Fafsa & Ugma accounts

vballmom
Tue, 26 Feb 2008 17:08:11 +0000

If you convert UGMA accounts to student-owned 529 accounts, then they are not counted in this year’s FAFSA due to the loophole in the law which ignores student-owned 529s. This is a 529 account that is in the student’s name, NOT a more common 529 which is in the parent’s name with the student as a beneficiary. The student-owned 529 will be included next year (2009-2010) though because the loophole was closed. Conversion needs to be done in cash, so if liquidating the UGMA funds creates capital gains, then this might not be beneficial to you after all.