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.

As someone who just went through this process with my son, I can confirm what everyone is saying about parent-owned 529s not being reported on the new FAFSA. However, I wanted to add one thing that caught me off guard - make sure you understand the difference between parent-owned and student-owned 529 accounts. We had set up a UTMA 529 years ago thinking it would be better for tax purposes, but it turns out student-owned 529s are still assessed at 20% on FAFSA. We ended up having to transfer ownership back to ourselves before filing. Also, if grandparents have 529 accounts for your daughter, those distributions can potentially show up as untaxed income to the student, so coordinate with them on timing. The new FAFSA is definitely more family-friendly for savers, but there are still some nuances to watch out for!

This thread has been incredibly helpful! I'm also navigating the new FAFSA with a 529 account and was completely confused about where to report it. Reading everyone's experiences has put my mind at ease. One question I haven't seen addressed - does anyone know if the 529 reporting change affects state financial aid programs too? I'm in California and wondering if Cal Grant calculations still consider parent-owned 529 accounts, or if they follow the federal methodology now. Our 529 has about $25,000, so it could make a difference depending on how the state programs handle it. Has anyone dealt with state aid and 529 accounts under the new rules?

This has been such an informative thread! As a parent who's been putting money into a 529 for years, I was also completely confused about where to report it on the new FAFSA. It's such a relief to learn that parent-owned 529 accounts are no longer considered reportable assets - honestly, it felt like the old system was penalizing families for being responsible savers. I'm glad to see the federal government recognized this and made the change. Reading about everyone's experiences with both FAFSA and CSS Profile has been really helpful for planning. We have both public and private schools on our list, so knowing that some private schools still consider 529s through CSS Profile helps me set realistic expectations. Thanks to everyone who shared their experiences and especially to the financial aid counselor who confirmed the information - it's so valuable to have expert validation when navigating these changes!

This entire discussion has been incredibly enlightening! I'm a parent of twins who will be applying to college next year, and we have about $45,000 total in 529 accounts for both kids. I was dreading having to figure out how to report these on the FAFSA, especially since we've been diligently saving for over a decade. It's such a huge relief to learn that parent-owned 529s are no longer reportable assets on the federal form - this change really does reward families who planned ahead instead of penalizing us. I do have one specific question that I haven't seen addressed: since we have twins applying simultaneously, do we need to do anything special with the 529 accounts when both kids are in college at the same time? I know the new FAFSA handles siblings differently now, but I'm wondering if there are any considerations for how we use the 529 funds strategically when both are enrolled. Has anyone dealt with this situation under the new rules?

As a newcomer to this community and someone just starting to navigate the FAFSA process, I want to thank everyone for this incredibly detailed and helpful discussion! I'm a parent of a high school junior and we have about $28,000 in a parent-owned 529 account that I've been worried about reporting. Reading through all these experiences has been such a relief - I had no idea that the FAFSA Simplification Act removed parent-owned 529s from reportable assets. This is exactly the kind of real-world guidance that's so hard to find elsewhere. The distinction between parent-owned vs student-owned accounts, the CSS Profile differences, and even the strategic timing advice for distributions - all of this is invaluable information that I wouldn't have known to ask about. It's also reassuring to see validation from actual financial aid professionals in the thread. I'm bookmarking this discussion to reference when we start our FAFSA next year. For other newcomers who might be reading this, it seems like the key takeaways are: 1) Parent-owned 529s are NOT reported on the new FAFSA, 2) CSS Profile schools may still consider them, and 3) timing of distributions can matter for multi-year aid planning. Thanks again to everyone who shared their experiences!

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

Thank you Alex for sharing that official Department of Education clarification! This is really helpful to have the actual policy language alongside all the real-world experiences shared here. Your quote confirms what everyone has been saying - parent-owned 529 plans for the student filing FAFSA are indeed reportable assets, but the key change is that 529s owned by parents for OTHER children are no longer counted. I think there might have been some confusion in the earlier discussion about whether parent-owned 529s are reported at all. Based on your ED source, it sounds like if I own a 529 specifically for my daughter who's filing FAFSA, I would still need to report it as a parental asset in the investments section. Could you clarify - does this mean the "529s aren't reported" advice earlier in the thread was incorrect for the primary beneficiary's FAFSA?

I think there's some confusion in this thread that needs to be cleared up based on Alex's official Department of Education clarification. From what I understand after reading the ED guidance, parent-owned 529 plans ARE still reportable as assets on FAFSA - but only if they're designated for the specific student filing the application. The major change with FAFSA Simplification was that parents no longer have to report 529 accounts they own for OTHER children (siblings). So to clarify for everyone: if you own a 529 plan where your daughter is the beneficiary and she's the one filing FAFSA, you would still report that 529 as a parental asset in the investments section. The "529s aren't reported anymore" guidance earlier in this thread seems to have been referring to the sibling 529 rule change, not 529s for the primary student. This is a really important distinction because many families could inadvertently omit required information if they think ALL parent-owned 529s are no longer reportable. Can anyone who has recently completed the new FAFSA confirm how they handled reporting a parent-owned 529 for their primary student?

Thank you Alex for sharing that official Department of Education guidance! This really helps clarify what seems to have been some confusion earlier in this thread. Based on the ED clarification you provided, it appears that parent-owned 529 plans ARE still reportable as parental assets on FAFSA when they're designated for the student filing the application. The key change with FAFSA Simplification was eliminating the requirement to report 529s owned by parents for OTHER children (siblings), not eliminating 529 reporting entirely. This is a crucial distinction because several earlier responses suggested that parent-owned 529s don't need to be reported at all on the new FAFSA, which could lead families to inadvertently omit required asset information. From the ED guidance, it sounds like if I own a 529 where my daughter is the beneficiary and she's filing FAFSA, I should still report that as a parental investment asset. I'm wondering if some of the confusion stems from the fact that this change significantly reduced 529 reporting burden for families with multiple children, but didn't eliminate it entirely for the primary student's 529. Has anyone who recently completed the new FAFSA been able to confirm exactly where parent-owned 529s for the primary beneficiary should be reported in the investments section?

Thank you to everyone for this incredibly thorough discussion, and especially to Alex for providing that official Department of Education clarification! As someone new to this community and navigating FAFSA for the first time, this thread perfectly illustrates how confusing these policy changes can be - even well-meaning people can misinterpret the rules. Based on Alex's ED guidance, it's now clear that parent-owned 529 plans for the primary student ARE still reportable as parental assets in the investments section. The major FAFSA Simplification change was eliminating the requirement to report 529s owned for OTHER children (siblings), not eliminating 529 reporting entirely. This distinction is crucial because families could inadvertently omit required information if they think all parent-owned 529s are no longer reportable. For newcomers like me reading this thread: make sure to report your parent-owned 529 if your child is the beneficiary and filing FAFSA. The simplification was about sibling accounts, not your primary student's account. I really appreciate how this community worked through the confusion together - it shows the value of having both real-world experiences AND official policy guidance when navigating these complex financial aid rules!