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[BelknapPoint]

@YoLo2

This creates a loophole where 529 plan assets of a sibling are not reported on the FAFSA if the 529 plan is a custodial 529 plan and not a parent-owned 529 plan. One strategy might be to allocate all college savings in the custodial 529 plan of a younger sibling to reduce the reportable assets for the older child.

This suggested “strategy” is unethical and arguably illegal. A deposit of money to a student-owned 529 account by someone other than the student/account owner would be considered an unconditional gift. Once it’s deposited, it can only be used for the benefit of the student/account owner while the account is under control of the custodian (before the student/account owner reaches the age of majority); after the student/account owner reaches the age of majority and assumes control of the account, the funds can be distributed (or not) however the student/account owner sees fit, subject to the normal 529 rules and tax implications.