VA disability payments on FAFSA - not showing up correctly with new automatic system?

You're right to be concerned - VA disability payments are still supposed to be non-taxable and excluded from FAFSA income calculations. The new FAFSA system has an area where you can report special circumstances and corrections. After the tax data transfers automatically, look for the "Special Circumstances" section where you can indicate that a portion of your income should be excluded. You'll need to specify that the amount is VA disability and therefore non-taxable for financial aid purposes. Keep documentation ready in case verification is needed later.

My husband gets VA disability too and Im freaking out about this exact same thing!!! we did our sons fafsa last week and I don't remember seeing ANY place to enter corrections for the VA money. did anyone actually find it or are we just supposd to hope for the best?? 😫

The system is SO buggy this year! I spent 3 hours trying to figure this out for my VA disability too. After you submit initially, go back in and look for "Review and Correct" option, then find "Special Circumstances" under the financial section. But honestly, half the time the site crashed when I tried to access it. I ended up having to call FSA directly and after waiting on hold for 2 HOURS they finally helped me manually override the income amount. Complete nightmare compared to previous years.

So I actually just dealt with this exact issue last week. VA disability benefits remain non-taxable and should NOT be included in your FAFSA income calculations. Here's what you need to do: 1. Let the system pull your tax data automatically 2. After submission, go to "Make Corrections" option 3. Navigate to the "Special Circumstances" section 4. Select "Income Exclusion" and specify "VA Disability Benefits" 5. Enter the annual amount from your VA award letter 6. Submit documentation when prompted (usually your VA award letter and maybe tax transcript showing the difference between box 1 and box 3) What's happening is the automatic system is pulling box 1 from your taxes, but you need to manually tell it which portions should be excluded from the calculation. This is definitely different than previous years where we manually entered the correct figures upfront.

i thought VA benefits weren't supposed to be counted anyways? why are they making this so complicated lol just another reason FAFSA is broken

I actually tried calling Federal Student Aid about this exact issue yesterday and got nowhere. After 90 minutes on hold, I got disconnected. Tried again, another 45 minutes, disconnected again. I was about to give up when another parent suggested I try Claimyr.com - it's a service that holds your place in the phone queue and calls you when an agent is about to answer. I was skeptical but watched their demo video (https://youtu.be/TbC8dZQWYNQ) and decided to try it. They actually got me through to an FSA agent in about 45 minutes without me having to stay on the phone. The agent confirmed that VA disability payments should still be excluded and walked me through the whole correction process step by step. Turns out there's a specific section for this but it's only accessible after initial submission, which is super confusing. Definitely recommend getting official guidance directly from FSA on this.

wait so does everyone need to submit the fafsa first THEN go back and fix stuff??? i've been waiting to submit until i figured this out but maybe i'm doing it backwards

GUYS I JUST FOUND IT! After you submit the FAFSA, go back in through the "Make FAFSA Corrections" link, then go to Student Financial Information (or Parent Financial Information depending on whose VA benefits they are). There's a little link at the bottom that says "Special Circumstances" that I completely missed before. Click that, then select "Income Type Exclusion" and THAT'S where you can enter VA disability to be excluded. Hope this helps someone else!

Just wanted to add my experience as another data point - I'm a veteran receiving VA disability compensation and just went through this process successfully. The key thing that helped me was understanding that the new FAFSA system is designed to be "submit first, correct later" rather than the old "get it perfect before submitting" approach. After following the steps others outlined here (submit → corrections → special circumstances → income exclusion), my son's SAI dropped significantly once the VA disability was properly excluded. The whole process took about 20 minutes once I knew where to look, but finding that information was the hard part! One tip: when you're in the Special Circumstances section, make sure to be very specific in your description. I wrote "VA Service-Connected Disability Compensation - Non-taxable per 38 USC 5301" and included both my award letter and the relevant pages from my tax return showing the difference between adjusted gross income and taxable income. Better to over-document than under-document with financial aid.

As a veteran myself, I can confirm that VA disability compensation should absolutely NOT be counted as income for FAFSA purposes. The new system is definitely more confusing than before, but here's what worked for me: 1. Don't stress about the initial submission pulling the wrong numbers - that's expected 2. After you submit, wait 24-48 hours for processing, then log back in 3. Look for "Make FAFSA Corrections" (not "Review" - that's different) 4. Under the income section, scroll ALL the way down - the "Special Circumstances" link is easy to miss 5. Select "Income Exclusion" and specifically choose "Veterans Benefits" from the dropdown 6. Enter your annual VA disability amount and upload your award letter The system will recalculate your SAI within a few days. I also recommend calling your school's financial aid office to let them know you've made this correction - they can sometimes expedite the review process. Don't let the confusing interface discourage you from getting this fixed - it makes a huge difference in aid eligibility!

I'm going through this exact same situation right now with my daughter's FAFSA! I receive 100% VA disability and was panicking when I saw the system pulled our full AGI instead of just taxable income. Reading through all these responses has been incredibly helpful - I had no idea about the "submit first, correct later" approach with the new system. Just to confirm what others have said: I followed the steps (submitted FAFSA → waited for processing → made corrections → found Special Circumstances at the bottom → selected Income Exclusion for Veterans Benefits) and it worked perfectly. My daughter's expected family contribution dropped by over $9,000 once the VA disability was properly excluded! For anyone still struggling to find it: the "Special Circumstances" link is really easy to miss because it's at the very bottom of the financial information page in small text. I must have scrolled past it three times before I spotted it. Also make sure you have your VA award letter ready to upload - the system requires documentation for the exclusion. Thanks to everyone who shared their experiences here. This community is a lifesaver for navigating these bureaucratic nightmares!

I'm a veteran who just went through this exact process last month and wanted to share what I learned. The new FAFSA system is definitely confusing, but the VA disability exclusion process does work once you know where to find it. Here's what I wish someone had told me upfront: the automatic data retrieval is designed to pull ALL income first, then you correct it afterward. It's not a bug - it's how they built the system. The VA disability exclusion happens in the "Special Circumstances" section that only becomes available after your initial submission is processed. One thing I haven't seen mentioned here is timing - don't panic if it takes 3-5 business days for your corrections to show up in the system. I kept checking every few hours thinking something went wrong, but it just takes time for the recalculation to process. Also, if you have multiple kids going to college, you'll need to make this correction on each separate FAFSA - the system doesn't automatically apply it across applications. The good news is that once you do it for one kid, you'll know exactly where everything is for future years. Just make sure to keep your VA award letter handy because you'll need to re-upload documentation each year. Hope this helps ease some stress for fellow veterans navigating this new system!

As a newcomer to this community and the FAFSA process, I just want to say thank you to everyone who has shared their experiences with VA disability and the new FAFSA system. My husband is a veteran receiving disability compensation, and I've been completely overwhelmed trying to figure out how this new automatic system works compared to what I've heard about previous years. Reading through all these detailed step-by-step instructions has been incredibly reassuring. The "submit first, correct later" approach definitely feels backwards to me, but now I understand that's just how the system is designed. I'm particularly grateful for the specific details like where to find the "Special Circumstances" section (apparently it's easy to miss at the bottom!), what documentation to have ready (VA award letter), and realistic expectations about processing times (3-5 business days). This is our first time doing FAFSA for our daughter, and I was honestly panicking that we might mess up her financial aid eligibility. But seeing how many other families have successfully navigated this VA disability exclusion process gives me confidence that we can figure it out too. The community support here is amazing - thank you all for taking the time to help newcomers like me!