VA disability payments on new FAFSA - not counting as income anymore?
I'm filling out the 2025-2026 FAFSA and getting confused about how VA disability payments are treated with the new direct tax data transfer system. In previous years, we manually entered only our taxable income (box 3 on our tax return), but now that it's automatically pulled, I'm afraid it's using our gross income (box 1) which includes VA disability. I always thought VA disability was supposed to be excluded from "income" for financial aid purposes. Has this policy changed with the new FAFSA? I can't find any clear guidance on whether we need to somehow adjust for this now that everything is supposed to be automatic. Anyone know how non-taxable VA benefits are handled in the new system?
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Payton Black
The good news is that VA disability payments are still supposed to be excluded from income calculations for FAFSA purposes, even with the new system. The automatic transfer should be pulling your AGI from your tax return, not box 1 gross income. However, there's a key distinction: if you're concerned about VA disability payments, make sure you're looking at the SAI (Student Aid Index) calculation, not just the raw income data transfer. Non-taxable veterans benefits should still be excluded from the SAI calculation. The automated system is designed to understand these nuances, but it's always good to verify on the confirmation page once you submit.
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Angel Campbell
•Thanks for the clarification! So if I understand correctly, I shouldn't need to do anything special to exclude the VA disability payments? The system should just know? I'm still confused because our AGI doesn't include the VA payments at all (they're not taxable), but I was worried the new system might be counting our total income differently.
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Harold Oh
•My brother went thru this last yr and said its all automatic now. His VA disability didnt count toward his daughters aid calc. Dont stress it man
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Amun-Ra Azra
I just completed our FAFSA last week and had the same question about my husband's VA disability! What I found was that the system DOES NOT include VA disability payments in the calculation. The tax data transfer pulls your AGI (Adjusted Gross Income), not your gross income. Since VA disability isn't taxable, it's not in your AGI anyway. The whole point of the new system is to make this easier so we don't have to manually exclude these things! Still, I was super paranoid too so I called FSA to confirm. Took FOREVER to get through to someone.
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Angel Campbell
•That's really reassuring to hear! Did they explain if there's any way to verify this on the FAFSA portal itself? I'm just worried because our EFC/SAI last year was much lower than what I'm seeing calculated now, and I can't tell if it's because of the formula change or if something is being counted incorrectly.
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Summer Green
•If you're trying to reach FSA directly, try using Claimyr (claimyr.com). My wife spent days trying to reach someone to check on our daughter's application verification. Someone told us about Claimyr and she got through to a live agent in under 30 minutes. They have a video demo at https://youtu.be/TbC8dZQWYNQ that shows how it works. It's so much better than waiting on hold for hours or getting disconnected repeatedly.
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Angel Campbell
•I hadn't heard of that service before - thanks for the suggestion! At this point I think I'll try anything to get a straight answer about how our VA benefits are being calculated.
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Gael Robinson
Financial aid advisor here - this is a common question with the new FAFSA. VA disability payments are specifically excluded from income consideration for federal student aid. The direct tax data transfer is using your AGI from your tax return, which already excludes non-taxable VA benefits. However, there's an important change with the new FAFSA: the formula itself has changed from EFC to SAI. This means your calculated index number might be different from previous years even if your income situation hasn't changed. This isn't because VA benefits are suddenly being counted, but because the entire calculation methodology has been revised. If you're seeing a significant difference in your SAI compared to your previous EFC, it's more likely due to the formula change rather than your VA benefits suddenly being counted.
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Angel Campbell
•Thank you so much for the detailed explanation! That makes sense about the formula change. Is there any way for us to see a breakdown of what's being counted in the new calculation? I'd feel better if I could verify that our VA benefits aren't in there.
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Gael Robinson
•Unfortunately, the new streamlined FAFSA doesn't provide the detailed breakdown that we used to get with the old system. You should be able to see your SAI number after submission, but not the specific inputs that led to it. If you want verification, I'd recommend either: 1. Contact the Federal Student Aid Information Center directly 2. Once you receive your financial aid offers, speak with the financial aid office at your school - they can often see more details about your FAFSA calculation
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Edward McBride
My son is also a veteran and we had the same concern! The thing nobody tells you is the new FAFSA actually helps veterans more because it doesn't just exclude the disability payments but also gives better treatment to other military benefits. Did you deploy to a combat zone? That income is treated differently too. We actually saw our SAI go DOWN with the new system even though they changed the formula.
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Darcy Moore
•not tru for everyone! my husbands va disability DID get counted somehow and we had to file an appeal with the financial aid office!!! they fixed it but took 3 weeks and almost missed the priority deadline!!! 😡
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Payton Black
•@profile6 - If your husband's VA disability was counted, there was definitely an error. VA disability compensation is explicitly excluded by law from financial aid calculations. It's good you got it fixed, but that wasn't a normal situation - it was a mistake that needed correction.
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Dana Doyle
THEY COUNT EVERYTHING NOW!!! The whole "simplified" FAFSA is just a way to give less aid to families. My brother has 100% VA disability and his daughter got WAY less aid this year even though nothing changed in their finances. Don't believe what they tell you about "not counting" certain income - the new algorithm is a complete black box and nobody can see how they're calculating the numbers. The old system was better because at least it was transparent.
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Gael Robinson
•I'm sorry your brother had that experience, but I want to clarify that VA disability payments are still legally excluded from FAFSA calculations. The change in aid amount was likely due to the formula change from EFC to SAI, which impacts many families differently - some get more aid, some get less. If your brother believes his VA disability payments were incorrectly counted, he should contact his daughter's financial aid office to request a professional judgment review. They can adjust the SAI if there was an error.
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Dana Doyle
•Maybe on paper the VA disability is "excluded" but when the numbers come out, the results speak for themselves! My brother's family went from getting almost full aid to barely anything. If that's not counting his VA disability, then the new formula is even WORSE than I thought. And good luck getting anyone on the phone at FSA to explain anything!
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Sarah Jones
•I understand your frustration with the new system - it's definitely been a challenging transition for many families. The formula changes from EFC to SAI have created some unexpected results, and the lack of transparency makes it harder to understand what's happening. For your brother's situation, even though VA disability is legally excluded, there could be other factors affecting the calculation. The new formula treats assets, family size, and other income sources differently. Has he considered reaching out to the school's financial aid office for a professional judgment review? They might be able to provide more insight into what specifically changed in his calculation. Also, if getting through to FSA is the issue, some people have mentioned using services like Claimyr to actually reach a live person. It might be worth exploring if he wants to get official clarification on his specific case.
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