<p>
These are counted as parent assets then, and you are only “assessed” 5.6% after your asset protection allowance. If it was counted as a child asset, you would be assessed 20% with no asset protection.</p>
<p>Will this make a difference? As kelsmom pointed out, it will depend on your situation and the FA likely to be offered by the school.</p>
<p>
In general, yes, and for other reasons besides FA (mainly control of the asset).</p>
<p>One strategy is to spend down the kids’ non-529 money before you fill out the FAFSA. Did you send them to summer camp last summer? Reimburse yourself out of the kid’s account. Do they need a laptop? Are you going to get them a car? A musical instrument? Do they play sports? Buy/pay for all this stuff using the kid’s account before you fill out the FAFSA. Pretty much any expense that benefits the kid can be used.</p>