Hello - My parents have a 529 account under their name with my youngest child currently named as the beneficiary. I know for FAFSA, grandparent owned 529’s do not need to be included but what about the CSS. If I am filling out the CSS for my oldest child, do I need to include the account above? It’s not in our names as parents or the oldest child’s name so I would think the answer is no. Am I correct? Thanks.
From Kiplingers article:
However, at over 200 private institutions that use the CSS Profile for awarding their own financial aid, grandparent held 529 plans will still be considered.
Use the 529 Grandparent Loophole to Maximize College Savings | Kiplinger
The best bet is to contact the colleges your student is applying to. I haven’t completed a Profile in a long while. Where would this be included on the Profile in terms of the balance in these grandparent owned accounts?
Perhaps this means that grandparent 529 disbursements are still counted by Profile schools.
@BelknapPoint do you have any idea?
Here’s another article talking about grandparents paying the college directly vs. from a 529…I’ve read this b4.
It might be wise to consult a tax advisor or a school aid officer.
How Grandparents Can Help Pay College Tuition (road2college.com)
Grandparents PAYING is different than having to include the amount IN a 529. The OP is asking if they have to include the 529 account balance info on the Profile.
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Yes, I understand - I’m providing an alternative - because if the 529 is new and without huge growth, they can close it and pay directly.
In essence, they are looking to keep their aid up- so offering a different possibility might give them a thought of a different way.
In regards to their initial question, it sounds like it will depend on the school for CSS (but FAFSA will be in the clear).
The thing is, any adult besides the reporting student or that student’s parents could have opened a 529 with the student as the beneficiary and not told anyone until after the financial aid applications are submitted. How is that supposed to be reported, if the application asks for the information? And if the student/reporting parent knows about a 529 owned by a grandparent (or anyone else who is not the student/parent), they are relying on information provided by that other person to be accurate, if reporting the account balance is required. What if the account owner refuses to cooperate?
Like thumper1, I also have not seen a Profile form in quite a while. Does the current version explicitly ask for information on a 529 account owned by someone other than the student or a reporting parent, if the student is the named beneficiary? What if a sibling of the student is the named beneficiary?
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I’m hoping someone who has a student attending a Profile school now will respond to this query.
My understanding is a grandparent 529 would not be reported anywhere as an asset. However, any expected grandparent contributions for a given academic year, from a 529 or otherwise, would be reported as such, through the input, “How much does [student] expect to receive from the following sources to pay for educational expenses for the [202X-2Y] academic year? . . . . Relatives other than their parents and any other sources providing funds to help pay for college expenses.”
My understanding is also that some families therefore strategically plan to delay grandparent contributions to later academic years so they do not have to report them for earlier academic years. I don’t see a problem with that as long as it is actually true. But if in fact you expect your grandparents to make a contribution, again from a 529 or otherwise, in an academic year, then I think you are ethically required to report that.
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Is this a question on the Profile now?
It no longer applies to the FAFSA, IIRC. @kelsmom
It was as of last year, and the reporting I have seen indicates it stayed on the CSS profile despite the FAFSA change.
However, I have not actually seen this year’s CSS profile.
I think for the OP’s purposes, if that question is still on the CSS profile as has been reported, then they know what to do. If it has been eliminated, and not replaced with anything equivalent asking about relatives other than parents, that would be good news and likely mean they could ignore any possible grandparent contributions.
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This is a question on the 2024-25 Profile…and like you wrote, only applies to the given year the student is applying for aid. So, if the grandparents had a 529 plan for the student, one would enter that balance divided by four (assuming grandparents were going to disburse the money that way.)
Note many colleges have supplemental CSS Profile questions, so they may ask for more detailed grandparent 529 balance and/or contribution information (among other things.)
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So really…they could enter $0 if the grands are contributing only in subsequent years, right?
Yep. But then the numbers for the subsequent years will be larger (assuming full balance divided by fewer years, and accurate divulging of circumstances.)