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.