FAFSA 529 reporting confusion - parent-owned accounts for multiple children

You should report the TOTAL value of all 529 plans you own as YOUR asset on the FAFSA, regardless of which child is the beneficiary. Since you're the account holder, both accounts are considered your parental assets, not your children's assets. This is actually better for your son's aid eligibility - parental assets are assessed at a maximum rate of 5.64% while student assets are assessed at 20%.

Wait - I thought 529s weren't counted on FAFSA anymore? I read something about the FAFSA Simplification Act changing this... did I get that wrong??

I just went through this EXACT situation last month with my kids' 529s! So frustrating how unclear the instructions are. I ended up calling Federal Student Aid and waiting on hold for HOURS trying to get a straight answer. I was ready to give up when someone told me about Claimyr (claimyr.com). It got me connected to an actual FSA agent in about 10 minutes instead of the 2+ hour wait I was experiencing. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ. The agent confirmed what others are saying - report the TOTAL of all 529 plans you own as YOUR asset.

im just here wondering how u saved that much in 529s lol... my kids college fund is like $2k 😭

ACTUALLY, the rules for reporting 529s CHANGED with the new FAFSA! I can't believe nobody mentioned this! Under the FAFSA Simplification Act, parent-owned 529s are STILL reported as parent assets, but distributions from ANY 529 (including grandparent-owned) are NO LONGER reported as student income! So you need to report the total $57,000 as a parent asset, but when you actually use the money, it won't hurt your aid eligibility for the following year like it used to. The system is STILL broken, but at least this is slightly better than before.

Just wanted to chime in bc i went thru this whole mess last yr... Make sure u report ALL 529 accounts you own but DONT count any 529s owned by grandparents or other relatives. My parents have 529s for my kids and those don't go on the FAFSA at all. Also don't forget that retirement accounts dont count on FAFSA either so thats good!

One more important detail: when you're completing the FAFSA for 2025-2026, you'll report the value of these 529 plans as of the date you submit the application. So if you're planning to submit in October 2024, you'll report the value as of that date - not the current value. If the market fluctuates significantly between now and when you submit, the reported amount could be different.

My sister swears u should spend down the 529 before applying for FAFSA??? Like pay for dual enrollment classes or something in high school?? anyone know if thats true

Thanks everyone for the helpful responses! To summarize what I learned: 1) Report the TOTAL value of ALL 529 accounts I own ($57,000) as MY asset on the FAFSA, 2) This counts as a parental asset assessed at max 5.64% vs 20% for student assets, 3) Report the value as of the date I submit the application, 4) Distributions won't count as income on future FAFSAs. This makes complete sense now.

Just wanted to add one more tip since you mentioned being worried about verification - make sure you keep good records of those 529 account values! I got selected for verification last year and had to provide documentation for everything. Having screenshots of the account balances on the day I submitted the FAFSA saved me so much time. The colleges wanted proof of the exact amounts I reported. Also, if you have multiple 529 accounts with different providers, sometimes it helps to create a simple spreadsheet listing each account, provider, beneficiary, and balance so you don't accidentally miss one or double-count anything. Good luck!

One thing I haven't seen mentioned yet is that you should double-check whether your state offers any tax benefits for 529 contributions that might affect your reporting strategy. Some states give tax deductions for contributions to their state's 529 plan, and if you're planning any last-minute contributions before filing the FAFSA, the timing could matter. Also, if either of your 529 accounts are UGMA/UTMA 529s (where the child is actually the owner once they reach majority), those would be reported differently as student assets. But from your description, it sounds like you're the clear owner of both accounts, so you're good with the $57,000 total as a parental asset!

As someone new to this whole process, I'm finding this thread incredibly helpful! I'm in a similar situation with multiple 529s but hadn't even thought about the verification documentation aspect. Quick question - when you say to report the value "as of the date you submit the application," does that mean I need to check all my accounts on that exact day? My 529 provider only updates balances once per week, so should I use the most recent available balance or wait until I can get the exact same-day value? Also, if anyone has experience with how colleges handle small discrepancies (like if the market moves between when you check and when you actually hit submit), I'd love to know if that's something to worry about or if they're reasonable about minor differences.

This thread has been so informative! I'm dealing with a similar situation but with a twist - I have two kids applying for college in the same year (twins) and separate 529 accounts for each. Based on what I'm reading here, I'll report the combined total of both accounts as my parental asset on BOTH of their FAFSAs, correct? It seems counterintuitive to report the same money twice, but I want to make sure I'm understanding this right. Also, has anyone dealt with having multiple kids in college simultaneously and how that affects the Expected Family Contribution calculations? I've heard it can actually help with aid eligibility when you have multiple kids enrolled at once.