FAFSA question about Assets

Paying for College
1

<p>The CSAC reported that i did not qualify for CAL Grant A due to “Reported Assets Over the Ceiling.” which is odd because i thought i would qualify. i believe that i may have submitted the assets incorrectly. So i just have questions about what specifically these questions are asking and what to include and not include. Thank you</p>

<li><p>What is the net worth of your parents’ current investments? (stocks?)</p></li>
<li><p>What is the net worth of your parents’ current businesses and/or investment farms?</p></li>
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2

<ol>
<li>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 prepaid tuition plans, installment and land sale contracts (including mortgages held), commodities, etc. Do not include the value of life insurance and retirement plans (401[k] plans, pension funds, annuities, non-Education IRAs, Keogh plans, etc.).</li>
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<p>Your parents must report in Question 92 all qualified educational benefits or education savings accounts, including Coverdell savings accounts, 529 college savings plans, and the refund value of 529 prepaid tuition plans that they own for any member of the household. This includes accounts owned by the dependent student.</p>

<p>Investment Value - Investment Debt = Net Worth of Investments</p>

<p>If your parents own real estate or investments other than their principal residence, the value equals the amount they are worth today.</p>

<p>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.</p>

<p>Subtract the amount of debt on these assets from their value. Indicate this amount in Question 92 for net worth of investments.</p>

<ol>
<li>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.</li>
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<p>Business/Farm Value - Business/Farm Debt = Net Worth of Business/Farm</p>

<p>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.</p>

<p>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.</p>

<p>Subtract the amount of debt from the value. Indicate this amount in Question 93 for net worth of business and/or investment farm.</p>

<p>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.</p>

<p>[Completing</a> the FAFSA 07-08/The Application Questions(78)](<a href=“http://studentaid.ed.gov/students/publications/completing_fafsa/2009_2010/ques5-2.html]Completing”>http://studentaid.ed.gov/students/publications/completing_fafsa/2009_2010/ques5-2.html)</p>

<p>(link says 07-08, but the web page is for 09-10)</p>

3

<p>if my family business has less than 100 employees, do i include the net worth of the business in #91. What is your parents’ total current balance of cash, savings, and checking accounts?</p>

4

<p>No. You don’t report the worth of the business at all. The point of not reporting the worth is to not report it.</p>

5

<p>“Investment debt means only those debts that are related to the investments.”
what if second property was purchased with personal loans from friends and family instead of a bank loan for various reasons. I know technically this does work, but are those loans justifiable to count as debt related to the investment. Where does it say the associated debt has to be a mortgage? - thanks</p>