If my grandparent is planning to gift me some 529 money, do I need to report it to student financial services when I apply for financial aid? I found in some schools, they are asking “amount from 529” without stating whether the source is from parent or grandparent.
I don’t know how much, but I know some amount will be gifted by my grandparents.
Any comments, feedback, suggestions will be much appreciated.
If it’s in a grandparent’s name and they take a distribution to pay for some of your school, that money has to be reported as student income next year. Some people wait until the end of junior year to use the $ in a 529 so that they’re already done filing FAFSAs.
If they transfer it to you or your parents, it will count as parent assets for the FA calculation, and reduce your aid by about 5.6% of the value of the account. I think this may not apply if your family has very little savings.
Someone please jump in if I’m misunderstanding – and @shivaya, sometimes different colleges have different methods, so it’s worth it to contact some schools you’re considering and ask them what makes sense.
Change of rules for 2017-2018 FAFSA! People could use 529 of their grandparents starting as early as the spring term of their second undergraduate year; without impacting to their financial aid. See FAFSA Changes Make Grandparent 529 Plans Even Better