Do 529 accounts go on parent's or student's FAFSA when parent is custodian?

This is a common confusion point! When a parent is the owner/custodian of a 529 plan (even if the student is the beneficiary), it is reported as a PARENT asset on the FAFSA. Parent-owned 529 plans are assessed at a maximum rate of 5.64% in the SAI formula, whereas student assets are assessed at 20%. So your daughter's 529 should be reported under your assets, not hers. This is actually better for her aid eligibility.

Im pretty sure my financial advisor told me the opposite last year??? He said the 529 goes on the students portion because they benefit from it. But maybe the rules changed for the new FAFSA?

omg the whole 529 thing is so confusing!! i totally reported my kids 529 wrong last year, probably why his financial aid was so terrible :( ugh

While everyone else is correct that parent-owned 529s are reported as parent assets, there's another wrinkle worth mentioning: if you have 529 plans for multiple children, you report the FULL VALUE of all plans, not just the one for the student who's applying. Many parents miss this detail and underreport their assets. The FAFSA guidance specifically states that all 529 plans owned by the parents must be reported, regardless of which child is the beneficiary.

For what it's worth, I asked the EXACT same question when filling out my son's FAFSA last month. Tried calling FSA about it and spent over an hour on hold before getting disconnected. TWICE. Such a broken system.

The 529 reporting rule has a very specific purpose: to prevent families from gaming the system by moving assets to the student's name. Before this rule was established, families would transfer assets to student-owned accounts to hide them from the FAFSA, since parent assets over a certain protection allowance are counted. The current system acknowledges that college savings should not severely penalize families, so parent-owned 529s are assessed at the lower parent rate (5.64% maximum) instead of the student rate (20%).

this whole system is DESIGNED to be confusing so ppl mess up and get less aid. convince me im wrong!!!

Thanks everyone for the helpful information! To summarize what I learned: 1) Report the 529 as a PARENT asset since I'm the custodian 2) Include ALL 529 plans I own for all children, not just my daughter's 3) Parent assets are assessed at max 5.64% vs 20% for student assets. I feel much better about completing this section correctly now!

Just wanted to add one more helpful tip for anyone reading this thread: when you're entering your 529 values on the FAFSA, use the account balance as of the day you're filing, not the balance from your last quarterly statement. 529 account values can fluctuate quite a bit with market changes, so if your statement is from a few months ago, it might not reflect the current value. Most 529 plan websites let you check your current balance online. This ensures you're reporting the most accurate information and won't run into issues if the school requests verification documents later.

One thing I'd add for anyone navigating this - keep detailed records of how you reported your 529 assets! I learned this the hard way when my son's school requested verification documents and I couldn't remember exactly which accounts I had included or excluded. Now I keep a simple spreadsheet with account names, balances as of filing date, and notes about which child's FAFSA they were reported on. Makes renewals so much easier and helps avoid inconsistencies between years that could trigger additional reviews.

This thread has been incredibly helpful! I'm a first-time FAFSA filer and was making the same mistake as some others here - I was about to report my daughter's 529 as her asset since she's the beneficiary. Reading through all these responses saved me from a costly error. The clarification about reporting ALL parent-owned 529s (not just the one for the applying student) was especially valuable since I have accounts for both my kids. I also appreciate the tips about using current balances and keeping detailed records. One question though - if I contribute more money to the 529 after filing the FAFSA but before my daughter starts school, do I need to update the application or does that only matter for next year's filing?

This is such a valuable thread! I'm in a similar situation with my son's FAFSA and was completely overthinking the 529 reporting. I had been reading conflicting information online and even called my 529 plan provider, but they said they couldn't give tax or financial aid advice. What really helped me understand this was the explanation about WHY parent-owned 529s are assessed at the lower rate - it makes sense that the system would encourage college savings rather than penalize families for planning ahead. For anyone else struggling with this, I found it helpful to think of it this way: whoever's name is on the 529 account statements as the "account owner" is whose asset it is for FAFSA purposes, regardless of who the beneficiary is. The beneficiary designation just determines who can use the money for qualified expenses without penalties.