<p>FAFSA (the federal application) is used by all schools (public and private) and it does not ask about grandparent assets. --If you are the account owner, it’s your asset even if your grandchild is the beneficiary.</p>
<p>Some private colleges also require an application called the CSS Profile, and it does ask about any accounts held by others listing the student as a beneficiary. How that resource is assessed can vary by each individual school.</p>
<p>At FAFSA only schools though there is also some unclarity. The first year it’s a non-issue since it isn’t reported. In subsequent years, though, there is some dispute about whether any funds contributed from such an account get counted as untaxed income to the student.</p>
<p>A student I’m working with at the high school asked me this same question because she has a small amount of money a grandparent saved for her. Here’s an article I found, but I’m not sure how to interpret it. (I’m not too tax/money savvy --never had to be-- if it makes sense to you, I’d love to hear it explained.)</p>
<p>[FinAid</a> | Saving for College | Section 529 College Savings Plan Loophole](<a href=“http://www.finaid.org/savings/loophole.phtml]FinAid”>http://www.finaid.org/savings/loophole.phtml)</p>