Q.How do we report 529 college savings on the FAFSA? Will our savings impact financial aid eligibility and should we still apply?

 

A.Unless the account is owned by someone other than the parent (such as a grandparent, aunt or uncle), 529 college saving plans are reported as a parent asset on the FAFSA.

This has minimal impact on financial aid eligibility since parent assets are factored into the formula at a much lower rate than student assets. The federal formula considers no more than 5.6 percent of parents’ assets and 20 percent of the student’s assets available to pay for college.

All families should consider applying for financial if they need financial assistance or plan to borrow to meet college expenses. By completing the FAFSA, students have access to federal student loans which typically have favorable rates and repayment terms compared to many private student loan options.

Bottom line, saving for college was a wise choice. It provides options to pay the college bill that might not otherwise be available, and has little impact on the financial aid award. For more information about federal aid eligibility, visit federal student aid 

If you have questions about completing the applications, don’t hesitate to reach out to the financial aid office at one of the colleges the student is applying to.