Will my teen's Social Security dependent benefits affect his college financial aid eligibility?

My daughter went through this last year. The dependent benefits from Social Security do NOT count as the child's income for tax purposes. The benefits belong to the child, but they're generally not taxable unless the child has other income that pushes them over the threshold. For FAFSA, however, they DO count as untaxed income that you need to report. It's confusing because the treatment is different for taxes vs. financial aid!

I work with families navigating college financial aid. Social Security benefits received by a child of a disabled parent count as untaxed income on the FAFSA form. This means they will be counted in the Expected Family Contribution calculation. However, they are NOT considered taxable income on federal tax returns unless combined with other income that exceeds certain thresholds. Make sure you report these benefits accurately on the FAFSA to avoid potential penalties or adjustments later.

To clarify for everyone: Generally, if the Social Security benefits are the child's ONLY income, they likely don't need to file taxes. However, if your child has other income from jobs or investments, then you'll need to look at the total. For 2025, if their total income exceeds $13,850 (standard deduction for single filers), then they would need to file, and some portion of the SS benefits might become taxable. The FAFSA, however, counts these benefits regardless of whether they're taxable.

I've dealt with this EXACT situation with both of my kids. Let me tell you, it's a NIGHTMARE getting straight answers from Social Security OR the financial aid office! What we discovered: 1) College financial aid offices count SS benefits as "untaxed income" on FAFSA 2) This SIGNIFICANTLY reduced our aid package 3) We had better luck applying to private colleges with good institutional aid than relying on federal aid because private schools sometimes have more flexibility with their own scholarship funds. GOOD LUCK - the system is designed to be confusing!

I tried calling the SSA office to ask the same question when my son was applying to colleges and spent THREE HOURS on hold before getting disconnected. I called back the next day and waited another 2 hours! When I finally got through, the person wasn't even certain about how it affects FAFSA. Anyone trying to reach Social Security should check out Claimyr.com - it got me through to a real person in under 20 minutes. They have a video that shows how it works: https://youtu.be/Z-BRbJw3puU. Seriously saved my sanity during the whole college application process.

It did for me! I was skeptical too but was desperate after multiple failed calls. They basically navigate the phone system for you and call when they get an agent. Much better than wasting hours on hold. My advice is to have all your questions written down before they connect you because once you get through, you want to make the most of it.

Thanks everyone for all this advice! I'm going to try talking to both SSA and the financial aid offices at the colleges my son is interested in. Seems like there's no simple answer, but at least I know which questions to ask now. I'll definitely check out that service if I can't get through to SSA. The whole system is so complicated - I just want to make sure my son gets a fair shot at financial aid without losing his benefits!

My son lost most of his financial aid becuz of SS benefits. But he still qualified for some grants and scholorships. Make sure ur kid applies for EVERYTHING even if u dont think hell get it. My son got a random $2500 scholorship from a local business just by filling out a 1 page form!!!

Just a final note: one strategy some families use is to put the Social Security benefits into a dedicated college savings account (not a 529, as that would still count as an asset). Then when your child is in their junior year of high school, you can use those funds to pay for necessary family expenses, which can indirectly help your EFC calculation for FAFSA. This requires planning ahead, but might be something to consider if your son is still a couple years from college.