Congratulations on saving in a 529 plan for your soon-to-be college student. Before you get to put that money toward its intended use, you probably have some questions about how you'll need to report it on your financial aid applications. Below we answer some of the most common questions about 529s and financial aid that we have received.
How and where do you declare 529 funds on the FAFSA®?
Contrary to what many people might think, there is no line on the FAFSA that specifically mentions a 529 account. Rather, if the parent is listed as the owner of the 529 account (which is most often the case), then the amount in the account is expected to be included in with the rest of the parent's assets, and should listed under the answer to the question: "As of today, what is the net worth of your parents' investments, including real estate?" That's good news, as parent assets are not counted too significantly in the financial aid formula. Only list the 529 account for the student applicant, and not the siblings.
If I have 529 accounts for all of my children, do I only have to list the account for the student submitting the FAFSA?
Yes, only list the value of the 529 account on the FAFSA for the student applicant. If you have more than one 529 account for that student, combine the values in your answer.
What if someone other than the parent(s) owns the 529 plan?
If someone other than the parent, such as a grandparent, an aunt, family friend, or noncustodial parent, owns a 529 plan for your student, then the account is NOT listed as an asset on the FAFSA.
How does the CSS ProfileTM differ from FAFSA in reporting 529s?
In addition to the FAFSA, you may need to file a CSS Profile, a financial aid application used by roughly 200 colleges and universities. This will depend on if one or more of the student's prospective colleges require a CSS Profile. On the CSS Profile, you should list the value of all parent-owned 529 accounts, including those for the student applicant and any other children. When it comes to non-parent-owned 529s, these are not overlooked on the CSS Profile. All of the 529 accounts on which the student is the beneficiary must be listed on the Profile in the section, "Relatives other than their parents and any other sources providing funds to help pay for college expenses."
We have a full overview on how to apply for financial aid on our website here. Learn the details of the financial aid applications, their deadlines, tips for completing them, and what happens after you apply. And if you run into more questions, please contact us. You can reach us at (800) 449-MEFA (6332) and firstname.lastname@example.org.