529 plan in a relative's name - how to use it?

[vballmom]

<p>529s in grandparents’ names do not need to be reported as income or assets on FAFSA:<br>

A 529 plan owned by grandparents should not affect the grandchild’s eligibility to receive federal financial aid. A grandparent’s assets are not reportable on the free application for federal student aid, or FAFSA, and the tax-free withdrawals from a grandparent-owned 529 plan are not counted as student income or student resources. Before requesting a payment from the 529 plan directly to the school, check to make sure the school’s financial aid officer understands these rules. If there is any confusion, you may be better off having the distribution made payable to your grandchild, who will then pay the college costs directly.

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<p>[Grandparents</a>, 529 plans are great match](<a href=“http://www.bankrate.com/brm/news/529/20071112_grandparents_529_plan_a1.asp?prodtype=pfin]Grandparents”>http://www.bankrate.com/brm/news/529/20071112_grandparents_529_plan_a1.asp?prodtype=pfin)</p>

<p>Distributions of parent-owned 529s are not treated as income by FAFSA:</p>

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Section 529 college savings plans are treated as an asset of the account owner, and so have a low impact on financial aid eligibility. College savings plans are reported on the Free Application for Federal Student Aid (FAFSA) as an asset of the account owner, which is typically the parent. Distributions from a college savings plan have no impact on financial aid eligibility (i.e., they are not counted as untaxed income or a resource).

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<p>[FinAid</a> | Saving for College | Section 529 Plans](<a href=“Your Guide for College Financial Aid - Finaid”>Section 529 Plans - Finaid)</p>