The reported net worth of a business is not counted dollar-for-dollar as a parent asset available for college. Instead, both FAFSA and CSS Profile 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
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 than when an asset is held directly by a parent. A common example is a rental property. When a rental property is titled to a business rather than a parent, its net worth can be reported as a business asset.
Here’s an example:
A rental property has equity or net worth = $350,000.
| Ownership by | Net worth | Net worth as parent asset | contribution to student aid index |
|---|---|---|---|
| Business | $350,000 | $158,000 | $7,900 |
| Parent | $350,000 | $350,000 | $17,500 |
| Difference | -$192,000 | -$9,600 |
Calculation for business assets
Here is the adjusted net worth calculation for the 2026-27 FAFSA (2026-27 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.