How to Report Parents’ Cash, Checking Accounts, and Savings Accounts Balances on the FAFSA

Filling out the Free Application for Federal Student Aid (FAFSA) has always been a chore for students and parents alike, but a necessary one at that. Part of the reason why it’s so difficult is because you’ll need to take full stock of your finances—and for parents with lots of accounts, that may not be so easy. 

That’s why you might be tripped up by question 40 of the FAFSA, which asks for the dollar amount of the parent’s assets. It’s not always clear what counts as an asset or not, and your answer can affect the student’s eligibility for financial aid. 

We’ll break down exactly how to answer question 40 of the FAFSA so you can move on with your college plans. 

How to answer question 40 of the FAFSA

Not everyone needs to report parental assets on the FAFSA. First, you’ll establish whether you’re a dependent student. Typically, parents of unmarried undergraduates below the age of 24 will need to complete this question. 

In the 2024-25 FAFSA, you’ll report parental assets on Question 40 of the FAFSA:

When it comes to reporting your assets, here are a few general rules to keep in mind for each of these three categories:

• Tally up each box for the day you submit the form—not from old financial statements.
• If you’re in the red regarding your total assets for a certain category, simply report it as “0” rather than a negative number. 
• If you’re lucky enough to have $10 million or more for a certain category, simply report it as “9,999,999” since larger amounts won’t fit in the box. 

What counts as current total of cash, savings, and checking accounts?

It’s usually pretty easy to calculate this first box since most people keep closer tabs on the money in their bank accounts. 

Remember to include any assets held at other banks, such as if you opened an account during the year to earn a bank sign-up bonus and any physical cash you have stuffed under your mattress or buried in the backyard. 

What counts as current net worth of investments, including real estate?

Things get a bit trickier for most people when it comes to the value of their investments, especially because the fine print actually excludes many types of investments. 

Parents should not list the following types of investment assets on question 40 of the FAFSA:

• Primary home
• Life insurance
• ABLE accounts
• Retirement plans, such as 401(k)s or IRAs
• Education savings accounts for other children, such as Coverdell or 529 plans

On the other hand, parents should list these types of investment assets:

• Taxable brokerage accounts
• Investment real estate properties, such as rental units

A key point here is that parents are required to report the asset’s “net worth”—i.e., its value minus any debts tied to it. If parents own a $300,000 cabin they rent out on Airbnb, for example—but still owe $200,000 on that cabin’s mortgage, then they’d only report a net worth of $100,000.

What counts as current net worth of businesses and investment farms?

If the parents own any for-profit businesses or farms, they’ll also be required to list the net worth of these assets. If you only grow food for your own family to eat, however—without selling anything—then you won’t have to list this as an asset on the FAFSA. 

Ask the expert

Eric Kirste

CFP®

The goal is to get your child grant and scholarship offers but be careful not to overlook other types of aid. For example, the FAFSA will ask if your child is interested in work-study opportunities. Answering no to this question will exclude your child from any work-study jobs, which is how many colleges hire their employees.

Why your answer to question 40 of the FAFSA must be accurate

Governments and schools rely on people answering the FAFSA questions correctly in order to make sure financial aid gets to the people who need it most. If you report an incorrect number for parental assets, you could affect the student’s ability to get financial aid and may even incur other penalties. 

What happens if you lie on question 40 of the FAFSA?

People are often tempted to lie about their assets on the FAFSA since having fewer assets can mean bigger financial aid payouts. You may be able to get away with it if you’re lucky, but it’s not a risk worth taking.

Each year, about 18% of FAFSA filers are selected to verify the information they provide. If you cannot verify these items, your financial aid package may be delayed or reduced. If you’ve already received those funds, you may have to pay them back, even if you’ve already spent them. 

In addition, people who blatantly lie on question 40 of the FAFSA may face a fine of up to $20,000 and/or be sent to prison for committing fraud. 

Can you change your answers on the FAFSA?

Not everyone is trying to intentionally defraud the system when they report parental assets on the FAFSA. If you’ve discovered an error after the fact, you can easily fix it. 

To make changes to your FAFSA, you can contact your school to notify them of the error, and the correct amount to report. You can also mail a paper FAFSA correction form, or submit a change in your online account. Your parents may also need to sign off on the change in their StudentAid.gov account. 

Ask the expert

Eric-Kirste

CFP®

For help with the FAFSA, start with the child’s high school counselors. They may have access to counselors and financial aid experts who can make the process easier by talking with families about FAFSA’s importance. Start the process early, they can connect parents to workshops and other resources. Check the Federal Student Aid Q&A for commonly asked questions. Finally, contact the university’s/college’s financial aid office for resources and help.