn child, if that child will be born before July 1, 2008 and your household will provide more than half of the child's support from the projected date of birth to the end of the 2007-08 award year (June 30, 2008). (If there is a medical determination of a multiple birth, then all expected children can be included.)
- Other people, if they live with you and will receive more than half of their support from your household for the entire award year (July 1, 2007 through June 30, 2008)
To determine whether to include children in your household size, the "support" test is used (rather than a residency requirement) because there may be situations in which you support a child who does not live with you, especially in cases of divorce or separation. In such cases, the parent who provides more than half of the child's support may claim the child in his or her household size. It does not matter which parent claims the child as a dependent for tax purposes. If you receive benefits (such as Social Security or Temporary Assistance for Needy Families [TANF] payments) in the child's name, these benefits must be counted as parental support to the child.
Support includes money, gifts, loans, housing, food, clothes, car payments or expenses, medical and dental care, and payment of college costs.
91. Number of college students in household. This question asks about the number of household members who, in 2007-08, are or will be enrolled in a postsecondary school. Count yourself as a college student. Include others only if they will be attending at least half time during 2007-08 in an approved program that leads to a degree or certificate at a postsecondary school eligible to participate in any of the federal student aid programs.
92-96. Benefits you (or your spouse or anyone in your household) received during 2006. If you received any benefits from any of the federal benefits programs shown in the boxes below, you should mark the ovals to the corresponding questions on the paper FAFSA or use the corresponding drop down menus online.
|92||Supplemental Security Income Program|
|93||Food Stamp Program|
|94||Free or Reduced Price School Lunch Program|
|95||Temporary Assistance for Needy Families (TANF)|
|96||Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)|
Purpose: This section of the application allows you to list up to four schools on the paper FAFSA and up to six schools online that you are interested in attending. If you apply using FAFSA on the Web, you must list at least one school. The system offers a school code feature if you do not know the school code(s). If you are completing a paper FAFSA and do not know the school code(s), you can call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243) and they can give you that information to put on your application. We strongly encourage you to list the schools you are most interested in attending and from which you wish to receive financial aid.
The Department will send your information to all the schools listed. You should list each school's Federal School Code, which is explained in greater detail below. For purposes of federal student aid, it does not matter in what order you list the schools. However, to be considered for state aid, several states require you to list a state school first. Therefore, if you plan to list a state school in your state of residence as one of the schools in this section, you might want to list it first.
If you want information sent to more schools than allowed for on either the paper FAFSA or online version, there are several ways to make sure all the schools receive your data:
- You can give your Data Release Number (DRN), printed on the upper right-hand corner of the Student Aid Report (SAR) you receive after submitting your FAFSA, to a school you didn't list on your application. The school will use your DRN to get a copy of your application information electronically.
- You can list your original schools on the application, wait for your SAR to arrive in the mail, and then correct the SAR by replacing some or all of the original schools with other schools.
- You can call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243) and provide your Data Release Number (DRN) to request a change to your SAR to replace some or all of the original schools with other schools. You must receive your SAR before requesting these changes.
- You can add or delete schools on your FAFSA using the Web at www.fafsa.ed.gov. Select "Add or delete a School Code". Your PIN is required to access this information.
The FAFSA processor will send data to only the schools originally listed . For example, if you originally listed the maximum number of schools on the application and then replaced them with new schools by changing your SAR, only the second set of schools would get data from any corrections. If you made corrections to your FAFSA information at (or after) the time you listed the new schools, only the second set of schools would get the corrected data.
Federal School Code. The Department assigns a number called a Federal School Code to each school that participates in the federal student aid programs. For a school to receive your application data, you must list the school's Federal School Code. These codes are not in the FAFSA instructions; they are provided in the "Federal School Code List" that can be found at www.fafsa.ed.gov. High schools, colleges, and public libraries also have access to the Federal School Code List.
The Federal School Code begins with "0" (zero), "G," "B," or "E" and ends in five digits. Foreign schools may qualify to disburse aid, but some may not have Federal School Codes.
If you cannot get the Federal School Code, indicate clearly the complete name, address, city, and state of each college you are interested in attending. If a college is a branch campus, include the complete name of the branch. Also, indicate if it is a specific part of a university, such as the law school. Note, however, that your FAFSA will be processed faster if you provide the Federal School Code.
Either way, it is very important to indicate the correct Federal School Code, or-if not known-the full and correct name and address of the school so that it can be identified.
By answering the questions in the school listing section and signing the FAFSA, you give permission to the U.S. Department of Education to provide your application information to the school(s) listed. Schools will use your FAFSA information to determine the amount of your financial aid package. You should not indicate the name of a school if you do not want it to receive your information. If you leave these questions blank, the Department will not send your application information to any schools.Housing plans. For each school listed, indicate your housing plans by selecting the pull down menu on FAFSA on the Web or by filling in the oval (on the paper FAFSA) corresponding to your housing plans at that schoolâ€”on campus, off campus, or with parents.
Purpose: This part of the application asks for the date the application was completed (on the paper FAFSA), your signature, and your parent's signature if you are a dependent student. The questions are numbered 98-102 on the paper FAFSA. If you are completing a FAFSA on the Web application, you can sign your application electronically using your PIN, prior to beginning the application or at the end of the application. If you choose not to sign electronically, you can print a signature page and, sign and mail it to the U.S. Department of Education. Dependent students will also need to provide a parent's signature. Parent's can electronically sign the application using their PIN or the parent can sign the student's printed signature page.
Shown below is the numbered order of the Questions as they appear on the paper FAFSA:
98. Date this form was completed. If you apply on paper, fill in the month and day spaces using 2-digit numbers, e.g., "04" for April. Then fill in the appropriate oval for the year. Note that all information you report on the FAFSA must be accurate as of the date you complete the form. If you apply online, you automatically provide this information once you submit the completed application for processing.
99. Student and parent signatures. Students and parents will be able to sign electronically within the FAFSA on the Web application. The applicant (and a parent of a dependent applicant) must either use his or her PIN to provide an electronic signature on FAFSA on the Web or Renewal FAFSA on the Web or print out, sign, and submit a signature page, or (if completing a paper FAFSA) sign that FAFSA. If the proper signatures are not provided, the application will be entered into the processing system awaiting the proper signature(s). If the processor does not receive the signature(s) within 14 days, it will send the applicant a SAR showing the applicant was rejected for lack of signature(s). If the applicant (or parent, if applicable) signs the SAR and sends it back to us, processing will continue.
You (and anyone else who signs the form) certify that all information on the form is correct and that those who signed are willing to provide documents to prove that the information is correct. This information may include U.S. or state income tax forms that you filed or are required to file. You also certify that you will use federal and/or state student financial aid only to pay the cost of attending an institution of higher education, that you are not in default on a federal student loan or have made satisfactory arrangements to repay the loan, that you will notify your school if you default on a federal student loan, that you do not owe money back on a federal student grant or-if you do-have made satisfactory arrangements to repay it, and that you will not receive a Federal Pell Grant for attendance at more than one school for the same period of time.
Giving permission to state agencies to obtain income tax information and certifying your application data
By electronically signing FAFSA on the Web or signing the paper FAFSA, you also give permission to the state financial aid agency to which information is being sent to obtain income tax information for all persons required to report income and for all periods reported on this form. Finally, by electronically signing FAFSA on the Web or signing the paper FAFSA, you are certifying that the data you are providing the Secretary of Education is true and accurate as of the date signed. The Higher Education Act provides that the Secretary can verify certain student and parental data with the Internal Revenue Service (IRS) and other federal agencies to insure its accuracy.
You cannot submit a 2007-08 FAFSA on the Web application before January 1, 2007. Nor should you sign, date, or mail the paper version of the FAFSA before January 1, 2007. Note, that if you sign and submit the FAFSA before that date, we will process it (put it in the system), but you will receive a rejected SAR.
The information on this site was produced the US Department of Education and compiled by the site owners. We are not responsible for accuracy or truthfulnees- users should consult with a guidance counselor or visit the Department of Education's website for further information. Site design (c) 2007 giantific.com
More Information on Paying for College:
Student Loan Repayment
All About Student Financial Aid
Choosing a College