Why Net Worth Matters for FAFSA
FAFSA uses your family's income and assets to calculate your Expected Family Contribution. Lowering your net worth can reduce this number and increase eligibility for need-based aid. Assets that count include cash, savings, investments, and real estate beyond your primary home.
Strategies to Reduce Reported Net Worth
Pay down high-interest debt, such as credit cards, to lower your net worth. Avoid selling investments at a loss just to reduce reported value, and do not move assets into protected categories. Use savings to pay reasonable expenses rather than holding large cash balances.
Limits, Exemptions, and Reporting Rules
Certain assets are exempt, including the value of your primary home and retirement accounts. Report only what FAFSA requires, and do not hide or misrepresent assets. For official guidance on what counts and how to report, see the Federal Student Aid website at https://studentaid.gov/h/apply-for-aid/fafsa/need.
