Do 529 college savings accounts need to be reported on FAFSA application?

Good news - under the new FAFSA, parent-owned 529 accounts are no longer reported as assets! This is one of the big changes with the 2024 FAFSA simplification. You don't need to manually report the 529 account anywhere on the form. The new Student Aid Index (SAI) calculation doesn't include parent-owned 529 plans in the formula anymore, which is a huge benefit for families who've been saving for college. Just make sure the 529 is parent-owned and not in your daughter's name - student-owned 529s are still assessed at 20% in the SAI calculation.

dont believe that person theyre wrong the 529 still counts agianst you but you put it in the parent assets section. look for the place where you list investments and real estate thats where it goes

I JUST went through this same confusion last week!! The new FAFSA definitely doesn't ask for 529 accounts anymore - which honestly made me super suspicious that I missed something. I even called the Federal Student Aid helpline to confirm (took literally 3 hours to get through). The agent confirmed parent-owned 529s are NOT reportable assets on the new simplified FAFSA. BUT - and this is important - some schools still require the CSS Profile for institutional aid, and THAT form still asks about 529 plans. So check if any of your daughter's schools require CSS Profile too.

This is correct information. The FAFSA Simplification Act removed parent-owned 529 plans from the federal financial aid formula. You don't need to report it anywhere on the FAFSA. However, as mentioned, the CSS Profile (used by ~200 mostly private institutions) still considers 529 plans in their institutional methodology. The CSS Profile typically assesses parent-owned 529 plans at around 5% of their value, so having $37,000 might reduce aid by approximately $1,850 at schools using CSS. That said, many CSS schools will actually view responsible saving positively when determining institutional grants.

my cousins kid had a 529 and when they took money out it messed up their aid the next year because it counted as income somehwere so be careful how you use it

I spent 2 DAYS trying to get through to someone at Federal Student Aid about this exact question! The phone system is absolutely broken - kept disconnecting me after 45+ minutes on hold. I finally used this service called Claimyr (claimyr.com) that somehow got me past the long hold times and connected to an agent in about 15 minutes. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ The agent confirmed what others are saying - parent-owned 529 plans are NOT reported on the new FAFSA anywhere. This was a deliberate change to encourage college savings. But definitely check if your schools need CSS Profile too, as that's a different story.

my daughter got more finnancial aid this year because of the 529 change! we have about $42k in her 529 and it used to hurt our aid but now the schools dont see it on fafsa. some private schools still asked about it on there css forms tho.

Thank you all so much for the clarification! I just submitted the FAFSA without reporting the 529 account. It's such a relief to know this was intentional and not an oversight on my part. I'll make sure to accurately report it on the CSS Profile for the private schools on our list. One last question - does anyone know if distributions from the 529 during freshman year will affect sophomore year aid? I want to plan withdrawals strategically.

Just wanted to add another data point here - I'm a financial aid counselor and can confirm everything that's been shared is accurate. The FAFSA Simplification Act did remove parent-owned 529 plans from reportable assets starting with the 2024-25 FAFSA. This was actually one of the most significant changes for families who've been diligently saving for college. The old system penalized savers by assessing 529s at 5.64% of their value, but now federal aid calculations completely ignore parent-owned 529 accounts. However, I always recommend families check with each school's financial aid office about their institutional methodology, especially for CSS Profile schools, as they may still consider these assets when awarding their own grants and scholarships.

The ownership of a qualified education benefit (529 prepaid tuition plans or Coverdell Education Savings accounts) determines how the asset is reported on the FAFSA. The FAFSA Simplification Act made changes with regard to how ownership of a qualified education benefit is determined for FAFSA purposes or how the asset is reported on the FAFSA. The U.S. Department of Education (ED) provided clarification to the change in GEN-23-11 stating (bold added), "For dependent students, education savings accounts will only be counted as a parental asset if the account is designated for the student. Previously, if a parent had education savings accounts for their other children, the value of those was also required to be counted." An education savings plan (including a 529 plan) is considered to be an asset of the owner and should be reported as an asset (as part of the net worth of investments) on the FAFSA. However, if the plan is owned by the FAFSA parent of record for the benefit of another child (i.e., the beneficiary is not the child/student for whom the FAFSA is being completed), the plan is not reported as an asset of the parent of record. Likewise, such plans owned by individuals other than a parent (such as a grandparent) on behalf of the student are not reported anywhere on the FAFSA. If the student is the owner of the qualified education benefit, the value of the plan is reported as follows:  For a dependent student for whom the FAFSA is being completed and who is the owner of the education savings plan, the value is reported as an asset of the parent of record, even though the parent is not the owner. For an independent student who is the owner of the education savings plan, the plan is reported as an asset (as part of the net worth of investments) for the student on the FAFSA This is from the DEPT of Education