When completing your 2025-2026 FAFSA®, you’ll need to include financial details about yourself. If necessary, your parent, their spouse, or your spouse will also need to provide their information. The FAFSA will request income from the 2023 tax year, along with specific assets owned by you or those contributing. Anyone who provides their information on your FAFSA is referred to as a FAFSA Contributor. All of this data is used to determine your Student Aid Index (SAI). Here's a breakdown of what you need to know.
- Dependent students will need to provide financial information of their FAFSA® parent(s) and their FAFSA® parent's spouse, if applicable.
- Independent students, if married, will need to provide their spouse’s financial information. This will be reported in the student’s financial section.
- Single, independent students will need to only provide their own information.
What is the income limit for FAFSA®
There is no income limit to complete the FAFSA®. If your family makes a certain level of income, you may be correct to assume that you may not qualify for much, if any, need-based aid. But you don’t want to rule yourself out. Not all financial aid programs will have the same income criteria to qualify. And not all financial aid is need-based.
The FAFSA® is also used to help you apply for certain types of non-need-based aid. For example, Direct Unsubsidized Stafford Loan funds are non-need-based loans. And some colleges may require you to complete the FAFSA® to receive any type of aid, including merit aid.
Here’s the bottom line, unless you are planning on paying directly out of pocket, you should complete the FAFSA®.
The 2025-2026 FAFSA® will calculate your SAI based on the information provided in your FAFSA® from all required FAFSA Contributors. It is worth it to take the time to complete the FAFSA® to see if you qualify for federal student aid. If you are only interested in grants and are awarded federal student loans, you are able to decline any federal loan awards.
FAFSA® Tax Year
You may be wondering which tax year the FAFSA® uses. The 2025-2026 FAFSA will be asking for your 2023 tax information. If you have completed the FAFSA® in the past, you may notice significantly fewer questions in the financial section of the FAFSA®.
Federal Income and Tax Information
The 2025-2026 FAFSA® will require the FAFSA® applicant and each FAFSA® contributor to provide consent to have their income and tax information transferred from the IRS directly to the student's FAFSA®. This is not optional, it is mandatory if you want to be considered for federal student aid. If you will have multiple FAFSA® Contributors, each contributor will need their own FSA ID to complete the online application. You, as the applicant, are also required to have an FSA ID to complete the web application.
Beginning in December 2023, an FSA ID can be created by an individual who does not have an SSN. While there are citizenship requirements for federal student aid eligibility, the citizenship status of the parent or contributor is not a factor. In the past, parents without an SSN were unable to create an FSA ID and could not electronically sign their child’s FAFSA®.
Transfer Consent and Approval
Consent and approval to transfer, use and share your tax information directly into the FAFSA® is required. If the applicant or any contributor does not consent to the transfer of their federal tax information, the applicant (the student) will be ineligible for federal student aid – which includes federal grants, loans, and work-study. It does not matter if you, or a contributor on your FAFSA®, did not file a tax return, or filed a tax return outside of the US. It also does not matter if one or more of your FAFSA® Contributors does not have a social security number. The bottom line, all applicants and contributors must give consent and approval, or else the student will be ineligible for federal student aid. The Consent and Approval page is one of the first pages you will see on the FAFSA® web application. You can confirm the requirement in the text provided, as well as the Q&A on the same page.
Unless the FAFSA® application requires you to manually input your income information after you provide consent and approval to have your information transferred from the IRS, there is no way to manually input your information. For those who will not see an option to manually input, you may see a handful of questions about specific information from your 2023 tax return. The web application will not give you an opportunity to view your financial information, or to edit information transferred. Any changes or corrections will need to be handled by the student's financial aid office.
FAFSA® Contributors
FAFSA® contributors may include, depending on the student’s situation.
Potential FAFSA® Contributors for a Dependent Undergraduate student may include:
- The student
- The FAFSA® parent(s)
- The FAFSA® parent’s spouse
Potential FAFSA® Contributors for an Independent Undergraduate or Graduate student may include:
- The student
- The student’s spouse
Reporting of Federal Benefits Received
The FAFSA® will ask if the student/parent or anyone in their family received certain federal benefits at any time during 2023-2024. These include:
- Earned income tax credit (EITC)
- Federal housing assistance
- Free or reduced-price school lunch
- Medicaid
- Refundable credit for coverage under a qualified health plan (QHP)
- Supplemental Nutrition Assistance Program (SNAP)
- Supplemental Security Income (SSI)
- Temporary Assistance for Needy Families (TANF)
- Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
Identifying federal benefits received will not negatively impact the student’s financial aid.
Additional Tax Information
While the FAFSA® will rely on the information transferred from the IRS, it will ask additional questions that you may need your tax return to help you answer. The following questions must be answered and cannot be left blank. However, if the question is not applicable to you, you can indicated “$0”.
- IRA rollover into another IRA or qualified plan
- Pension rollover into an IRA or other qualified plan
- Amount of college grants, scholarships, or AmeriCorps benefits reported as income to the IRS
- Foreign Earned Income Exclusion
Significant Income Changes
If a FAFSA® contributor (e.g., student, parent(s), or spouse) has a significant change in income since their last filing, they will not be able to manually input their information. They will need to answer the questions as presented. Once the FAFSA® has been submitted, the student and/or parent will need to contact the financial aid office to discuss the changes in their financial situation. This is the only way to adjust reported tax information. Changes will be made at the discretion of the school.
FAFSA® Assets
One of the most popular FAFSA® topics is the impact of reporting assets on your FAFSA. Not everyone will be required to answer questions about assets.
What are considered assets on the FAFSA®?
The FAFSA will ask you for the total Net Worth of your reportable assets. Reportable assets do not include all assets. It’s important to understand what is considered a reportable asset.
- “Current Total of Cash, Savings, and Checking Accounts) requires the student, parent, and/or spouse, to report the current value of cash and bank accounts as of the day the FAFSA® is being filed.
- “Current Net Worth of Investments, Including Real Estate”
- Real estate, except for the home in which you live
- Rental property (includes a unit within a family home that has its own entrance, kitchen, and bath rented by someone other than a family member)
- Trust funds
- Uniform Gifts and Uniform Transfers to Minors Acts, UGMA and UTMA accounts
- Other financial assets/investments, such as, money market funds, mutual funds, certificates of deposit (CDs), stocks, stock options, bonds, other securities, installment and land sale contracts (including mortgages held, commodities, etc.
- College savings plans (529 college savings plans, prepaid tuition plans, and Coverdell education savings accounts). For a student who will not provide parent information, the account is owned by the student and/or the student’s spouse. If a student is providing parent information, the college savings plan is owned by the student or by the parents for any member of the household.
- Current Net Worth of Business and Investment Farms – it no longer matters if the business is a small business with less than 100 employees, or if the family lives full-time on a portion of the farm the family owns.
- Business and/or investment farm value which includes the market value of the land, buildings, machinery, equipment, inventory, etc. Business and/or investment farm debt only means debts which the business or investment farm was used as collateral.
- Annual amount of child support received.
Annual Child Support Received
You will be asked how much annual child support was received if you are;
- A parent of a dependent undergraduate student,
- An independent undergraduate student, or
- An independent graduate student.
You will be reporting total amount of child support received.
Non-reportable assets
Here are some assets that you are not required to list on the FAFSA®:
- The net worth of your family’s principal place of residence (the family home), even if it is part of a business or farm property.
- The value of qualified retirement plans such as 401(k) plans, 403(b) plans, pension plans, annuities, traditional IRAs, Roth IRAs, Keogh, SEP and SIMPLE plans.
- ABLE Accounts. An ABLE account is a tax-advantaged savings account for a disabled person and their family; its value does not count as an asset on the FAFSA®.
- Life insurance policies, including cash value or equity of a whole life insurance policy.
- Personal possessions, such as clothing, furniture, books, cars, boats, computer equipment and software, television and stereo equipment, music collections, jewelry, coin, stamp, art, and wine collections.
Note: Some of these assets do have to be reported on the CSS Profile™, including the net worth of the family home.
The law specifically highlights certain changes to assets or income as items that the financial aid administrator can adjust using professional judgment. These include:
- Excluding from family income or assets any proceeds or losses from a sale of farm or business assets of a family resulting from a foreclosure, forfeiture, bankruptcy, or liquidation; or
- Adjusting assets to consider additional costs incurred by the student because of a disability of the student, their dependent or spouse, or their parent or guardian.
How to calculate net worth for FAFSA®
For FAFSA® purposes, net worth is the value minus any debts owed against the asset.
Does FAFSA® look at savings account?
Yes, the FAFSA® does factor in your savings account. The FAFSA® will ask you to report all cash on hand. This means you will need to report the balance (on the day you are completing your FAFSA®) of all your bank accounts, including your saving account.
However, the FAFSA® does not access your bank account.
Do FAFSA® investments include retirement accounts
Yes, and no.
The yes part. The FAFSA® will ask you to report untaxed income (for the respective tax year), which includes voluntary contributions to your retirement accounts. This includes the amounts you voluntarily contributed to your retirement accounts, like a 401(k), 403(b), IRA, or TSP plan. It doesn’t include any mandatory contributions, or contributions made by your employer.
The no part. Your retirement account balance is not reported as an asset on the FAFSA®.
Do I Need to Report Parent Financial Information?
- If you are a dependent undergraduate student: Yes, you will need to report parent financial information for your FAFSA® parent(s).
- If you are an independent undergraduate student: No, you are not required to report parent financial information. But you will be required to provide your spouses' financial information if you are married.
- If you are an independent graduate student: No, you are not required to report parent financial information. But you will be required to provide your spouses' financial information if you are married.
MORE>>>Who is My Parent When I Fill Out the FAFSA®?
FAFSA® Guardian Income
If you are asking about reporting financial or income information of a legal guardian, or other guardian (like a grandparent, aunt, foster parent, sibling, etc.), they are not considered your FAFSA® parent and you would not report their financial information.
If you are in a legal guardianship, you want to make sure you answered your dependency status questions accurately. If you did answer the questions correctly, and the FAFSA® has classified you as a dependent student, you will need to provide parental information. You will then need to determine who your FAFSA® parent is and determine if they are willing to help you complete your FAFSA®. If they are not willing to provide you with information, or there are other reasons you are not able to contact them, you will be able to note that in your FAFSA®. Your application will be flagged and you will need to provide additional information to your financial aid office.
MORE>>>Legal Guardian, and Other Guardian Situations
FAFSA® and 529 Plans
When it comes to college savings plans, including 529 plans, this can get tricky. In most cases, you will report your 529 plan in some way at some point.
529 Plan Impact on FAFSA®
The owner and beneficiary of a 529 plan play big factors into the way they are reported.
Impact of 529 plans in parent’s name
A 529 plan owned by your FAFSA parent (a parent providing FAFSA® information on your FAFSA®) will be reported on the FAFSA® as a parent asset.
A 529 plan owned by a parent who is not providing information on the FAFSA®, will not be reported on the FAFSA®.
Impact of 529 plan in student’s name
If you are a dependent student, you will report this asset as a parent asset on your FAFSA®.
If you are an independent student, you will report this as a student asset on the FAFSA®.
Impact of 529 plans in the grandparent’s name
A 529 plan owned by a grandparent (or any other family member who did not provide information on your FAFSA®), will not be reported on the FAFSA®.
Will my 529 plan hurt financial aid eligibility?
If the 529 plan is owned by a grandparent, or other family member who is not reporting information on the FAFSA®, and the student receives a qualified distribution, the 529 plan, or the distribution, will not impact the student’s financial aid eligibility.
You should consult a certified financial planner, or legal advisor before making any changes to your 529 plan to increase your financial aid eligibility.
Reducing the Impact of Assets and Income on Your FAFSA®
An important thing to keep in mind. Families with enough assets to affect the student’s eligibility of need-based aid, will likely have enough income to affect the student’s eligibility for need-based aid before assets are even considered.
There is a lot of advice out there, from spending down your savings, to shifting assets. Some of these fixes can create other issues. The short-term solution to pay for college can have long-term consequences. If you want to see if there’s an option that makes sense for you and your family, it’s best to discuss your situation with a certified financial planner or legal advisor.
If you want to run some numbers, you can always use the Federal Student Aid Estimator offered by the U.S. Department of Education. You can input different scenarios and see the impact on your estimated expected family contribution.
