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529 plans for financial aid

parent34parent34 Registered User Posts: 13 New Member
Are 529 plans in siblings names included under parents investments on the CSS profile? They are for the FAFSA. If they are included, is there somewhere else to clarify if these are included so that colleges know. The NPC for many colleges has a line that asks about 529 plans in siblings names so they must take it into account. I called to ask about CSS but it is still unclear.

Replies to: 529 plans for financial aid

  • thumper1thumper1 Registered User Posts: 72,322 Senior Member
    Who is the OWNER of the 529....because if it’s the sibling...it’s not included on another siblings FAFSA.

    BUT if the siblings are beneficiaries of a 529 owned by their parents, then I believe all accounts need to be listed (on both the FAFSA and Profile).

    @BelknapPoint do I have that correct?

  • BelknapPointBelknapPoint Registered User Posts: 3,893 Senior Member
    OP needs to specify what is meant by "in siblings names." If a sibling is the beneficiary of a 529 that is owned by a parent whose information is being reported on a financial aid form, than yes, that 529 account is reported as a parent investment on Profile (and also on FAFSA). If the sibling is the actual owner of the 529 account, it is not reported on either Profile or FAFSA.
  • parent34parent34 Registered User Posts: 13 New Member
    Thank you for your help. yes, 529 plan is owned by the parent and the sibling is the beneficiary. If it is included in parents' investments, the following question on net price calculators for at least several colleges puzzles me: "What is the current value of assets your parents hold in your siblings names?" as I don't see anywhere on the FAFSA or CSS profile to provide this information.
  • BelknapPointBelknapPoint Registered User Posts: 3,893 Senior Member
    Thank you for your help. yes, 529 plan is owned by the parent and the sibling is the beneficiary. If it is included in parents' investments, the following question on net price calculators for at least several colleges puzzles me: "What is the current value of assets your parents hold in your siblings names?" as I don't see anywhere on the FAFSA or CSS profile to provide this information.

    The question you quote does not refer to a 529 account that a parent owns for the benefit of a sibling; it refers to assets that a parent constructively owns that have been retitled in the name of a child (sibling) as a tax strategy.
  • thumper1thumper1 Registered User Posts: 72,322 Senior Member
    I thought the amounts in parent owned 529 accounts were listed as a parent asset. Am I wrong about that?
  • parent34parent34 Registered User Posts: 13 New Member
    Thank you! The folks on the CSS help line didn't even seem to clearly know what a 529 plan was or a Roth IRA either, and I got different responses the 2 times I asked...
  • BelknapPointBelknapPoint Registered User Posts: 3,893 Senior Member
    I thought the amounts in parent owned 529 accounts were listed as a parent asset. Am I wrong about that?

    No, not wrong, as long as the owning parent is a required reporter on the financial aid form. Is there something in this thread that claims something different?
  • thumper1thumper1 Registered User Posts: 72,322 Senior Member
    @BelknapPoint

    Post 3 was mighty confusing to me....

    I was just making sure I was correct.
  • privateIDprivateID Registered User Posts: 259 Junior Member
    edited October 11
    I think this has been discussed in the past, but I thought a child owned 529 is reported differently on the FAFSA and Profile. On the Profile it is reported as a child asset (although you can explain to the school it's 529 money). This was part of the reason I did not convert some of my parent owned 529 money to a child owned 529 (I considered it to lower siblings EFC per Post 3 where sibling 529 would not be included).
  • BelknapPointBelknapPoint Registered User Posts: 3,893 Senior Member
    I think this has been discussed in the past, but I thought a child owned 529 is reported differently on the FAFSA and Profile. On the Profile it is reported as a child asset (although you can explain to the school it's 529 money). This was part of the reason I did not convert some of my parent owned 529 money to a child owned 529 (I considered it to lower siblings EFC).

    If a student who owns a 529 account is completing Profile, I would contact the financial aid office at each school where the Profile is being sent to ask how they want the student-owned 529 asset reported: as a student asset, or as a parent asset. The answer will be determined according to each school's policy as to how they treat a student-owned 529 account; some Profile schools do use the FAFSA rule. It also wouldn't hurt to note in the Profile special circumstances explanation section that $X reported in question whatever represents the balance in a student-owned 529 account.
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