Reporting Debt on the FAFSA
Consumer debt is not on the FAFSA application. This means there is no place to include debt parents or students may have on credit cards, automobiles or student loans, to name a few. Having this type of debt will not be reported and therefore, regardless of amount owed, will not make the (EFC) Expected Family high or lower.
That being said, loan debt is considered on the FAFSA only if it is secured by an ASSET that may be reported on the FAFSA. Meaning, the value of the asset is reduced by the debt against the asset.
For example, lets say parents own a second home that is worth $200,000. They still owe $50,000 on the second property. So, $200,000 - $50,000 = $150,000. That asset reported on the FAFSA will be reduced by $50,000. This is how mortgage debt could come into play when completing the FAFSA. It may be represented in the asset portion only. Remember, do not count your primary place of residence as an asset. The debt on your primary home is not included on the FAFSA.
If you have questions about how to report income or assets on the FAFSA form, or need help filing your FAFSA, we are here to help. You can call (877) 272-4692 or schedule online at www.icansucceed.org/apt.
Jessica - ICAN Ankeny Center
Jessica - ICAN Ankeny Center
