Reporting 529s on Your FAFSA and Other Financial Aid Forms

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.

If I have 529 accounts for all of my children, do I only have to list the account for the student submitting the FAFSA?

If you have more than one 529 account, you will be expected to list the total of all accounts on each FAFSA that you are filing. The reason for this is that the FAFSA asks for the total amount of parent assets, not which assets they have specifically saved for the child applying to college. Parents also have the ability to switch beneficiaries on 529 accounts. So just because money was set up in the name of one child doesn't mean it will ultimately be used for that child. If you are concerned about how the financial aid office will view your assets, and want to explain that 529 accounts for multiple children are included in your totals, you should contact them. A college can make changes to the financial aid calculations if they believe it is warranted.

What if someone other than the parent(s) owns the 529 plan?

You'll notice that I said "if the parent is listed as the owner" in the previous question. If someone other than the parent, such as a grandparent, an aunt, family friend, or non-custodial parent, owns a 529 plan for your student, then the account itself is NOT listed as an asset on the FAFSA. However, once that money is actually withdrawn to pay for college costs, the amount used counts as untaxed income for the student in the year it's utilized. Though changes to the FAFSA currently planned for the 2024-25 application would remove that requirement.

How does the CSS Profile^TM 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 your prospective colleges require a CSS Profile. The process for reporting 529s on the CSS Profile is very similar to that of the FAFSA. That is, parent-owned 529s are still reported as a parent asset. Parents should still report the total value of all of the 529s that they own on each CSS Profile that they file. There is one difference, and that is 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 collegeplanning@mefa.org.

Learn more about financial aid