<p>Grandparent owned 529s have pros and cons. The pro - currently they are not reported as assets on FAFSA at all. The con - expenses paid for the student from a grandparent owned 529 account must be reported as untaxed income to the student on FAFSA. A student currently has income protection of around $6,000, any income over that 50% goes to the EFC.</p>
<p>And yes, FAFSA must be resubmitted every year with up to date income/asset information.</p>