529 on FAFSA with a Parent Custodial account - Parent Asset ?

Paying for College
1

Hi,
Just need a clarification on the treatment of 529 plan on FAFSA:
I own the 529 Custodial version of 529 plan for the beneficiary - my D. Does this qualify as a Parent asset on FAFSA -Assuming yes.? Is this the better way than for it to be treated as a Student asset on FAFSA ?
https://www.fastweb.com/financial-aid/articles/confusion-about-reporting-custodial-529-college-savings-plan-accounts-on-the-fafsa
This is what it says: If the custodial parent owns a 529 plan account, it is
reported as a parent investment asset on the student’s FAFSA and
distributions from this 529 plan account are ignored. This is
regardless of whether the student or someone else is the
beneficiary.
TIA,

2

Clarification needed. Are you asking about a 529 account that you own as a custodial parent of the student completing the FAFSA, or are you asking about a 529 account that the student owns and you are acting as the account custodian until the student reaches the age of majority? Two very different things, but in the end for FAFSA reporting it makes little difference as in both cases the 529 would be reported as a parent asset. And yes, it generally is better for an asset to be reported on FAFSA as a parnet asset as opposed to a student asset. How to report on Profile or other financial aid forms will be school dependent.

A “custodial version” of a 529 account would be owned by the beneficiary. So in the situation you seem to be describing, your daughter is the account owner, not you.

3

Thx.I was clearly told that I the parent am the account owner with my daughter as the beneficiary. So, assuming it will be treated as a parent asset.

4

If your daughter is the beneficiary of a 529 custodial account, than she is the account owner, not you. You may be the account custodian, but you are not the account owner, no matter who clearly told you otherwise. If parent financial information is required to be reported on your daughter’s FAFSA, and she is the owner of a 529 custodial account, that account will be reported on FAFSA as a parent asset. It will be reported on FAFSA as her asset if parent information is not required to be reported on her FAFSA.