<p>I looked over the FAFSA info. It appears to be one of those open questions but is used as a loophome. If grandparents pay tuition directly to the school or through a 529, it does not appear that one has to report the transaction on FAFSA. Private colleges that use their own forms or PROFILE want to know about any 529s, but vary on how they treat direct tuition payments from outside parties, especially if made directly. It’s tricky in that the any monies given to a student or on his behalf is supposed to be reported for FAFSA, but there is a lot of gray area when we are talking about gifts and grandparents. From what I just read, it seems to be fine to have grandparents or relatives other than parents have a 529 and pay your college costs, it does not have to be reported. Please, please do your own research on this one if you are in that situation as I am no expert on this, just a mom interested in trying to figure these crazy rules out.</p>