What is the net worth of your parents’ investments?

What is the net worth of your parents’ investments?

This is question 89 on the paper Free Application for Federal Student Aid (FAFSA®) form.

The net worth of your parents’ current investments is the amount left over after deducting the debt from the value of each investment.

For example: Your parents own an investment property valued at $100,000; however, $75,000 in debt is owed on the property. The net worth of the investment is $25,000 ($100,000-$75,000 = $25,000).

If your parents own multiple investments, total the net worth amounts and report them as a lump sum.

For example: Your parents own two investment properties.

The first investment property is valued at $100,000. The debt that is owed on the property is $110,000.

To calculate the net worth, perform the following calculation:

(Value of Property) minus (Debt Owed on Property) = net worth

$100,000 – $110,000 = -$10,000

The net worth of this first investment property is considered $0, not negative value of $10,000.

The second investment property is valued at $200,000. The debt that is owed on the property is $100,000.

(Value of Property) minus (Debt Owed on Property) = net worth

$200,000 – $100,000 = $100,000

The net worth of this second investment property is $100,000.

If the net worth of the first investment property is $0 and the net worth of the second investment property is $100,000, then the amount to be reported for both properties is $100,000.

If your parents’ net worth value as of the day you submit your FAFSA® form is Enter
Ten million or more 9999999
Zero or less than zero 0

Round to the nearest dollar. Don’t include commas or decimal points.

Investments include real estate (don’t include the home in which your parents live); rental property (includes a unit within a family home that has its own entrance, kitchen, and bath rented to someone other than a family member); trust funds; Uniform Gifts to Minor Act (UGMA) and Uniform Transfers to Minor Act (UTMA) accounts; money market funds; mutual funds; certificates of deposit; stocks; stock options; bonds; other securities; installment and land sale contracts (including mortgages held); commodities; etc.

Note: UGMA and UTMA accounts are considered assets of the student and must be reported as an asset of the student on the FAFSA form, regardless of the student’s dependency status. Don’t include UGMA and UTMA accounts for which your parents are the custodian but not the owner.

Investments also include qualified educational benefits or education savings accounts, such as Coverdell savings accounts, 529 college savings plans, and the refund value of 529 prepaid tuition plans.

Note: Students who must report parental information on this form should report all qualified educational benefits or education savings accounts owned by the parents and/or the dependent student as part of the parental assets.

Investments don’t include the home in which your parents live; cash, savings and checking accounts; ABLE accounts; or the value of life insurance and retirement plans (401[k] plans, pension funds, annuities, noneducation IRAs, Keogh plans, etc.).

Investment value means the current balance or market value of these investments as of the day you submit your FAFSA form. Investment debt means only those debts that are related to the investments.

For more information about reporting investments, call the Federal Student Aid Information Center 1-800-4-FED-AID (1-800-433-3243; TTY for the deaf and hard of hearing 1-800-730-8913).

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