<p>Student is doing the investing NOT parents</p>
<p>Stocks are assets on your FAFSA. If you make money, assets go up…if you lose, assets go down. Thus it can affect FA…just depends if you make or lose a lot.</p>
<p>Trading results in income and losses which are included in the student’s AGI. Students have no income protection allowance on FAFSA, so if there’s a net positive income, 50% will be included in the student’s EFC. The student’s asset portion of FAFSA will include a snapshot of the open positions at the time FAFSA is filed. The net value of those positions, minus a $5250 asset protection allowance, is included at the rate of 20% in the student’s EFC.</p>
<p>Also stock trading will usually make you ineligible for the Simplified Needs Test because your parents (if you are claimed as a dependent) will not be able to file 1040A</p>
<p>"The net value of those positions, minus a $5250 asset protection allowance, is included at the rate of 20% in the student’s EFC. "</p>
<p>I thought the $5250 protection was for student income, not assets. I don’t think students have any asset protection.</p>
<p>Yes, it can. As others have said, just having the stocks is reportable as assets. Any realized gains in trading is income. It can definitely make a difference in EFC.</p>
<p>^^ yes, you’re right I had it backwards without my spreadsheet in front of me.</p>
<p>To restate:</p>
<p>Student income over the income protection allowance of $5250 is assessed at the rate of 50% for FAFSA.</p>
<p>Student assets have no protection allowance and are assessed at the rate of 20% for FAFSA.</p>