Chapter 2

Filling Out the FAFSA

The FAFSA form is the first step in the financial aid process. Because it’s important to complete the form correctly, this
chapter discusses some of the more difficult questions that arise. While the chapter follows the organization of the paper
application and the ISIR, the guidance applies equally to the FAFSA online. To see how FAFSA data are used to calculate
the expected family contribution (EFC), please refer to Chapter 3.

The FAFSA form is organized as steps, each consisting of a group of related questions. There are also instructions on how
to fill out the form. The guidance in this chapter supplements those instructions and explains why some of the questions
are needed on the FAFSA form.

Students can get advice on filling out the FAFSA online at https://studentaid.gov/resources. You may want to link to
this reference from pages that students use on your website or use certain graphics, videos or publications referenced on
the site when working with your students.

The parents mentioned are those of dependent students. The numbers in parentheses are for the items as they appear on
the SAR, ISIR, paper FAFSA, and FAA Access to CPS Online. As of the date the FAFSA form is signed, it is considered a
“snapshot” of the family’s information that can be updated only in certain circumstances and only for certain items; see
Chapter 4.

The following sections discuss many of the important questions found within each Step on the FAFSA form.

Step One: General Student Information

This step identifies the student and establishes his or her aid eligibility based on factors such as citizenship and
educational level (see also Volume 1: Student Eligibility). Questions in Step One are included to help the school package
awards and to eliminate the need for students to fill out a separate state or school financial aid form.

Please note: As described in Dear Colleague Letter GEN-21-04, the FAFSA Simplification Act eliminated the prohibition on
receiving Title IV aid for students with drug-related convictions and the requirement, for Title IV eligibility purposes, that
male students register with the Selective Service system before the age of 26. The Department began implementing
these changes starting with the 2021-2022 award year. For the 2022-2023 award year, though institutions will still see
Comment Codes 30, 33, or 57 for Selective Service issues and Codes 53, 54, 56, or 58 for drug convictions, failing to
register with the Selective Service or having a drug conviction does not impact a student’s Title IV aid eligibility and must
be ignored by the institution. In addition, for the 2022–2023 award year, the Department will include language in the
Comment Codes stating that no further action is necessary on the part of the student or the institution.

Student’s name (1–3). The name, with other identifying information, is used for several data matches. Because the
U.S. Department of Education (ED) matches the student’s name and Social Security number (SSN) with the Social
Security Administration (SSA), the name here should match the one in the SSA’s records, i.e., as it appears on the
student’s Social Security card.
Permanent mailing address (4–7). This is the student’s permanent home address, with two exceptions:
incarcerated students should use the address of the facility they are in, and homeless youth should use a mailing
address where they can reliably receive mail. That can be the address of a relative or friend who has given them
permission to use it, or it can be their school’s address as long as they have contacted the school for permission and
instructions on how mail they receive at the school will reach them. As soon as incarcerated and homeless students
have more permanent housing, they should update their address on the FAFSA form.
Student’s SSN (8). Students must have an SSN to apply for federal student aid except as noted below. If they
submit FAFSA information without an SSN, the FAFSA form will be returned unprocessed. To get an SSN or to find out
what the number is if they lost their Social Security card, they must contact the local SSA office. Contact the SSA at
1-800-772-1213 or https://www.ssa.gov/ssnumber/ for more information.
Students who enter the wrong SSN on their FAFSA form can correct it in a few ways: through the school, by
submitting a corrected paper SAR, or by filing a new FAFSA form. If they don’t have a copy of their SAR, they can call
the Federal Student Aid Information Center (1-800-433-3243) and have one sent to them, which they can correct and
mail to the address on the SAR. However, correcting the SSN through the school or with the SAR will not change the
number in the student’s identifier; that will remain the original SSN and may later cause confusion. Completing and
submitting a new FAFSA form solves this problem. Note that there are other rare instances where a student must
submit a special “correction application.” See the June 22, 2017, announcement.

Persons from the Freely Associated States (FAS)—the Republic of the Marshall Islands, the Federated States of
Micronesia, and the Republic of Palau—typically do not have SSNs. Students who are completing a FAFSA form for
the first time and who indicate that their state of legal residence is one of the above Pacific island groups should
enter “666” as the first three digits of their SSN field and leave the remaining six digits blank. CPS will then assign
them an identification number. Students from the FAS who have submitted a FAFSA form before and were issued
such a pseudo-SSN will enter it in the SSN field. It is important that they use the same number on all
subsequent FAFSAs because it allows for more accurate information on Pell Grant Lifetime Eligibility Used (LEU).

If a student does not use the same pseudo-SSN across award years—if on a subsequent FAFSA form he or she either
gets a new pseudo-SSN and uses that or if he or she uses a real SSN that he or she obtained from the SSA—the
school must contact the COD School Relations Center so the multiple student records can be merged into one and
the correct LEU can be calculated. Also, if Pacific island students file with a real SSN, schools will need to have an
alternate way, other than the pseudo-SSN, of identifying that population to ensure that the correct award limitations
described in Volume 1, Chapter 2 of the Handbook are in place for those students.

Student’s email address (13). If the student provides this address, he or she should get an email with a link to his
or her online SAR data within one to three days after the CPS receives his or her application. The Department will
also use this email address to correspond with the student regarding his or her application.
Citizenship status (14). Examples of eligible noncitizen categories are given in the FAFSA instructions, and a
detailed discussion of citizenship issues can be found in Volume 1: Student Eligibility. Only U.S. citizens or certain
classes of noncitizens are eligible for Title IV aid; however, other students can still submit the FAFSA because they
might be eligible for aid from institutional, state, or private sources that do not have the same requirements but use
FAFSA information.
Student’s marital status (16 and 17). This is marital status “as of today”—the day the application is signed.
Marital status cannot be projected. It can be updated in limited circumstances; see Chapter 4.
Same-sex marriage and the FAFSA form—In 2013, in United States v. Windsor, the Supreme Court ruled that
Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional because it violates the principles of due
process and equal protection. As a result, same-sex couples who have married in a domestic or foreign jurisdiction
that recognizes the marriage should complete the FAFSA as a married couple regardless of whether the jurisdiction in
which they reside or the student attends school recognizes the marriage. This applies to independent students and to
the parents of dependent students. See DCL GEN-13-25 for more information.

Student’s state and date of legal residence (18–20). This is used to figure the allowance for state and other
taxes for the EFC calculation.
It also indicates which state agency should receive the student’s FAFSA information. States have varying criteria for
determining whether the student is a resident for purposes of their financial aid. However, residing in one state for
five years will meet any state’s criteria. Therefore, a person answering “Yes” to Question 19 will likely meet the
residency requirements of the state reported in Question 18, while the state eligibility for a person answering “No”
will depend on the date reported in Question 20 and the state’s requirements.

Student’s gender and Selective Service registration (21–22). Prior to the 2021–2022 award year, male
students (i.e., those who were assigned the sex of male at birth) needed to have registered with the Selective
Service System (SSS) to be eligible for federal student aid. The Department conducts a match with the SSS to verify
this requirement.
However, as described in Dear Colleague Letter GEN-21-04, the FAFSA Simplification Act eliminated the requirement,
for Title IV eligibility purposes, that male students register with the Selective Service system before the age of 26.
The Department began implementing this change starting with the 2021–2022 award year.

For the 2022–2023 award year, though institutions will still see Comment Codes 30, 33, or 57 for Selective Service
issues, failing to register with the Selective Service does not impact a student’s Title IV aid eligibility and must be
ignored by the institution. In addition, for the 2022–2023 award year, the Department will include language in the
 Comment Codes stating that no further action is necessary on the part of the student or the institution. For more
information about this student eligibility modification, please see Volume 1, Chapters 1 and 5.

Conviction for possessing or selling illegal drugs (23). Prior to the 2021–2022 award year, students convicted
of a federal or state offense of selling or possessing illegal drugs that occurred during a period of enrollment while
they were receiving federal student aid could lose access to Title IV funding but were still encouraged to complete
and submit the FAFSA form because they may become eligible for federal aid, and even if they are not eligible, they
may be eligible for state or institutional aid.
As described in Dear Colleague Letter GEN-21-04, the FAFSA Simplification Act eliminated the prohibition on
receiving Title IV aid for students with drug-related convictions. The Department began implementing this change
starting with the 2021–2022 award year.

For the 2022–2023 award year, though institutions will still see Comment Codes 53, 54, 56, or 58 for drug
convictions, having a drug conviction does not impact a student’s Title IV aid eligibility and must be ignored by the
institution. This means, regardless of how the student answers question #23 on the FAFSA form, the student’s Title
IV eligibility will not be affected by having a drug conviction. For the 2022–2023 award year, the Department will
include language in the Comment Codes stating that no further action is necessary on the part of the student or the
institution.

For more information about this student eligibility modification, please see Volume 1, Chapters 1 and 5.

Highest level of school completed by student’s parents (24 and 25). Some state agencies use this
information to award grants and scholarships. Father and mother are defined here as the student’s birth or adoptive
parents but not stepparents, guardians, or foster parents. This definition is unique to these questions—all others use
the definition found under the “Who does and does not count as a parent on the FAFSA form” section described later
in this chapter.

IRS Data Retrieval Tool

The IRS Data Retrieval Tool (DRT) allows students and parents who use the online FAFSA or the FAFSA feature of
myStudentAid mobile app and who have already submitted their federal tax return to electronically retrieve their
tax data from the IRS database. The ISIR will show that data was imported and if it was altered. All students and
parents of dependent students who indicate on the application that they have already filed a federal tax return
and who are otherwise eligible to use the DRT will be directed to do so.

The DRT will automatically answer the question about whether or not a tax filer filed a Schedule 1. The answer will
be based on all current exceptions for filing a Schedule 1 and the transferred data for the Schedule 1 fields will be
handled the same as other data transferred using the IRS DRT.

The actual values of the imported data are not viewable by students and parents (though they still appear on the
ISIR). This is to enhance security and privacy and to prevent the misuse of sensitive data. Because aid officers and
other officials will be able to see the transferred data, and in keeping with the expectation that they protect the
confidentiality of data associated with the Title IV programs, they must not disclose income and tax information
from the FAFSA form with the applicant, the applicant's spouse, or the applicant's parents unless they can
authenticate their identity. For example, a student appearing in person and presenting an unexpired, valid,
government-issued photo ID such as a driver’s license would be an effective way to authenticate his or her
identity. See the September 5, 2017, announcement for more information.

As a result of IRS data being masked, students and parents will not be able to change it on the FAFSA; the
financial aid office will need to make corrections. Also, rollovers will be handled differently. If the DRT transfers a
non-zero amount into the untaxed pension or individual retirement account (IRA) distribution field, the applicant
will be asked if any of it is due to a rollover. If he or she answers yes, he or she will then enter the rollover
amount, which the CPS will subtract when calculating the EFC. And because of the data masking, students and
parents who file a joint tax return will not be able to transfer their income earned from work but will have to
manually enter those amounts. The income earned from work of single persons will, however, continue to
transfer. See the August 7, 2017, announcement.
When the ISIR shows an IRS Request Flag value of 06 or 07, schools will need to contact the student or parent. A
value of 06 indicates that after the DRT was used and the FAFSA was submitted, the student or parent changed an
item on the FAFSA (e.g., the date of marriage) that would have made the person ineligible to use the DRT. The
school must contact the student or parent to determine if all of the transferred data was correct or if it needs to
be corrected. A value of 07 is an indication from the IRS that the student or parent used the DRT but also has filed
an amended tax return for the relevant year (includes amended returns generated by IRS adjustments). Because
the data that was transferred will be from the original return and not the amended one, the school must contact
the student or parent and make any applicable corrections to FAFSA items, regardless of whether the application
was selected for verification.

The ISIR will display IRS Data Field flags that indicate if any individual item was transferred from the IRS and if it
was subsequently changed. A flag value of 1 will indicate that the item was transferred and was not changed.
Such items do not need to be verified if the student is selected for verification. However, when there is a Request
Flag value of 06 or 07, the above guidance must first be followed. The August 7 announcement has more
information.

Also due to the IRS data masking, there are two comment codes that schools must respond to: code 400 for
parents and 401 for students. When an ISIR indicates either of these codes, the school must check the FAFSA to
see if any of the following conditions exist and make necessary corrections:

1. The student or parent is a tax filer and the AGI transferred from the IRS is zero, but the total income earned
from work is greater than zero.

2. The total of the taxable income offsets (see the “taxable income offsets section later in this chapter) for the
student or parents is greater than the AGI transferred from the IRS.

3. Any of the untaxed income items (see the “Untaxed income” section later in this chapter) for the student or
parent is greater than or equal to the AGI transferred from the IRS.

The school may need to contact the student or parent for an explanation of one of the above conditions and to
determine if any of the associated FAFSA items need to be corrected. Also, comment codes 400 and 401 can be
considered resolved if (V1 or V5) verification is completed for the same ISIR. Again, see the August 7
announcement for more information.

High school completion status (26). The student indicates one of the following: high school diploma, General
Educational Development (GED) certificate or state certificate, homeschooled, or none of the above. None of the
above includes those who have the recognized equivalent of a high school diploma (as defined in 34 CFR 600.2)
other than a GED certificate or a state certificate or who may qualify under the Ability-to-Benefit (ATB) alternatives;
see Volume 1, Chapter 1, for an explanation of those options. Typically a foreign secondary education credential
counts as a high school diploma; see FHD-Q1 on the program integrity website.
A state certificate is what students receive after passing a “state authorized examination,” as referred to in 34 CFR
600.2. This includes tests comparable to the GED—i.e., those created and distributed by a test publisher—such as
the High School Equivalency Test (HiSET) or the Test Assessing Secondary Completion (TASC), as well as those
established by states, for example, the California High School Proficiency Exam (CHSPE). California considers a
passing grade on the CHSPE to be equivalent to a diploma.

High school (27). This question asks for the name of the high school where the student received or will receive his
or her diploma, as well as the city and state (or FC for foreign country) where it is located. On the FAFSA website, the
student can choose the name from the dropdown list, or, if it is not on the list, the student will enter the school
name, city, and state directly on the FAFSA form. See Volume 1, Chapter 1, regarding a school’s policy about
checking the validity of a high school education.

Definitions
Undergraduate student—One who is enrolled in a program that usually does not exceed four academic years or
a longer program that leads to a first degree at the baccalaureate level. Students in programs longer than five
years are considered undergraduates for only the first four years.

For the FSEOG, Pell, and TEACH Grant programs, a student is an undergraduate only if he or she has not earned,
or completed the requirements for, a bachelor’s or professional degree. Students enrolled in a post baccalaureate
program as described in 34 CFR 686.2(d) and 690.6 are still undergraduates for receiving TEACH and Pell grants
but not FSEOG.

Students in dual degree programs that confer a bachelor’s degree and either a graduate or first professional
degree are undergraduates for at least the first three years of the program. The school determines at what point
after three years they cease to be undergraduates. [34 CFR 668.2(b)]

Graduate or professional student—One who (1) is not receiving aid as an undergraduate for the same period
of enrollment; (2) is enrolled in a program above the bachelor’s degree level or one leading to a professional
degree; and (3) has completed the equivalent of at least three years of full-time study, either before entrance into
the program or as part of it.

Measured in credit hours, three years of full-time study must be at least three times the annual minimum for full-
time study: 72 (24x3) semester or trimester hours or 108 (36x3) quarter hours. [34 CFR 668.2(b)]

Simplified needs test—The law provides a “simplified EFC” calculation for a student who meets certain income
and tax filing requirements. If the applicant is eligible based on the information on the FAFSA form, the CPS will
automatically exclude assets from the EFC calculation. However, some states and schools require this information
for their own aid programs.

First bachelor’s degree (28). The student indicates whether he or she will have a first bachelor’s degree before
beginning the 2022–2023 year because eligibility for Pell and Federal Supplemental Educational Opportunity grants
(FSEOGs) is almost exclusively restricted to students who have not received a bachelor’s degree or completed the
requirements for one. See “Pell Grants” in Chapter 6 of Volume 1 regarding degrees from unaccredited and foreign
schools, which can count as bachelor’s degrees for Pell and FSEOG eligibility.
Student’s college grade level at the start of the school year (29). This is not based on the number of years
the student has attended college but on work completed toward the degree/certificate. For instance, a full-time
student might attain second-year grade level after one year of study, while a half-time student would take two years
to reach that level.
Interest in work-study (31). The student indicates whether he or she is interested in receiving Federal Work-Study
(FWS). This helps the school in packaging the student's award. If the student is unsure about wanting FWS, he or she
should answer “don’t know” to still be considered for it; later he or she can decline any aid he or she does not want.

No income reported on the FAFSA form

Occasionally an applicant will report no income for the base year. This can occur when the family has tax write-
offs that produce a negative AGI or when the applicant neglected to report untaxed assistance. If the CPS does not
select the student for verification, you may still choose to ask him or her for further information about his or her
means of support during the base year. Also, you may use professional judgment (PJ) to adjust the income line
items to reflect income the family receives that doesn’t appear on the tax return.

Any cash support for the student, other than support from a parent for a dependent student, counts as untaxed
income and must be reported. In-kind help (see the “Income and benefits not to be included” section later in this
chapter) from a friend or relative is not considered untaxed income and would not appear on the FAFSA form,
however, you may use PJ to account for the value of that in-kind support in the COA. For example, you could
adjust the room and board component of the COA for a student who lives with his or her aunt and eats meals with
his or her family.
 Married filing separately

When a student and spouse or a dependent student’s parents file separate and different types of returns, what
type should be indicated in Question 33 or 80? In such cases, IRS Form 1040 and foreign tax returns are
considered comparable and take precedence over tax returns from the five inhabited U.S. territories: Puerto Rico,
Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa. For example, if a student filed
a foreign return and his or her spouse filed a Puerto Rican return, the student would answer foreign tax return for
question 33. When comparable but different returns are filed, the IRS return takes precedence and is indicated. If
the above student filed a 1040 return and his or her spouse filed a foreign return, the student would answer IRS
1040 to the question.

If one spouse files separately and the other does not file a return but has some income, how do you figure the
AGI? Add the income earned from work (e.g., earnings from the W-2 form or any other earning statements) of the
spouse who does not file a return to the AGI (as given on line 11 of Form 1040) of the spouse who does and enter
the sum on the appropriate AGI line of the FAFSA.

EFA or not?

Sometimes it is difficult to account for an outside financial award. If a student receives the award because of
postsecondary enrollment, it counts as estimated financial assistance (EFA) if it is not considered wages for
employment according to federal or state rules, or if it is considered wages and is based on need. Any amount
that appears as income on the tax return will also be included on the appropriate line of item 43 or 91 on the
2022–2023 FAFSA form. If the award is considered wages for employment but is not based on need, then it is not
EFA and it remains in income.

Steps Two and Four: Income and Assets

Step Two (questions 32–44) ask for the student’s and spouse’s income and assets [HEA Sec. 480(a), (b), (f), (g)]. Step Four
(questions 58–92) collects similar information about parent income and assets, so the following discussion also applies to
parents as well.

If the student or his or her parent was not married in 2020 but is married when the application is signed, the student also
needs to provide income and asset information for the new spouse. If the student or their parent was married in 2020 but
is separated, divorced, or widowed when the application is signed, the student or parent excludes the income and assets
for that spouse even though the information may be on the 2020 tax forms.

The FAFSA form asks for income and taxes paid according to lines on the IRS tax forms for 2020, the “base year” for
2022–2023. Data from the completed tax year is used as a predictor of the family’s financial situation for the current year.
In the rare instance that 2020 tax data is not available yet, best estimates can be used on the application. However, the
student is asked to correct this information later when the tax return is filed.

Information from the income tax returns required by the tax codes of the Commonwealth of Puerto Rico, Guam, American
Samoa, and the U.S. Virgin Islands is reported on the FAFSA form in the same manner as U.S. tax information, and copies
of these forms can be used for verification in the same way as U.S. tax forms are. Amounts are already reported in U.S.
dollars, and the school should look at tax return line items that are comparable to the IRS line items for verification.

When a student or parent has returns from both a foreign nation and the United States for the same tax year, they should
use the data from the U.S. return when filling out the FAFSA form.

The FAFSA application also collects information for certain investments and other assets. Applicants only report the net
worth of assets instead of reporting the value and debt. They should report asset amounts as of the date the
application is signed.

Tax return filed and tax filing status (32–35, 79–82 for parents). These questions ask if a 2020 tax return was
completed, which return was or will be filed, what the filing status was or will be, and whether the student or parents
filed a Schedule 1 or did so only to claim one or more of the following: unemployment compensation, an Alaska
 Permanent Fund dividend, educator expenses, an IRA deduction, or the student loan interest deduction. The answers
are used in part to identify if the student is eligible for the simplified needs test or the auto zero EFC and to find
inconsistencies between the FAFSA form and the tax return.

Qualified education benefits

Qualified tuition programs (QTPs, also known as section 529 plans because they are covered in section 529 of the
IRS tax code) and Coverdell education savings accounts are grouped together in the law as qualified education
benefits and have the same treatment: they are an asset of the owner (not the beneficiary because the owner can
change the beneficiary at any time) except when the owner is a dependent student, in which case they are an
asset of the parent. When the owner is some other person (including a noncustodial parent), distributions from
these plans to the student count as untaxed income, as “money received.” When a parent owns a plan for a child
and the parent is filing a FAFSA application as a student for himself or herself, the plan counts as an asset on the
parent's FAFSA form.

States, their agencies, and some colleges sponsor qualified tuition programs. The IRS mentions two types of QTPs
that are commonly called prepaid tuition plans and college savings plans. States may offer both types, but
colleges may only sponsor prepaid tuition plans.

Prepaid tuition plans allow a person to buy tuition credits or certificates, which count as units of attendance. The
number of units doesn’t change even though tuition will likely increase before the beneficiary gets to use the
tuition credits. They are an asset of the plan owner, and their worth is the refund value of the credits or
certificates.

College savings plans allow a benefactor to deposit money into an account that will be used for the beneficiary’s
college expenses. The buyer does not pre-purchase tuition credits as with a prepaid tuition plan. Rather, this type
of plan is essentially a savings account, and its value as an asset is the current balance of the account.

Coverdell education savings accounts, or ESAs, are another tax-advantaged savings vehicle for college education.
They are treated the same as college savings plans: the current balance is an asset of the account owner.

As long as distributions from QTPs and ESAs do not exceed the qualified education expenses for which they are
intended, they are tax-free, so they will not appear in the next year’s AGI. They should not be treated as untaxed
income (except in the cases mentioned above) or as estimated financial assistance. For more information on
these benefits, see the IRS’s Publication 970, Tax Benefits for Education.

Reporting “take-back” mortgages

In a take-back mortgage, the seller of a house finances a portion of its cost for the buyer, who repays this
additional mortgage to the seller. The seller reports the interest part of any payments received from the buyer on
Schedule B of IRS Form 1040. Therefore, if a student or his or her parents report such interest on the tax return, it
likely indicates an asset that should be reported on the FAFSA form: the value of the take-back mortgage. There
would be no debt reported against this asset. For example, if a dependent student’s parents sold their house for
$200,000 and financed a take back mortgage of $40,000 to the buyer, the parents should report $40,000 as the
net worth of the investment. The worth will decrease each year depending on how much of the principal the buyer
paid back that year. This concept applies to other forms of seller financing of the sale of a home or other property.

Adjusted gross income (AGI), income tax, and income earned from work (36–39, 84–87 for parents).
These items are reported for dependent students, their parents, and independent students. Each question gives the
line reference to the 2020 IRS tax forms.
Though students and parents may manually enter their IRS data in the FAFSA, they are strongly encouraged to
transfer it with the DRT because that method is accurate, efficient, and useful for verification.

Those who file a joint return and then are divorced, separated, or widowed before the application is signed won’t be
able to simply copy the information from the tax forms or transfer data with the DRT. Instead, they must figure out
how much of the income and taxes paid is attributable to them and not their spouse. For more on this calculation,
see “Using a joint return to figure individual AGI and taxes paid” in Chapter 4.

If the student, spouse, or parents were not required to file a tax return, the student should still report any income
earned from work in questions 38–39 (student and spouse) and questions 86–87 (parents). The W-2 form and other
records of work earnings should be used to determine these amounts. Do not include combat pay; because it is not
counted as untaxed income and is removed from the AGI when it is taxable, it should not be included in the income
earned from work.

The FAFSA form instructs the applicant to add line 1 of the 1040 form to lines 3 and 6 of Schedule 1 and box 14 (code
A) of Schedule K-1 (Form 1065) as an option for determining the income earned from work. But when the values of
lines 3 or 6 or box 14 are negative, this will reduce the total and can wrongly affect the Social Security allowance. If
values from lines 3 or 6 or box 14 are negative, treat them as zero when determining the income earned from work.

Income earned from work is used to calculate allowances for the Social Security and Medicare tax (aka the Federal
Insurance Contributions Act or FICA tax) and for the added costs incurred by two working spouses. For non-tax filers
it will also be used in place of AGI and will cause the application to be rejected if it is above the tax filing threshold.

For a fiscal year (rather than calendar year) tax return, information should be used from the return that includes the
greater number of months in 2020.

Example: Owen’s parents file a fiscal year tax return. Their fiscal year begins in September. The return they filed for
the fiscal year starting in September 2019 includes eight months in 2020. The return they filed for the fiscal year
starting in September 2020 only includes four months of 2020. Therefore, they should use the information from the
return for the fiscal year that began in September 2019.

If the student or parents filed a tax return using something other than an IRS form, such as a foreign or Puerto Rican
tax form, the student should report on the FAFSA form the amounts (converted to U.S. dollars) from the lines of the
form that correspond most closely to those on the common IRS forms.

Non-tax filers, foreign countries, and international organizations In some countries the tax system does not
operate as it does in the U.S., and people in those countries can earn a substantial amount of income and pay taxes
without having to file a return. In such a case the person would correctly indicate that he or she did not file a tax
return, and nothing will be reported for AGI or income tax paid. When that happens, he or she should report any net
income that is earned from work in Question 38, 39, 86, or 87, as appropriate, of the FAFSA form and not as untaxed
income in Question 44h or 92h, which is where untaxed foreign income not earned from work should be reported.
This ensures that the income is properly included in the EFC calculation; for non-tax filers, income earned from work
is used in place of the AGI and to determine eligibility for the simplified needs test (SNT) and automatic zero EFC.

As noted earlier, when income earned from work exceeds the U.S. tax filing threshold and the person indicates he or
she is not going to file a return, the FAFSA form will be rejected. The aid office must override the reject in FAA Access
to CPS Online so that an EFC will be generated.

What happens when one spouse files a return but the other spouse does not file a return but has foreign earned
income as described above? Because one spouse filed a return, the FAFSA form should indicate in Question 33 or 80
what return was or will be filed, and the CPS will use the AGI for income and to determine eligibility for the SNT and
auto-zero EFC. As above, the foreign income is still reported as income earned from work, but it is also added to the
AGI of the tax filing spouse, as our guidance instructs under the “married filing separately” section described earlier
in this chapter.

In some instances, employees of certain international organizations, such as the United Nations, the International
Monetary Fund, the World Bank, and others, might not be required to file a return, which results in situations similar
to those described above. Follow the same guidance—a non-tax filer will report income from that employment as
income earned from work only, while a person who is married to a tax filer will report it as income earned from work
and add it to the AGI of the tax-filing spouse.

Note that the guidance in this section does not pertain to the Foreign Earned Income Exclusion, which is reported on
the U.S. tax return and is excluded from the EFC calculation by the HEA.
Assets (40–42, 88–90 for parents). An asset is property that the family owns and has an exchange value. The
FAFSA form collects current data (as of the day of signing the FAFSA form) about cash, savings and checking
accounts, investments, businesses, and investment farms. Most assets are investments such as college savings
plans, Coverdell education savings accounts, real estate, installment and land sale contracts (including mortgages
held), trust funds, mutual funds, money market funds, Uniform Gifts and Uniform Transfers to Minors (UGMA and
UTMA) accounts, certificates of deposit, stocks, stock options, bonds, commodities, and precious metals. If the asset
isn’t a business or investment farm, it is reported as an investment.
The FAFSA form asks for the net worth of investments, which is their total current market value minus their
associated debts. If their net worth is negative, zero should be reported.

Similarly, for a business or investment farm, the current net worth (the current market value minus the debt
owed on it) is reported for land, buildings, machinery, equipment, livestock, and inventories. Business or farm debt
means only those debts for which the business or farm was used as collateral.

Rental properties are an asset. A unit within a family home that has its own entrance, kitchen, and bath (therefore
a rented bedroom would not count) and that is rented to someone other than a family member counts as an asset.
To calculate its net value, multiply the net value of the entire structure by the fraction the rented space represents.
Similarly, if a family owned a 10-unit apartment building and lived in one of the apartments, 9/10 or 90% of the net
value of the building would be an asset.

At times a student or parent will claim rental property as a business. Generally, it must be reported as real estate
instead. A rental property would have to be part of a formally recognized business to be reported as such, and it
usually would provide additional services like regular cleaning, linen, or maid service.

Virtual currency such as Bitcoin is considered an asset. If a student, student’s spouse, or parent (as applicable)
holds Bitcoin, they must report its value in U.S. dollars (as of the day the FAFSA form is completed) as an asset on
the FAFSA form. If the student or parent sells Bitcoin and has a capital gain from the sale, the taxable portion will end
up in the AGI for the year it is reported on the tax return, and the AGI will then be included on the associated FAFSA
form. For more information on how the IRS treats virtual currencies, please see the IRS virtual currency webpage.

UGMA and UTMA accounts: The Uniform Gifts and Uniform Transfers to Minors Acts (UGMA and UTMA) allow the
establishment of an account for gifts of cash and financial assets for a minor without the expense of creating a trust.
Because the minor is the owner of the account, it counts as his or her asset on the FAFSA form, not the asset of the
custodian, who is often the parent.

Excluded assets—the following are NOT reported on the FAFSA Form:

Possessions such as a car, a stereo, clothes, or furniture

A family’s principal place of residence, even if it is part of a business
A family farm (including equipment, livestock, etc.) if
it is the principal place of residence for the applicant and his or her family (spouse or, for dependent
students, parents), and
the applicant (or parents of a dependent student) materially participated in the farming operation
Family-owned and controlled small businesses (which can include farms) that have 100 or fewer full-time
or full-time equivalent employees. “Family-owned and controlled” means that more than 50% of the business is
owned by persons who are directly related or are (or were) related by marriage. (Family members do not have
to be counted in the household size for this question.)
Retirement and life insurance plans and ABLE accounts. An ABLE account is a tax-advantaged savings
account for a disabled person and his or her family; its value does not count as an asset on the FAFSA form. The
value of retirement plans—401(k) plans, pension funds, annuities, noneducation IRAs, Keogh plans, etc.—also is
not counted as an asset, but distributions do count as income; they appear in the AGI if taxable and in
Questions 44 and 92 if untaxed. Similarly, the cash value or equity of a whole life insurance policy isn’t reported
as an asset, but an insurance settlement does count as income.
The full amount of the distribution is reported, whether it was a lump sum or annual distribution, and it will
count as taxable or untaxed income, as appropriate. An exception to reporting pension distributions is when
they are rolled over into another retirement plan in the same tax year (rollover).
 Excluded assets for Native American students. The law (see HEA Sec. 479C) excludes reporting any
income and asset of $2,000 or less per individual payment (any amount over $2,000 is reported as untaxed
income) received under the Per Capita Act or the Indian Tribal Judgment Funds Use or Distribution Act. It also
excludes any income received under the Alaska Native Claims Settlement Act or the Maine Indian Claims
Settlement Act. Per capita distributions or the proceeds received from the Land Buy-Back Program for Tribal
Nations—a tribal purchase of fractionated lands as a result of the Cobell settlement under the Claims Resolution
Act of 2010 (42 U.S.C. 1305)—should also be excluded.

Reporting trust funds

Trust funds in the name of a student, spouse, or parent should be reported as that person’s asset on the
application, generally even if the beneficiary’s access to the trust is restricted. If the settlor of a trust has
voluntarily placed restrictions on its use, then the student should report its present value as an asset, as
discussed below. If a trust has been restricted by court order, however, the student should not report it. An
example of such a restricted trust is one set up by court order to pay for future surgery for the victim of a car
accident.

How the trust must be reported depends on whether the student (or dependent student’s parent) receives or will
receive the interest income, the trust principal, or both. In the case of a divorce or separation where the trust is
owned jointly and ownership is not being contested, the property and the debt are equally divided between the
owners for reporting purposes unless the terms of the trust specify some other method of division.

Interest only

If a student, spouse, or parent receives only the interest from the trust, any interest received in the base year
must be reported as income. If the interest accumulates and is not paid out, the recipient must report an asset
value for the interest he or she will receive. The trust officer can usually calculate the value of the interest the
person will receive while the trust exists. This value represents the amount a third person would be willing to pay
for the interest income.

Principal only

The person who will receive only the trust principal must report as an asset the present value of his or her right to
that principal. For example, if a $10,000 principal reverts to a dependent student’s parents when the trust ends in
10 years and the student is receiving the interest, he or she would report the interest received as income and
report as a parental asset the present value of his or her parents’ rights to the principal. The present value of the
principal can be calculated by the trust officer; it’s the amount that a third person would pay for the right to
receive the principal 10 years from now—basically, the amount that one would have to deposit now to receive
$10,000 in 10 years.

Both principal and interest

If a student, spouse, or parent receives both the interest and the principal from the trust, the student should
report the present value of both interest and principal, as described in the discussion of principal only. If the trust
is set up so that the interest accumulates within the trust until it ends, the beneficiary should report as an asset
the present value of the interest and principal that he or she is expected to receive when the trust ends.

Ownership of an asset

In some cases the ownership of an asset is divided or contested, which can affect how the student reports the
asset.

Part ownership of asset

If the parent or student has only part ownership of an asset, the student should report only the owned part.
Generally, the value of an asset and debts against it should be divided equally by the number of people who share
ownership unless the share of the asset is determined by the amount invested or the terms of the arrangement
specify some other means of division.

Contested ownership

Assets shouldn’t be reported if the ownership is being contested. For instance, if the parents are separated and
can’t sell or borrow against jointly owned property because it’s being contested, the parent reporting FAFSA
information would not list any net worth for the property. However, if the ownership of the property is not being
contested, the parent would report the property as an asset. If ownership of an asset is resolved after the initial
application is filed, the student can’t update this information.

Lien against, and imminent foreclosure of, an asset

If there’s a lien against the asset, the net value of the asset is determined by subtracting from its total value any
associated debt as well as the amount of the lien. If foreclosure of an asset is imminent, the net value of the asset
would still be reported until the party making the foreclosure completes legal action to take possession of the
asset. If the status of the property changes after the application is filed, the student can’t update the asset
information.

Taxable income offsets (43 and 91). These questions total certain types of income and other monies that are
excluded from income in the need analysis. The CPS subtracts these excluded amounts from the AGI when
calculating the EFC.
a. Education tax credits. These are the American Opportunity and Lifetime Learning tax credits (AOTC and
LLC); the FAFSA form refers to Schedule 3 line 3 on the 1040 form. Part of the AOTC can be refundable, that is,
payable to tax filers even if they do not owe any federal income tax. The nonrefundable part appears on the
same lines of the tax return and the FAFSA form as the LLC. The refundable portion appears on line 29 of the
1040 form. It does not appear on the lines of the FAFSA form for the education tax credits, nor does it count as
untaxed income.
b. Child support payments. Count payments made during 2020 because of divorce, separation, or legal
requirement by the student, spouse, or parent whose income is reported on the FAFSA form. Don’t include
support for children in the household. Also, don’t count child support received for a child in the household size;
that appears as untaxed income on line 44c or 92c.
Example: Steven and his wife each have a child from a previous relationship who does not live with them and
for whom they pay child support. Because Steven provides over half of his daughter’s support through his
payments, he counts her in his household size. Therefore, he doesn’t report the amount of child support he pays
on his FAFSA form. Steven’s wife isn’t providing over half of her son’s support, so he isn’t included in Steven’s
household size. Therefore, Steven can report the amount of child support his wife pays.

c. Taxable earnings from need-based work programs. This includes earnings from Federal Work-Study and
need-based employment portions of fellowships or assistantships. The student uses W-2s or other records he or
she received for this income.
d. Student grant and scholarship aid. A student reports only the amount of grants and scholarships
received that was reported as taxable income on the return. This includes grant and scholarship (not
employment) portions of fellowships and assistantships, as well as taxable stipends and employer tuition
reimbursements. Include also AmeriCorps benefits (awards, living allowances, and interest accrual payments)
except those for health care or child care. The filer usually writes the taxable amount of the grant or scholarship
separately on the tax form next to the line where wages and other earnings are reported. If the amount was
reported this way, the student can copy it from the tax form.
Reimbursements and stipends—Employers often help with education costs by paying stipends or
reimbursing employees for classes taken. These benefits count as estimated financial assistance (or reduce the
cost of attendance) even if they aren’t received until the end of the class(es) and are contingent on earning a
 minimum grade. Any taxable portion received in the prior year and appearing in the AGI is entered in Question
43 or 91.

e. Combat pay or special combat pay. Enter only the portion that was included in AGI. This should be zero
for enlisted persons and warrant officers (including commissioned warrant officers) because their combat pay is
entirely nontaxable. For commissioned officers generally, combat pay in excess of the highest enlisted person’s
pay (plus imminent danger/hostile fire pay) is taxable. To determine the taxable amount, find the total combat
pay from the serviceperson’s leave and earnings statements and subtract the untaxed portion, which is
reported in box 12 of the W-2 form with code Q. See IRS Publication 3, Armed Forces’ Tax Guide, for more
information.
f. College cooperative education program earnings from work. The student uses W-2s or other records
he or she received for these earnings.
Untaxed income (44 and 92). These questions total the untaxed income, some of which is reported on the tax
form even though it isn’t taxed. A student who hasn’t filed a return will have to estimate these amounts, and
students or parents may need to separate information from a joint return.
a. Payments to tax-deferred or sheltered pension and savings plans (paid directly or withheld from
earnings). This includes untaxed portions of 401(k) and 403(b) plans. These types of payments are listed in
boxes 12a through 12d of the W-2 and will have one of the following codes: D, E, F, G, H, or S. Note that
employer contributions to these plans shouldn’t be reported as an untaxed benefit.
b. Deductible IRA or Keogh payments. Payments to an IRA or Keogh plan that are excluded from taxation
are reported as untaxed income. These amounts appear on the 1040 form schedule 1 lines 15 and 19.
c. Child support received for all children.
d. Tax-exempt interest income. Certain types of interest, such as interest on municipal bonds, are tax-
exempt. This amount is on line 2a on the 1040 form.
e. Untaxed IRA distributions and pension or annuity payments. A tax filer determines how much of his or
her IRA distribution or pension or annuity payment is taxable when he or she completes his or her tax return.
The applicant reports the untaxed portion, which is determined from the tax return, but should not include
rollovers (transfers of funds from one IRA to another). These amounts can be found on the 1040 form—(lines 4a
+ 5a) minus (lines 4b + 5b).
f. Housing, food, and other living allowances. Some people, such as clergy, receive these allowances as
compensation for their jobs. Money received to pay for rent should also be reported, as should the free use of a
house or apartment (the rent or market value of a comparable house or apartment can be used). Similarly, if the
student received free room or board in 2020 for a job that was not awarded as student financial aid (including
resident advisor positions that provide free room and board as part of the student’s non-need-based
employment compensation), he or she must report the value of the room and board as untaxed income.
Members of the U.S. military report their basic allowance for subsistence (BAS) but not their basic allowance for
housing (BAH).
g. Veterans’ noneducation benefits. This includes disability, the death pension, Dependency and Indemnity
Compensation (DIC), and Veterans Affairs (VA) educational work-study allowances.
h. Any other untaxed income not reported elsewhere. This includes disability benefits (but not Social
Security disability), worker’s compensation, tax-free contributions to HSAs (see below), interest income on
education IRAs, untaxed portions of Railroad Retirement benefits, black lung benefits, refugee assistance, the
untaxed portion of capital gains, alimony/maintenance payments/spousal support and foreign income that
wasn’t taxed by any government, wasn’t earned, and wasn’t part of the Foreign Earned Income Exclusion.
Health savings accounts (HSAs) resemble tax-deferred pension and savings plans more than flexible
spending arrangements. For example, the balance in an HSA persists from year to year, while that in a flexible
spending arrangement must be spent on qualified expenses by the end of the year. Therefore, treat tax-free
contributions to an HSA as untaxed income; these will appear on line 12 of Schedule 1 of Form 1040. The
balance in the account does not count as an asset, nor would distributions from it count as untaxed income
when they are used for qualified medical expenses. Distributions not used for qualified expenses are subject to
income tax (and a possible penalty) and will be counted in the adjusted gross income.
Extended foster care payments: Foster children who meet certain criteria can receive benefits until age 21.
If these extended payments are under the authority of Title IV, Part E, of the Social Security Act, they are not
reported on the FAFSA form. If they are paid under some other authority, e.g., a state foster youth support
 program, they are reported as untaxed income to the student in Question 44h of the 2022–2023 FAFSA form.
See DCL GEN-13-18.
i. Money received (44 only). The student reports any cash support he or she received, but if dependent he or
she does not count support received from his or her parents, with one exception: money from a noncustodial
parent that is not part of a legal child support agreement is untaxed income to the student. Cash support
includes money, gifts, housing, food, clothing, car payments or expenses, medical and dental care, college
costs, and money paid to someone else or paid for on his or her behalf. For example, if a friend or relative pays
a student’s electric bill or part of his or her rent, the student must report the amount as untaxed income. If he or
she is living with a friend who pays the rent and the student’s name is on the lease, the rent paid on his or her
behalf counts as cash support because the student is responsible for payments that his or her friend is making.
Note that only the student reports this item—it does not appear in the parents’ untaxed income section.
Tips on reporting benefits: The student reports the actual amount of benefits received during the year, even if it
is an underpayment or an overpayment that will be corrected in the next year. However, if the underpayment or
overpayment was adjusted in the same year, only the net amount received during that year would be reported.
Benefits the student or parents receive on behalf of anyone included in their FAFSA household size count as income
to them unless the person is an adult (not a child), e.g., a grandmother, who receives the benefits in her name. Such
a person is not included in the household size if benefits in her name total more than half of her support.

Box 14 items on the W-2: Schools are not required to review income listed in box 14 of the IRS’s W-2 form. There
are a few reasons for this. Several of the items the IRS suggests could be reported in box 14 are captured already on
the FAFSA form (in adjusted gross income for instance); also, employers could include in box 14 certain nonelective
pension plan contributions, and nonelective contributions should not be counted in the need analysis. Finally,
because no employer is required to provide information in box 14, it is unlikely that employers will be consistent in
what they report there. But if you are aware that a box 14 item should be reported—i.e., if it represents discretionary
income—you should count it on the pertinent line. For example, clergy parsonage allowances often appear in box 14,
and you would count that on line f of Question 44 or 92.

Income and benefits NOT to be included:

** Student aid** is accounted for in packaging (see Volume 3: Calculating Awards and Packaging); it does not
count as income in the calculation of the EFC. Student aid includes tuition benefits a parent receives for a
dependent, such as those from the parent’s employer. Student aid that was included in the AGI is reported
separately on the FAFSA form as an exclusion so that it can be subtracted from income (43d and 91d).
Veterans’ education benefits. Appendix A in Chapter 7 of Volume 3 for 2022–2023 has the list of excluded
benefits. See also the pertinent August 13, 2009 electronic announcement.
The value of on-base housing or the BAH for students or parents in the U.S. military. However, the BAS does
count as untaxed income.
Rent subsidies for low-income housing.
Payments and services received from states for foster care or adoption assistance, under Part A or
Part E of Title IV of the Social Security Act (e.g., Wisconsin’s Adoption Assistance Program, which facilitates the
adoption of children with special needs).
Per capita payments to Native Americans. See “Assets” section earlier in this chapter.
Heating/fuel assistance. This includes payments or allowances received under the Low-Income Home Energy
Assistance Act (LIHEA). Payments under the LIHEA are made through state programs that may have different
names.
Flexible spending arrangements. These are employee benefit programs, sometimes called “cafeteria plans.”
Neither contributions to nor payments from these programs should count as untaxed income.
Welfare benefits, untaxed Social Security benefits, and the earned income and additional child tax
credits. Welfare benefits are means-tested state or federal supplementary assistance. Examples are benefits
from Medicaid (including the Children’s Health Insurance Program), the Supplemental Nutrition Assistance
Program (SNAP), and Temporary Assistance for Needy Families (TANF).
Combat pay, Foreign Earned Income Exclusion, and credit for federal tax on special fuels.
In-kind support is support other than money, for example, friends or relatives giving the student food or
allowing him or her to live with them rent-free. That support isn’t included as untaxed income, though you may
use professional judgment (e.g., by reducing the cost of attendance or increasing income) with students who
 receive such in-kind support. This is not the same as housing and other allowances received as compensation
for a job, which, as stated earlier, must be reported. If the student is living with someone who is paying living
expenses, it can be difficult to determine whether the support is cash support or in-kind support. The basic rule
is: if someone pays a cost the student is obligated to pay, the amount counts as cash support.
Example: Independent student with parental support

Doug is a graduate student, so he’s independent even though he still lives with his parents and has no income
of his own. Although the FAA at his school can’t make him a dependent student, the FAA can decide to use
professional judgment to add an amount to his untaxed income to account for the in-kind support his parents
provide.

Step Three: Dependency Status

Purpose: The law governing the FSA programs is based on the premise that the family is the first source of the student’s
support, and the law provides several criteria that decide if the student is considered independent of his or her parents for
aid eligibility. Note that a student reaching the age of 18 or 21 or living apart from his or her parents does not affect his
dependency status. For the 2022–2023 year, a student who meets any of the following criteria from HEA Sec. 480(d) is
independent—if he or she:

was born before January 1, 1999;

is married as of the date he or she applies;
will be a graduate or professional student when the award year starts;
is currently serving on active duty for purposes other than training;
is a veteran of the U.S. Armed Forces;
has dependents other than a spouse;
was an orphan, foster child, or ward/dependent of the court at any time since the age of 13;
is an emancipated minor or in legal guardianship or was when the student reached the age of majority in his or her
state; or
was determined at any time since July 1, 2021, to be an unaccompanied youth who was homeless or self-supporting
and at risk of being homeless.

If a student is considered a dependent of his or her parents, the parents' income and assets must be included on the
FAFSA form. The CPS will calculate a parent contribution and add it to the student’s contribution to derive an EFC.

In unusual cases an aid administrator can determine that a student who doesn’t meet any of the independence criteria
should still be treated as an independent student. (See “Dependency Overrides” in Chapter 5.)

Example: Surviving parent and stepparent

Al’s parents divorced when he was five. His mother remarried, and Al lived with her and his stepfather, who did not adopt
him. His mother died last year, but his father is still living. Al doesn’t meet any of the independence criteria, so he’s a
dependent student. Because his father is his only parent, Al needs to report his father’s information on the FAFSA form,
even though he’s still living with and being supported by his stepfather.

Example: Student living with relatives

Millie’s father is dead, and her mother can’t support her, so she is living with her grandmother. Her mother doesn’t pay
any money for her support. Millie doesn’t meet any of the independence criteria, so she has to provide parental
information. Because her grandmother hasn’t adopted her, her grandmother isn’t her parent. Millie will have to provide
information about her mother on the form unless there are unusual circumstances that would warrant a dependency
override or her receiving only unsubsidized loans. In any case, the school might use PJ to account for the grandmother’s
support.

Who does and does not count as a parent on the FAFSA form?
If the applicant answers “No” to questions 45–57, then he or she is dependent and must report parental
information in Step 4 on the FAFSA form. In most cases it’s clear who the parents are but not always.

Count: Biological, adoptive, and stepparents

A parent is a biological or adoptive parent or a person that the state has determined to be a parent (for example,
when a state allows another person’s name to be listed as a parent on a birth certificate). A stepparent is
considered a parent if married to a biological or adoptive parent and if the student counts in their household size.
Biological and adoptive (whether of the opposite or same sex) parents who are unmarried and living together give
that as their status in Question 58, and both report their information on the FAFSA form. See DCL GEN-13-12.

However, a stepparent who did not adopt the student cannot be the sole parent for determining dependency
status. If the other parent dies, the student is still a dependent of the remaining biological parent, not the
stepparent. If no biological parent remains, the student answers “Yes” to Question 52 and is independent.

Do not count: Foster parents, legal guardians, and relatives

A foster parent or a legal guardian is not treated as a parent for FSA purposes. If at any time since the age of 13
both of the student’s parents were dead (and he or she did not have an adoptive parent at that time) or the
student was in foster care, he or she is independent. If the student is now, or was when he or she became an
adult, an emancipated minor or in legal guardianship (see the exceptions under Question 54), the student is
independent.

If a student is living with his or her grandparents or other relatives, their data should not be reported on the FAFSA
form as parental data unless they have adopted the student. Any cash support from persons other than the
student’s parents should be reported as untaxed income, as discussed in Step 2. The school may also consider
other kinds of support as part of the student’s financial resources and use professional judgment to include the
support under the item for student’s untaxed income (see Chapter 5 on professional judgment).

Other sources of support for children and other household members

If the student is receiving support to raise his or her child, is the child still considered a legal dependent? If one or
both of the student’s parents are directly or indirectly providing more than 50% support in cash or other
assistance to the child, then the student would answer “No” to the FAFSA question about legal dependents.
“Indirect support” to the child includes support that a parent gives to the student on behalf of the child. If the
student is living with a parent who is paying for most of the household expenses, the parent would usually be
considered the primary source of support to the child, and the student would answer “No” to the question about
legal dependents. However, there may be some cases where the student can demonstrate that he or she provides
more than half of their child’s support even while living at home, in which case he or she would answer “Yes” to
the question about legal dependents.

When the student receives money for the child from any source other than his or her parents, the student may
count it as part of his or her support to the child. Sources include child support and government programs, such as
TANF and SNAP (formerly the federal Food Stamp Program), that provide benefits for dependent children. So a
student may be considered independent when the benefit he or she receives is the primary support for her child.
For example, if a student who lives alone with her child receives cash from her boyfriend that amounts to more
than 50% support for the child, then she would be able to count the child as a dependent and in her household
size, and she would be independent. If the boyfriend is the father of the child and a student himself, then he
would also be able to count the child as a dependent and in his household size, and he would be independent too.

Married (46). The student must answer this question according to his or her marital status at the time the FAFSA
form is signed; after that, the student cannot update FAFSA information for changes in his or her marital status
except in limited instances; see Chapter 4.
A student who is only engaged answers as unmarried unless he or she waits until after the wedding to complete the
FAFSA form. For this question a student is considered married if he or she is separated or planning to divorce or if he
or she has a relationship that meets the criteria for common-law marriage in their state. A student who was
independent only because he or she was married becomes dependent for the next award year if he or she divorces
and cannot answer “Yes” to any of the dependency questions.

Graduate or professional study (47). The FAFSA form asks if the student will be working on a master’s,
doctorate, or graduate certificate program at the beginning of the school year. A student who is a graduate or
professional student is independent for purposes of Title IV aid.
Graduate and professional students are not eligible for Pell grants, so a student who incorrectly answers “Yes” to this
question must submit a correction before he or she can get a Pell grant, even if he or she is independent for another
reason.

Students should fill out the FAFSA form based on their expected grade level at the beginning of the award year. If a
dependent student completes his or her undergraduate program during the year and begins graduate school, he or
she can update the answer to the dependency question so that the CPS can reprocess the student’s application, or
the aid administrator at the graduate school can recalculate his or her EFC and use it to package the student
graduate aid.

Member or veteran of the U.S. Armed Forces (48 and 49).

Veterans and persons on active duty in the U.S. Armed Forces (the Army, Navy, Air Force, Marines, or Coast Guard)
for purposes other than training are independent.

Veterans are those who were in active service and were released under a condition other than “dishonorable.” This
includes those who fraudulently entered the service, as long as their entire period of service was not voided. There is
no minimum amount of time the student has to have served to be a veteran—even one day counts and even basic
training (boot camp) counts—but it does have to be active service. (See the following rules for reservists.) This is less
stringent than the VA’s definition of a veteran for receiving certain VA benefits.

The FAFSA form also tells students to answer “Yes” to the question about veteran status if they aren’t yet a veteran
but will be by June 30, 2023.

Members of the National Guard or Reserves are only considered veterans if they were called up to active federal
duty [as defined in 10 U.S.C. 101(d)(1)] by presidential order for a purpose other than training. It does not matter
how long the active duty lasted or if the student returned to reserve status afterward, but, as with the other
qualifying veterans, the student must have had a character of service that was not “dishonorable.”

Students who attended a U.S. military academy or military academy preparatory school for at least one day
and were released under conditions other than “dishonorable” count as veterans for Title IV purposes. If they are
discharged prior to commission (known as “early exit cadets”), they might not be veterans for VA purposes, and their
match result will likely show that they aren’t veterans. As with other students who receive this result, if an early exit
cadet meets one of the other criteria for independence, no resolution is required. But if he or she meets no other
independence criteria, the student must provide the school with documentation that shows he or she was a cadet of
a military academy or its preparatory school and was released under a condition other than dishonorable. Students
serving in ROTC or currently attending a U.S. military academy are not veterans.

Military service academies and preparatory schools:

U.S. Military Academy (West Point)

U.S. Naval Academy (Annapolis)
U.S. Air Force Academy
U.S. Coast Guard Academy
U.S. Merchant Marine Academy
U.S. Military Academy Preparatory School
Naval Academy Preparatory School
U.S. Air Force Academy Preparatory School
Veteran match (for Question 49)

If the student answers “Yes” to the question about veteran status, the CPS performs a match with VA records to
confirm that status. The VA sends the result back, which appears as a match flag in the FAA Information section of
the output document. For flags 2, 3, and 4, a comment and a C flag will appear on the SAR only if veteran status is
the sole reason that the student would be independent. See the 2022-2023 SAR Comment Codes and Text Guide
on the Knowledge Center.

Successful match (match flag 1)

There won’t be any comments on the output document if the VA confirms that the student is a veteran.

Not a veteran (match flag 2)

A student will receive this flag if the VA database indicates he or she is not a veteran. If the student answered
“Yes” to one of the other dependency questions, the student is independent based on that question and can
receive student aid without resolving their veteran status.

If the student answered “No” to all the other dependency questions and he or she believes they are a qualifying
veteran, the student should provide the financial aid office at his or her school a copy of their DD214 (the
Certificate of Release or Discharge from Active Duty, with “Character of Service” as anything but “dishonorable”).
If it shows that the student is a veteran, he or she can receive aid as an independent student. A dependency
override is not necessary because the CPS accepts the student's “Yes” answer to the veteran question. If a
National Guardsman or a reservist who served on active duty (for other than training) did not receive a DD214 but
can obtain a letter from a superior officer that documents the call-up to active duty and that classifies the
character of service as anything but “dishonorable,” the student will be considered a veteran for FSA purposes. If
the student turns out not to be a veteran, he or she will need to change his or her answer to the question from
“Yes” to “No” and provide parent information, including a parent’s signature.

If the VA match problem is due to an error in the VA’s database, the student should contact the VA and correct the
error. A subsequent transaction will then redo the match with the VA.

Not in database (match flag 3)

Much of the guidance above applies for students not in the VA database: if the student is independent for a
reason other than being a veteran, he or she doesn’t need to resolve the problem before receiving student aid,
although the student should have the VA correct its database if it’s wrong. If the student answered “No” to the
other dependency questions, he or she must either correct any problem with the VA, provide documentation
showing he or she is a veteran or will be one by June 30, 2023, or, if he or she is not a veteran and will not be one
by that date, provide parent data and change their response to the question from “Yes” to “No.”

Active duty (match flag 4)

If the student is currently on active duty, he or she isn’t a veteran yet, but if his or her active duty will end by June
30, 2023, he or she counts as a veteran for dependency status. Because the student should have answered “Yes”
to the active duty question, he or she would be independent by that criterion and wouldn’t have to resolve this
situation.

Documentation of foster youth (for Question 52)

If you have cause to require documentation from students who indicate that they were in foster care since turning
13, the following are examples of documents that could attest the student’s former foster youth status: a copy of
a court order; the statement of a state or county child welfare agency; the statement of a private provider agency
that delivers child welfare services; or the statement from an attorney, guardian ad litem, or court-appointed
special advocate documenting the person’s relationship to the student as well as the latter’s foster youth status.

Children and legal dependents (50 and 51). Students who have legal dependents are independent. Legal
dependents comprise children (including those who will be born before the end of the award year) of the student who
receive more than half their support from the student, and other persons (except a spouse) who live with and receive
more than half their support from the student as of the FAFSA signing date and will continue to do so for the award
year. The same criteria apply to household size.
When a student applies after the award year has begun, in order to count a person who is not the student's child as a
dependent, the support already given that year plus the future support must total more than 50 percent for the
whole year. See Example 4 below.

Legal dependent examples

Example 1: Stanislaw’s uncle Yvor lives with him and receives a small disability payment each month. This amount
is paid directly to Yvor, so Stanislaw doesn’t report it as income on the FAFSA form. The payment is small enough
that Stanislaw is still providing more than half of Yvor’s support, and because he expects to continue to provide more
than half support during the award year, he includes Yvor as a dependent in his household size. However, Yvor
expects to also start receiving a pension late next year. The combination of the pension and the disability payment
will be enough that Stanislaw won’t be providing more than half of his uncle’s support and therefore won’t be able to
include Yvor in his household size after this award year.

Example 2: Laurel is going to college and is her cousin Paul’s legal guardian. Paul receives Social Security benefits,
but because he’s a minor, the benefits are paid to Laurel on his behalf. These benefits provide more than half of
Paul’s support. Because Paul lives with Laurel and will be supported by her (through the Social Security benefits)
throughout the award year, Laurel answers “Yes” to the legal dependent question. If Paul didn’t live with Laurel, she
would have to answer “No” to the question.

Example 3: Alan pays $4,000 to support his girlfriend, Cathy, who lives with him. She has earned income of $3,000,
and she receives $200 a month ($2,400 a year) from her parents. She uses all of this for her support. Alan cannot
consider Cathy a dependent since the $4,000 he provides is not more than half of her total support of $9,400.

Example 4: In April 2022 Anika applies for aid for both 2021–2022 and 2022–2023 award years. One month prior to
that, her cousin Bettina came to live with her. Even though Anika provides all of her cousin’s support, the month of
support she has given plus the two months left in the award year would not amount to more than 50% for 2021–
2022, so she can’t consider Bettina her dependent for that year. If Bettina had moved in before the midpoint of the
year, Anika would have been able to count her as a dependent for 2021–2022. However, because the two plan to live
together at least through June 2023, Anika can count Bettina as a dependent for 2022–2023.

Orphan, foster child, or ward of the court (52). A student who was an orphan—both his or her parents were
dead—when 13 or older is independent even if the student was subsequently adopted. Likewise, a student who was
at any time since the age of 13 a foster child or a ward of the court is independent even if his or her status
changed later.
A student is a ward of the court if it has assumed legal custody of the student. In some states the court may impose
its authority over a juvenile who remains in the legal custody of his or her parents; such a student is not a ward of
the court. Also, incarceration of a student does not qualify the student as a ward of the court. In some states the
phrase “ward of the state” is used; as long as it is not due to incarceration, this is considered the same as a ward of
the court for dependency status.

Emancipation and legal guardianship (53 and 54). Students are independent if they are, or were upon reaching
the age of majority, emancipated minors (released from control of their parent or guardian) or in legal guardianship,
both as adjudicated by a court of competent jurisdiction in their state of legal residence at the time of the
adjudication. The emancipation must be determined by a court, not by an attorney, though the basis for it can vary
by state.
Students placed in legal guardianship to their parents—e.g., if they are disabled adults and under their parents’ care
—are not independent for Title IV program purposes by this criterion and would answer “No” to Question 54.
Similarly, guardianship of a person’s estate does not qualify as a legal guardianship for this purpose; the FAFSA form
 asks, “Does someone other than your parent or stepparent have legal guardianship of you”—i.e., the student, not his
or her estate. So students would answer “No” to the question if another person has only been appointed guardian of
their estate. They should also answer “No” and contact your school if custody was awarded by a court and the court
papers say “custody” instead of “guardianship.” Most states have a clear definition of legal guardianship that is
distinct from custody, but if a given state does not, ask your school’s legal counsel for help with this question.

Unaccompanied homeless youth (55–57). A student is independent if at any time on or after July 1, 2021
(irrespective of whether he or she is currently homeless or at risk thereof), the student is determined to be an
unaccompanied youth who is homeless or is self-supporting and at risk of being homeless. This determination can be
made by: a school district homeless liaison, the director (or designee) of an emergency shelter or transitional housing
program funded by the U.S. Department of Housing and Urban Development, or the director (or designee) of a
runaway or homeless youth basic center or transitional living program. Depending on the district, these authorities
may choose to make this determination only if the student is receiving their programs’ services or if, in the case of a
school district homeless liaison, the student is in high school. An FAA may also determine this; see Chapter 5.
Students who are 22 or 23 years old, though not defined as youth in the McKinney-Vento Act, may also answer “Yes”
to these questions.

Step Four: Parents’ Information (Dependent Students Only)

Purpose: Questions 58–78 collect information about the student’s parents and their household. Questions 79–92 collect
tax and financial data for the parents, and because these questions are answered in the same way as for the student,
they were discussed earlier.

Parents’ personal information (58–68). The FAFSA form asks for parents’ marital status; the month and year
they were married, remarried, separated, divorced, or widowed; SSN; last name; first initial; and date of birth. This
data is used for the IRS DRT and helps the government estimate erroneous Pell payments. If the SSN, last name, and
birth date for at least one parent are not given, or if neither parent’s SSN matches with the SSA, the application will
be rejected. When the SSN doesn’t match, the wrong number must be corrected so that the application and SSA
agree. For a name or birth date that doesn’t match, correct the application if it’s wrong or re-enter the information if
it’s correct. If the parent doesn’t have an SSN, enter all zeros (000-00-0000) to prevent or remove a reject code. Do
not use an individual taxpayer identification number as an SSN.
Parents’ state of residence (69–71). Parents who do not live in the United States should enter “FC” for Question
69.
Household size (72). This determines the standard living allowance that offsets family income in the EFC
calculation. The following persons count in the household size of a dependent student’s parents:
The student and parents, even if the student is not living with them. Exclude a parent who has died or is not
living in the household because of separation or divorce, but include a parent who is on active duty in the U.S.
Armed Forces apart from the family.
The student’s siblings and children, if they will receive more than half their support from the student’s
parent(s) from July 1, 2022, through June 30, 2023. Siblings need not live in the home. This includes unborn
children and siblings of the student who will receive more than half support from the student’s parent(s) from
birth to the end of the award year. It also includes siblings who would be considered dependent based on the
FAFSA dependency questions (i.e., they need not be students nor apply for aid).
For children in the household size, the “support test” is used rather than residency because there may be
situations in which a parent supports a child who does not live with him or her, such as when the parent is
divorced or separated. If the parent receives benefits (such as Social Security payments) in the child’s name,
these benefits must be counted as parental support for the child.

Other persons who live with and receive more than half their support from the student’s parent(s) and will
receive more than half support for the entire award year. When the application is submitted after the start of
the year, see the relevant paragraph and example about legal dependents provided earlier in this chapter under
the “Children and legal dependents” section.
Example: Lydia is a dependent student, and her parents are married. Her brother Ron is 26, but his parents still
provide more than 50% of his support, so he is included in the household size. Her sister Elizabeth is attending
college but is an independent student and isn’t supported by their parents, so she isn’t included in the household
size. Her sister Susan is not attending college but is working and supporting herself. However, if Susan were to apply
 for student aid, she would be considered a dependent student, so she is included. Therefore, the household size that
Lydia reports for her parents is five.
Foster children in household size: Typically foster children do not count in the household size as their costs are
covered by foster care payments. However, children in “kinship foster care” for whom no benefits are provided can
count in the household size if they meet the tests for other persons, i.e., if they live with and receive more than half
their support from their foster parents for the award year.

Note that the rules that decide whether someone is counted in the household for FSA purposes aren’t identical to the
IRS rules for determining dependents or household members.

Reporting information in cases of death, separation, divorce, and

remarriage

Death of a parent

If one, but not both, of the student’s parents has died, the student answers the parental questions about the
surviving biological or adoptive parent and does not report any financial information for the deceased parent. If
both parents are dead when the student completes the FAFSA form, he or she must answer “Yes” to Question 52,
making him or her independent. Remember that an adoptive parent counts as a parent, but a legal guardian does
not. If the surviving parent dies after the FAFSA form has been filed, the student must update his or her
dependency status and report income and assets as an independent student.

Stepparent

A stepparent is treated like a biological parent if the stepparent has legally adopted the student or if the
stepparent is married, as of the date of application, to a student’s biological or adoptive parent whose information
will be reported on the FAFSA form. There are no exceptions. A prenuptial agreement does not exempt the
stepparent from providing information required of a parent on the FAFSA application. The stepparent’s income
information for the entire base year, 2020, must be reported even if the parent and stepparent were not married
until after 2020. See above for how to fill out the parent questions when the stepparent’s spouse (the biological
parent) dies; if the stepparent has not adopted the student, he or she would no longer provide parental
information as before, but any financial support they give to the student would be counted as untaxed income.

Divorce of the student’s parents

If the student’s parents are divorced, he or she should report the information of the parent with whom they lived
with longer during the 12 months prior to the date he or she completes the application. If the student lived equally
with each parent or did not live with either one, then he or she should provide the information for the parent from
whom he or she received more financial support or the one from whom he or she received more support the last
calendar year for which it was given. Note that it is not typical that a student will live with or receive support from
both parents exactly equally. Usually you can determine that the student lived with one of the parents more than
half the year or that he or she received more than half support from one of the parents. Example: Marta is 22 and
doesn’t meet any of the independence criteria. Her parents divorced recently, and she has not lived with them
since she was 18. Also, neither parent provided support in the past year. The last time she received support from
her parents was when she lived with them and they were still married. Because her father’s income was larger
and he contributed more money to the overall household expenses, Marta determines that the last time she
received support, most of it was from her father. She provides his data on the FAFSA form.

If biological or adoptive parents who are divorced still live together, their status is unmarried and living together
and both would report their information on the FAFSA form; see “Who does and does not count as a parent on the
FAFSA form” section earlier in this chapter for more information. If one or both of them have married someone
else and all live in the same household (and presumably the student lived with both parents an equal amount of
time), the parent and stepparent, if applicable, who provided more support in the previous year would include
their information on the FAFSA form. Schools may use PJ to account for the other parent’s financial contribution
that is not already properly counted as child support on line 44c or money received on line 44i of the 2022–2023
FAFSA form.

Separation of the student’s parents or the student and spouse

A couple need not be legally separated to be considered separated—they may deem themselves informally
separated when one of the partners has left the household for an indefinite period and the marriage is severed.
For a dependent student, use the rules for divorce to determine which parent’s information to report. While a
married couple that lives together can’t be informally separated, in some states they can be legally separated. If
their state allows this, and if they are still living together and are legally separated, then that is their status on the
FAFSA form unless they are the parents of a dependent student, in which case their status is unmarried and living
together and both would report their information.

Common-law marriage

If a couple lives together and has not been formally married but meets the criteria in their state for a common-law
marriage, they should be reported as married on the FAFSA form. If the state doesn’t consider their situation to be
a common-law marriage, then they aren’t married; parents of a dependent student would report that they are
unmarried and living together. Check with the appropriate state agency concerning the definition of a common-
law marriage.

Number in college (73). The applicant always counts in the number in college, but parents do not. Others
included in the household size are also included in the number in college if they are or will be enrolled at least half
time during the award year in any eligible degree or certificate program at a school eligible for any of the FSA
programs. The definition of half-time enrollment for this question must meet the federal requirements even if the
school defines half time differently. (See Volume 1: Student Eligibility for enrollment status requirements.)
Service academies, household size, and number in college

Students at U.S. service academies have most of their educational expenses paid for by the federal government.
Because of this, their families cannot “reasonably be expected to contribute to their postsecondary education” and
they are not counted in the number in college in the families of either dependent or independent students. Since
they will not receive more than one-half of their support from any person, they also do not count in the household
size of any independent students and some dependent students. However, if a service academy attendee is a sibling
of a dependent student and can answer “No” to all the dependency status questions, he or she would count in the
household size of that dependent student. [HEA Sec. 474(b)(3); 480(k),(l)]

Number in college

HEA Sec. 474(b)(3)

Receipt of means-tested federal benefits by anyone in the household (74–78). This as an alternative for the
tax return requirement of the simplified needs and automatic zero EFC tests.
Tax forms filed by parents, filing status, income, and assets (79–82, 84–92). Refer to the earlier discussion
for these questions.
Dislocated worker (83). This status, as defined in the Workforce In- novation and Opportunity Act or WIOA, is an
alternative to the tax return and means-tested federal benefits criteria for determining if a person qualifies for the
simplified needs test or automatic zero EFC. A person would answer “Yes” to this question if he or she meets the
statutory definition of dislocated worker but does not appear to because of the general nature of the FAFSA
instructions. Under the WIOA, a dislocated worker is someone who falls into at least one of these categories:
A person who meets all of the following requirements:
He or she was terminated or laid off from employment or received a notice of termination or layoff.
He or she is eligible for or has exhausted his or her unemployment compensation, or he or she is not
eligible for it because, even though they have been employed long enough to demonstrate attachment to
the workforce, he or she had insufficient earnings or performed services for an employer that weren’t
covered under a state’s unemployment compensation law.
He or she is unlikely to return to a previous industry or occupation.
A person who was terminated or laid off from employment or received a notice of termination or layoff as a
result of any permanent closure of, or any substantial layoff at, a plant, facility, or enterprise
A person who is employed at a facility at which the employer made a general announcement that it will close
within 180 days
A person who is employed at a facility at which the employer made a general announcement that it will close
A self-employed person (including farmers, ranchers, or fishermen) who is unemployed because of natural
disasters or because of general economic conditions in his or her community
A spouse of an active-duty member of the Armed Forces who has experienced a loss of employment because of
relocating due to permanent change in duty station
A spouse of an active-duty member of the Armed Forces who is unemployed or underemployed and is
experiencing difficulty in obtaining or upgrading employment
Displaced homemakers who meet all of the following criteria:
They have been providing unpaid services to family members in the home.
They have been dependent on the income of another family member but are no longer supported by that
income.
They are unemployed or underemployed and having trouble getting or upgrading employment. An
underemployed person is one working part time but who wants to work full time or is working below the
demonstrated level of his or her education or job skills.
Not everyone who receives unemployment benefits will meet the definition of dislocated worker. For example, in
general those who quit their jobs are not considered dislocated workers, even if they are receiving unemployment
benefits.
You are not required to verify the answer to this question. If you choose to verify it, documentation can include, as
appropriate to the category, a letter or a layoff or termination notice from the employer, unemployment insurance
(UI) system verification, tax returns, a business license, or newspaper articles. You may also use documents from the
state workforce agency or a “one-stop career center,” though they are not required to provide you such
documentation and a person may meet the dislocated worker definition without going to the workforce investment
system for services. Absent all other evidence, self-certification will suffice, such as a statement signed by the person
affirming that he or she meets the definition of dislocated worker.

Information from the workforce investment system. The local workforce investment system and state UI
agency may support financial aid administrators by

providing general information to dislocated workers;

providing general information to financial aid administrators, such as the WIOA definition of dislocated workers
and appropriate samples of documentation that financial aid offices can request from an individual to verify
dislocated worker status;
providing specific information to dislocated workers. A person can request documentation from the career
center or other appropriate office that he or she is receiving dislocated worker services through the workforce
investment system. That office can give the documentation to the student, or at his or her request it may (but is
not obligated to) give the documentation directly to the college.
If you must determine if someone is a dislocated worker, you have sole responsibility and must make the
determination regardless of whether the person has proof of dislocated worker status—or is receiving dislocated
worker services—from the workforce investment system.
Note that a response of “Don’t know” on the FAFSA form is treated as “No” by the CPS. If a person gives this
response to Question 83 or 100, you are not required to verify it, but you may want to determine if he or she is a
 dislocated worker and if that would affect the student’s eligibility for federal aid.

Step Five: Independent Student Data

Purpose: Questions 93–100 collect information about independent students. Only students who answered “Yes” to one or
more questions in Step Three complete this step.

Student’s household size (93). The following persons are included in the household size of an independent
student:
The student and his or her spouse, unless the spouse has died or is not living in the household due to
separation or divorce.
The student’s children, regardless of where they live, if they will receive more than half of their support from
the student (and spouse) from July 1, 2022, through June 30, 2023. This includes the student’s unborn children
who will be born during the award year and will receive more than half their support from the student from birth
to the end of the award year.
Other persons who live with and receive more than half their support from the student and will receive more
than half support for the entire award year. For FAFSA forms submitted after the start of the year, see the
relevant paragraph and example about legal dependents provided earlier in this chapter under the “Children
and legal dependents” section.
Example: Eddy is an independent student. He was married, but now he and his wife have separated. He’s
paying child support, but it isn’t enough to provide more than half his children’s support, so he can’t include his
children in his household size. Eddy’s nephew Chavo lives with him and gets more than half of his support from
Eddy (and will do so for the award year), so he can be counted in Eddy’s household size, which is two. Having
just turned 24, Chavo is also considered independent on his own FAFSA form, and his household size is one.

Number in college (94). The student is always included in the number in college. Also included are those in the
household size who are or will be enrolled at least half time during the award year in a degree or certificate program
at a Title IV-eligible school and who can reasonably be expected to receive aid from the family for their education.
The definition of half-time enrollment for this question must meet the federal requirements even if the school defines
half time differently.
Example: Under the previous example, Eddy would report two in the household and two in college, while Chavo
would report one in his household and one in college.

Receipt of means-tested federal benefits by anyone in the household (95–99). This is an alternative for the
tax return requirement of the simplified needs and automatic zero EFC tests.
Dislocated worker (100). See the explanation of Question 83 discussed earlier under Step Four.

Step Six: School Information

Purpose(101): These items collect information about which colleges the student wants to receive his or her FAFSA
information. For a college to be able to receive the student's data, the student must list the college’s federal school code
(not the OPE ID) or enter its complete name, address, city, and state. There is a federal school code search in the online
FAFSA form, and the entire list of school codes is available in Excel on the Knowledge Center website Library section’s
“Publications by Resource Type” area.

For each school the student indicates whether he or she expects to live on or off campus or with his or her parents. This
information is not used to calculate the EFC, but it is useful to schools for determining the cost of attendance.

The student can list up to four schools on the PDF FAFSA form and 10 on the web (at least one is required). If he or she
wants their information to be available to more schools, he or she can change the schools listed online or use their SAR.
The CPS will send data to no more than 10 (four with the PDF FAFSA form) schools at a time. Chapter 4 explains how
students can add or change schools.

The ISIR will only display the federal school code and corresponding housing code of the receiving school. The information
of other schools the student included on the FAFSA form will not appear except on the SAR and on ISIRs sent to state
grant agencies. See The ISIR Guide 2022–2023.
Step Seven: Signature(s)
Purpose: By signing the FAFSA form, the applicant is assuming responsibility for the accuracy of the information
reported.

Date and signature(s) (102–103). In addition to certifying that the data on the FAFSA form is correct, the student
is also signing a statement of educational purpose, which is required to receive FSA funds. Among other things, the
student agrees to spend FSA funds only on educational expenses and affirms that he or she is not in default on a
federal loan or does not owe a grant overpayment. If the student is dependent, one parent whose information is
reported on the FAFSA form must also sign.
Substitutes for a parent’s signature. While parent information must be provided for a dependent student, a high
school counselor or a college aid administrator may sign the application in place of a parent if:

the parents are not currently in the United States and cannot be con- tacted by normal means,
the current address of the parents is not known, or
the parents have been determined physically or mentally incapable of providing a signature.
The signer must provide his or her title in parentheses next to his or her signature and briefly state the reason (only
one is needed) why he or she is signing for the parents; if this is not done, the FAFSA form will not be
processed. The signer assures a minimum level of credibility in the data submitted; however, he or she does not
assume any responsibility or liability in this process. If the counselor or FAA finds any inaccuracies in the information
reported, they should direct the student to send the SAR through the normal correction process or, if he or she is an
FAA, they can submit corrections through FAA Access to CPS Online. Because this proxy signing isn’t possible
electronically, it must be done on a paper FAFSA or on the signature page/FAFSA summary used with FAA Access.
Preparer’s ID and signature (104–106). Only persons who are paid a fee to help the student complete the
application are considered FAFSA preparers. Those who advise students without charging a fee, such as high school
counselors and FAAs, are not preparers. A preparer must include his or her name, his or her company’s name (if
applicable), his or her address or the company address, and either his or her SSN or the company employer
identification number (EIN, as assigned by the IRS). With the paper FAFSA form, the preparer must also sign and date
the form.
Preparers have other obligations. In their advertising and initial contact with a consumer, including via the Internet or
phone, they must clearly inform him or her that the FAFSA form is free and can be completed electronically or on
paper without professional help. If they have a website for their service, it must link to FAFSA on the Web. They may
not use any form other than the FAFSA form to apply for Title IV aid.

A preparer who knowingly falsifies information on the application is subject to the same penalties as an applicant.

Copies of signed documents

While you will often receive documents with original or “wet” signatures from the student (e.g., a paper FAFSA form
that the student has worked on and signed while in your office), there might be an occasion where the student gives
you a copy or sends you a fax of a signed document. Except for a copied FAFSA form, other imaged versions of the
original signed document are valid and may be retained.

Assistance in preparation of the FAFSA

HEA Sec. 483(d)

Signatures for electronic applications

FAA Access to CPS Online

 If you enter a student’s original application through FAA Access to CPS Online, you must obtain original or “wet”
signatures on the printed signature page/FAFSA summary or on a completed paper FAFSA form, and you must
keep the signed document in the school files even if the student does not receive federal student aid or attend
your school. You may electronically store the original document, but you may not accept faxed or copied
signatures from the student for the FAFSA form. (You have more latitude regarding verification documents and
changes to the application; see Chapter 4)

FAFSA online

Students who have an FSA ID can electronically sign their FAFSA form. Parents who have an FSA ID can also
electronically sign. When all the necessary signatures are provided electronically, the application will be
processed within 72 hours. Students and parents also use the FSA ID to sign the application in the FAFSA feature
of the myStudentAid mobile app, but the other options below are not available in the app.

Alternately, students can print the signature page, sign it, and mail it to the processor. If the processor doesn’t
receive the signature page within 14 calendar days of receiving the application data, it will mail a “reject 16”
(missing student signature) SAR to the student, which the student can sign and return. If the student chooses not
to print and send a signature page, or if no printer was available, the processor won’t wait 14 days to print a
rejected SAR for the student but will generate one within 72 hours of receiving the data. See the announcement of
March 18, 2019, for a list of what are valid and invalid signatures.

If the student indicated on an electronic FAFSA form that he or she would print, sign, and mail in a signature page
but the processor has not received the signature page, the student can call the FSAIC and have their record
released from the FAFSA hold file. Because no signature page has been received, the FAFSA processor will
produce a rejected SAR and mail it to the student to sign and return. The processor will accept the first signature
document it receives—either the signed signature page or the signed SAR.

Schools and states receive ISIRs for rejected records. A student’s reject 16 SAR and his or her ISIR will reflect the
data that he or she provided on the application; however, the CPS won’t calculate an official EFC for the student
(an unofficial EFC that cannot be used to award or disburse aid will appear on the ISIR) or do any database
matches until it receives a signed signature page, a signed SAR, or an electronic signature. A school can also
collect the required “wet” signatures at the school, either on the SAR or a document that has the required
certification statements (FAA Access allows schools to print out a signature page for the ISIR). The school can then
submit an electronic correction showing that the signatures have been provided.

When a parent of a dependent student doesn’t sign with his or her own FSA ID, the student can print a signature
page for the parent. If the student indicates that no printer was available, the CPS will generate a “reject 15”
(missing parent signature) output document for the student within 72 hours. If the student indicated he or she
would send in a signature page, the processor will wait up to 14 calendar days to receive the signed page. If it
doesn’t receive a signed signature page after 14 days, it will generate a reject 15 SAR and send it to the student.
The student must have a parent sign the SAR and must send it back to the address on the SAR. For reject 15
records, a student’s SAR and ISIR will reflect the data provided on the application, but the processor won’t
calculate an EFC for the student until it receives the parent’s electronic signature or the signed SAR or signature
page.

Signature requirements for changes made after the FAFSA form is filed will be discussed in Chapter 4.

Signature Requirements: Application and Verification for All FSA Programs

Application (FAFSA IRS Documentation (Transcript or other form Verification

online, myStudent mobile submitted for verification) Document
app, PDF FAFSA, FAA
Access to CPS Online)
 Student Must sign statement that IRS Data Retrieval Tool (DRT) or tax return Must sign
data are accurate and other transcript (which does not need to be signed). In documents
conditions are met (on paper rare instances when the tax return is used, it must used to
FAFSA, web summary, or be signed by the student (or spouse), or the tax verify FAFSA
signature page or by using preparer must provide his or her name and SSN, data
the FSA ID) EIN, or PTIN.

Parent(s) (if One parent must sign DRT or tax return transcript (which does not need to One parent
student is statement that data are be signed). In rare instances when the tax return is must sign
dependent) accurate (on paper FAFSA, used, it must be signed by one parent, or the tax documents
web summary, or signature preparer must provide his or her name and SSN, used to
page or by using the FSA ID) EIN, or PTIN. verify FAFSA
data.

Aid Must certify if overriding N/A N/A

Administrator dependency status or using
PJ (can’t be done in the
FAFSA online)

Signature Requirements for Changes *

Changes via SAR or Corrections on the Web Changes submitted Professional

via FAA Access Judgment via
FAA Access

Student Must sign corrections statement on the SAR; on the N/A N/A
web the FSA ID serves as the student’s signature.

Parent(s) (if If parent data are changed, one parent must sign N/A N/A
student is with FSA ID on the web, sign the corrections
dependent) statement on the SAR, or print and sign the signature
page.

Aid N/A School must have Must certify for

Administrator signed PJ/FAA adjustments
documentation from or dependency
student and parent override

*These requirements apply to any submission of changes to the CPS, whether required by regulation (for Pell Grant recipients or corrections to data
match items) or at the discretion of the financial aid administrator (for Campus-Based aid and Direct Loans). See “Submitting changes via FAA Access
to CPS Online or EDE” in Chapter 4 for a fuller explanation of what is required when submitting changes to the CPS.