Do I report my child's $3000 scholarship savings on FAFSA? Will it affect aid eligibility?

just report whatever's in her bank account on the day u fill out fafsa. thats what we did last year

Student assets are assessed at a higher rate than parent assets on the FAFSA. For the 2025-2026 FAFSA, student assets are assessed at 20% toward the Student Aid Index (SAI), while parent assets are assessed at a maximum of 5.64%. Since the money is in your daughter's name and account, it would be considered her asset. However, there's an important distinction: if the money is officially designated as a scholarship for specified educational expenses (which living expenses for college would qualify as), you might be able to exclude it. The key is whether it can be clearly documented as restricted scholarship funds vs. general savings.

To answer your follow-up question - moving money between accounts right before filing could potentially be flagged as asset repositioning during verification. The FAFSA asks for asset information as of the day you complete the form, but if you're selected for verification, you'd need to explain any significant account changes. A better approach would be to clearly document that these funds are restricted scholarship disbursements specifically for educational expenses. Most financial aid offices have a process for appealing the SAI calculation if you can show the money has restrictions on its use.

The $3,000 in scholarship money is technically an asset if it's sitting in a bank account when you file the FAFSA. Here's a practical solution: check if your daughter's school has a scholarship fund management option where unspent scholarship money can be held in a restricted account specifically for educational expenses. Many universities offer this service, which keeps the funds from counting as personal assets on the FAFSA. Alternatively, if the amount is relatively small like $3,000, you might consider using it for qualified educational expenses before filing. Purchasing next semester's textbooks, paying a housing deposit, or pre-paying certain qualified expenses could reduce the reportable assets while still using the money for its intended purpose.

I tried calling FSA about this exact situation last month and was on hold for TWO HOURS before getting disconnected. So frustrating when trying to get simple answers. Anyone else have this problem reaching them?

My daughter graduated last year and we found out the hard way that money in her account affected her aid. Wish we knew sooner but at least you're asking now! What we did wrong was not keeping documentation showing it was scholarship money specifically for educational expenses. Make sure you have those papers!

The FAFSA system is completely broken for responsible students. My honest advice? Spend the money before you file. Buy her a laptop for school, pay for meal plans in advance, anything that counts as an educational expense. The system LITERALLY punishes students for saving money instead of blowing it all!!! It's mind-boggling that we're teaching our kids to be financially responsible while the financial aid system does the exact opposite.

I'm so confused about all this FAFSA stuff. My son is starting college next year and has some money saved from his summer job. Does that count differently than scholarship money? And what about our 529 plan? Does that get reported differently? I feel like I need a financial aid dictionary just to understand the forms.

just wanna add that my kids financial aid officer told us its usually not worth worrying about unless its over like $10k. small amounts dont change the SAI that much

I went through this exact situation with my daughter last year! Here's what I learned: scholarship money sitting in a bank account does count as a student asset on FAFSA, but there are ways to handle it. First, keep all documentation showing the money came from scholarships - this is crucial if you need to appeal later. Second, consider timing your FAFSA filing strategically. If your daughter can use some of that money for legitimate educational expenses before you file (like buying textbooks, paying housing deposits, or pre-paying utilities), it reduces the reportable asset amount. At 20% assessment rate for student assets, $3,000 would potentially reduce aid by about $600, so it's worth managing carefully. Also check if her school offers a scholarship fund management service - some universities will hold unused scholarship money in restricted accounts that don't count as personal assets on FAFSA.