Both the FAFSA and CSS Profile require business owners to report the net worth of their business. However, the reported net worth is not counted dollar-for-dollar as a parent asset available for college. Instead, both applications calculate an adjusted net worth for a business before including it as a parent asset. The same applies to farms.
How to calculate business net worth
By FAFSA’s guidance, the net worth of a business is calculated by taking tangible assets owned by the business and subtracting debt against those tangible assets. Examples of tangible assets would be:
- Property owned by the business
- Vehicle
- Equipment
- Value of sellable goods
- Cash in the business
More favorable treatment for business assets
This more favorable treatment means that when an asset is held by a business entity, it has a lesser impact on a student’s aid eligibility. A common example is a rental property. When the rental property is titled to a business instead of directly titled to a parent, the net worth can be reported as a business asset.
Here’s an example.
| Ownership by | Net worth | Net worth as parent asset | contribution to student aid index |
|---|---|---|---|
| Business | $350,000 | $158,000 | $7,900 |
| Direct | $350,000 | $350,000 | $17,500 |
| Difference | -$192,000 | -$9,600 |
Calculation for business assets
Here is the adjusted net worth calculation for the 2025-26 FAFSA (CSS Profile also follows this calculation). You can enter the net worth of your business to understand what adjusted net worth would be used when calculating parent assets available for college. The financial aid applications will calculate a roughly 5% ability to pay from this adjusted net worth.