<p>Wish I was a kid posting this one! Embarassing at my age...</p>
<p>Got an e-mail today from one of the Profile schools D applied to. They identified a difference in student's investments reported on FAFSA and Profile. Long story short, it looks like we forgot (argh!) to list a 529 funded originally with an UTMA.</p>
<p>I remember spending hours on the phone on that question with FAFSA folks and with FA officers, figuring out that it is indeed a student asset. I think when I finally made the determination I forgot to go back in and correct the FAFSA.</p>
<p>Obviously I respond to the FA office at the school, and I'm guessing I need to also send a corrected FAFSA out to everyone, right?</p>
<p>We're also going to have to do an amended return because of documents we received AFTER I filed and did data retrieval, what a bummer. It's probably going to be a week or two before it's done, as it's in the hands of the accountant.</p>
<p>So do I correct the FAFSA twice? I'm worried because the UTMA/529 mistake was a couple of thousand dollars, I would think significant enough to maybe change some numbers for us. The amended stuff is trivial, just needs to be corrected.</p>
<p>This is a source of confusion to me, too, dodgersmom. I had read that 529’s were always parental asset.</p>
<p>We originally had our college savings in an UTMA account. I had been gradually dissolving that on college and music related expenses, but had a small lump sum left, and as age of majority in my state is 18, didn’t want the remainder available for anything but college. So I moved the funds into a 529. </p>
<p>So the money is in a 529, but with UTMA designation in the title along with D’s name, instead of my name and FBO D as it’s listed on the regular 529. </p>
<p>When I checked on this with the company that runs our state 529 plan they advised this was the proper way to handle the funds. As far as I know there’s no legit way to change the title on the account.</p>
<p>You handled the change of accounts correctly by moving from a UTMA to a UTMA/529. Minors can’t hold financial instruments such as UTMAs and 529s directly, and so a custodian must be named. UTMA funds are owned by the student (a minor) with an adult as custodian. You can’t change ownership of a UTMA, but you can transfer the funds to an account that’s titled the same. UTMA/529s are set up to maintain the same ownership as the original UTMA, and still have a designated custodian. </p>
<p>Your confusion is with how it’s reported. All 529s, whether owned by the student or the parent, are reported on FAFSA as parent assets. It doesn’t matter the source of the funds, and it doesn’t matter who the owner is as long as it’s a student or a parent; grandparent- and sibling-owned 529s are not reported on FAFSA. </p>
<p>If you didn’t make the transfer from the UTMA to the UTMA/529 until after you filed FAFSA, then that’s a different story. You list as assets on FAFSA a snapshot of your accounts as of the day you file.</p>
<p>For Profile, they used to ask for parent-owned 529s and student-owned 529s separately. Perhaps they still do, in which case you would list the UTMA/529 as a student asset.</p>
<p>vballmom, that was what I thought based on various expert books and articles on the subject. </p>
<p>I explained on the Profile that the UTMA funds were in a 529, so the financial aid offices would see what was where. Profile did specifically mention UTMA under the student investments. </p>
<p>I panicked last night when we got the e-mail, and jumped to the conclusion I had done something wrong - but now I’m wondering if the final answer was to leave it as a parent’s asset on FAFSA. My memory sucks and my notes aren’t much better, didn’t document this question too closely, it wasn’t the biggest issue at the time.</p>
<p>Does it make sense to let the FA officer tell me whether I need to correct the FAFSA? I’m not at all sure, especially after your post vballmom, that what I did was wrong. It sounds like I did the forms correctly. But if so, why is FA counselor asking to see documentation?</p>
<p>No. If it’s reported as a parent asset, leave it alone.</p>
<p>If I recall correctly, it wasn’t always this way. Once upon a time, student-owned 529’s, including UTMA 529’s, were listed as a student asset . . . but this has since changed (in 2009, I believe). It’s not beyond the realm of possibility that the FA officer has it wrong.</p>
<p>Student-owned 529s used to be in a loophole that didn’t require them to be reported at all, but that loophole was closed around 2007 or 2008.</p>
<p>No, it doesn’t make sense that you need to correct your FAFSA if you reported the UTMA/529 as a parent asset.</p>
<p>On Profile, student-owned 529s were reported separately from UTMAs when I filled it out several years ago, but the form might have changed since then. I’d make one more phone call to the financial aid office, ask to speak to an administrator, and just ask the question about custodial or student-owned 529s. Leave the phrase UTMA out of the question because the answer you got originally might have been from someone who confused the reporting of the UTMA with the reporting of a UTMA/529.</p>
<p>Let us know what you hear.</p>
<p>Oh and by the way, you can’t change asset data on the FAFSA, only income. So you couldn’t go back and add in the 529 amount anyway.</p>
<p>Thanks for your input, vballmom and dodgersmom.</p>
<p>The outcome: D had e-mailed financial aid counselor with an account statement and what we had done and why. D asked if we needed to change the FAFSA, specifically. Aid counselor said no, the documentation was sufficient and she had made the ‘adjustment’ to the file.</p>
<p>So what we did was fine and there was no reason to freak out about this. Note to self: get a good night’s sleep before responding to any more financial aid issues. </p>
<p>vballmom - didn’t know that you can’t change the assets on the FAFSA. I assumed any errors could be corrected. Good to know!</p>
<p>When you say “make darned sure…” isn’t any review of FA by an institution that uses CSS Profile at their discretion regardless of what documentation we provide? A school can use whatever method they want to decide how they want to treat an account. Do I have the ability to question them on their methodology? I guess since this school is just following up on the FAFSA and CSS entry by LizzieT after she gives them what they need, aren’t they the final word on how to treat the asset for calculating their formula for aid?</p>
<p>I’m not going to jump to any conclusions, she could’ve adjusted it either way.</p>
<p>I’m starting to understand how my D feels about this whole process, and at this point - it will be clear when we get the award which way they went. If I need to argue the point I’d rather do it after the award, and after we have other awards in hand. This particular school is pretty “with it” administratively and we expect the fin aid package very soon, so I do appreciate your sentiments, vballmom and dodgersmom, but am not feeling very aggressive about this right now.</p>
<p>On the other hand, it wouldn’t hurt to make the phone call…</p>
<p>To sahp2kids - sometimes mistakes are made, sometimes judgement calls can change. It’s always worthwhile to ask if you think an assessment has been made that doesn’t make sense.</p>
<p>Just that FAFSA does say custodial 529s should be reported as parent assets if the student is required to file parental info. However, CSS instructions are also clear that a custodial or student-owned 529 is reported as a student asset. Those instructions appear for line SA-110 & SA-115 as well as PA 120 & PA 125. </p>
<p>So there is going to be a difference on how the same account is reported on the two forms, I think. I’m using the Kalman Chany book “Paying for College without Going Broke” as well as the online form instructions for FAFSA and CSS.</p>