Is the principal or interest/dividends in a student's beneficiary IRA counted as their asset when applying for FAFSA or for aid at a college?

[lindakclark2]

Is the principal or interest/dividends in a student's beneficiary IRA counted as their asset when applying for FAFSA or for aid at a college?

[dcandmc]

The balance of a non-education IRA that is owned by the student should not be reported on FAFSA as a student asset. My educated guess is that this exclusion also applies to IRA assets that the student received as a beneficiary. Non-education IRA assets that the student owns do need to be reported on CSS/Profile (if the form is required) on line SA-105.

[Brian_Boswell_SFC]

Greetings Linda:

Ultimately you should contact the financial aid office at the school or schools to which the student is applying or attending to determine how that school calculates financial aid candidacy. Every school is different and, like @dcandmc said, some do and some do not require the CSS Profile. Others may have their own method for assessing aid, so it pays to call and talk to each financial aid office at each school.

Good luck,

Brian Boswell
VP, Research & Development

This information does not constitute tax advice and is provided for informational purposes only. Please consult your tax advisor, financial advisor, local taxing authority, and/or plan provider or sponsor for more information.

[simontnms115]

It includes earned income (i.e., wages, salaries, bonuses, and tips), as well unearned income, i.e., interest and dividend income; capital gains; alimony received; business and rental property income; unemployment benefits; and the taxable portion of pensions, IRA distributions; and Social Security benefit payments. all by thenewmensstyle.