@mommdc , I did and that’s exactly what’s making me crazy. It says,
“Funds held in Section 529 college savings or prepaid tuition plans are parent assets and should be reported as parent owned investments in PA-120.
To recap:
If an asset is held by your parents in the name of a sibling, it is reported in PA-105
If an asset is held by your parents in your parents’ names, even if it’s for your sibling (e.g. a 529 plan), it is reported in PA-120.”
Do you see how it says if it’s a 529 (AND IT IS) it should go in PA-120, but if it’s an asset held by parents in the name of sibling (AND IT IS) it is reported in PA-105.
SO WHICH IS IT? Sorry to use caps. Not shouting, just trying to emphasize. It’s unclear to me.
The first thing you need to do is definitively determine if any or all of the 529 accounts for your children are custodial 529 accounts, because that makes a huge difference in how and whether or not they get reported on one student’s FAFSA and Profile.
A custodial 529 account is an account that is actually owned by the student beneficiary, where an adult (usually a parent) acts as the account custodian to manage the account for the benefit of the beneficiary/owner until the owner reaches the age of majority (usually 18 or 21, depending on state laws). In your first post you said that “When he turned 18, the bank let us know it was now his, not ours.” You also said in a later post “Just logged into the account (Learning Quesrt) and it lists both kids’ accounts with my husband’s name at the top with the words: Account Owner. But when it lists the accounts, it shows $0 for my son’s account. They told us it showed as $0 because he was 18.” Most 529 accounts are not custodial accounts, but based on what you have posted, it sounds like this account for your son is a custodial account. But you need to find out for sure before any advice can be given about how to report the accounts on Profile. I asked you in my last post, if the account value shows $0 for your son’s account when you look at the balance online, where did the money go? You need to find the answer to that question.
A 529 account owned by a parent (non-custodial) for a sibling is reported on Profile in PA-120. A custodial 529 account owned by a sibling is not reported on Profile at all. PA-105 is for assets that actually belong to a parent, but have been retitled in the name of a sibling as a tax avoidance strategy. This likely does not apply to your situation.
Find out for sure what kind of 529 accounts your kids have (custodial or non-custodial) and then report back here, and we can provide the proper advice.
I don’t think that ownership has been determined yet.
Again- PA-105 is talking about parent assets that have been retitled as sibling assets, most likely for tax avoidance reasons. Custodial sibling assets that really are assets of a sibling, even if a parent is named as a custodian, are not reported on Profile.
This is from the Profile instructions:
*PA-105A - Include funds in custodial accounts, Uniform Gifts to Minors accounts, or other savings and investment accounts held by your parents in the names of your brothers and sisters, who are under age 19 and not enrolled in college.
Funds held in Section 529 college savings or prepaid tuition plans are parent assets and should be reported as parent owned investments in PA-120.
You should only include assets your parents own in your siblings’ names, not assets owned by your siblings.
To recap:
If an asset is held by your parents in the name of a sibling, it is reported in PA-105
If an asset is held by your parents in your parents’ names, even if it’s for your sibling (e.g. a 529 plan), it is reported in PA-120.
If an asset is owned by your sibling, it is not reported on your PROFILE application.*
OK, we’ve determined our 529s are indeed custodial accounts. The accounts belong to the children; once they’re 18 we don’t have direct access to them.
So not only were we wrong to put son’s amount into our CSS line PA-120WF as well as in his line SA-110A (doubling up was just a dumb mistake), we were wrong to list sibling’s custodial account at all.
Yes, that’s right. On FAFSA your son’s custodial 529 account is reported as a parent asset; sibling custodial 529 accounts are not reported. On Profile your son’s custodial 529 account is only reported in SA-110A, as a student asset; sibling custodial 529 accounts are not reported. Since some Profile schools will treat custodial (student-owned) 529 accounts as a parent asset when computing financial aid, you should use Profile section ES (Explanations/Special Circumstances) to tell the school how much of the amount reported in SA-110A is from a student-owned 529 account.
@BelknapPoint, it took me awhile, but I finally understand and I thank you very, very much.
I’m way late, as we already have offers on the table, but at least I could rectify the FAFSA and I can attempt to explain myself in my financial aid appeals.
Your son got a merit award. At most schools, this reduces your actual financial need. You usually can’t double dip, although at some schools you can stack merit with need based aid.
does this school meet full need?
As noted above…a Profile school could very well treat this as a student asset unlike the FAFSA whicu treats most 529 accounts as parent assets.
We’re not sure what we will gain, either, but it’s worth a try. We did it incorrectly, plain and simple. We are correcting it. I don’t know what we will gain, but I certainly can’t see that we stand to lose anything by correcting our mistake.
Most schools don’t give financial aid in addition to merit aid? Is that really true? From the acceptance threads I’ve been reading, that doesn’t seem to be true, but perhaps all that aid is federal money and I am misunderstanding. Believe me, I have a lot to learn.
You are not looking at most schools and what they do now, you have specific schools so you can figure out what those schools do as far as merit and financial aid, or financial aid only, or merit aid only.
If you list the schools or go to the school specific pages here, you might get some real life examples of the kid of need based aid students have received.
If you list the schools or go to the school specific pages here, you might get some real life examples of the kid of need based aid students have received.
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Right, doing that. That’s what I meant by “From the acceptance threads I’ve been reading…” on the school specific pages where my son was applied/accepted. At least one mentions merit + fin aid, but as I said, perhaps that is federal Pell-type grants that wouldn’t apply to us. I probably have my hopes up for more aid for naught, but as I said, can’t hurt to ask. Worth a try? Thanks.
You said it makes a difference of about $15k in the EFC. It will depend on the school, of course, but I think it may make more of a difference if the EFC fell from $20k to $5k than if it fell from $50k to $35k. An EFC of $40k reduced to $20k made no difference at DD’s school, except maybe in subsidized v unsubsidized loans. Basically, no one with an EFC over $10k gets any need based aid.
At my daughter’s school, a large public there isn’t a lot of need money other than federal (Pell, SEOG). It gives out merit money, some alumni scholarships that are awarded by the FA office as it wants but no specific requirements for financial need, but not a lot of need based institution money. Her EFC first year was about $15k, not a cent of need based money and she wouldn’t have received any until her EFC was at Pell eligible levels.
So based on a sample size of ONE (your daughter’s experience at a large public college), you are claiming that no one with an EFC over $10k gets any need based aid? Really??
Geez, read both sentences together, but for you I’ll restate “Basically, no one with an EFC over $10k gets any need based aid AT HER SCHOOL”. In fact, I’m not sure anyone receives need based institutional aid at her school as her EFC this year is $0 and she received nothing other than federal aid. If she doesn’t get it, who does? I don’t think it is unusual for a school to give no institutional need based aid at all or no aid for EFCs over the federal maximums. Some states give it out through tuition reductions, or state grants, or waivers but the public schools don’t have extra aid to give. Do I think there are other schools that give little or no institutional need based aid? I do. Read a few of the recent post by students finding out they’ve only received loans and no other aid even though they are poor poor poor, and have need need need. Why aren’t their schools showering them with aid?
OP is looking for need based aid at a school that gives merit aid. Might it give need based aid too? Sure. Might it restrict that need based aid to those who have very low EFC? Sure. Might it give need based aid to students with higher EFCs? Sure. It’s the school’s money. quoting my post #32
You see, that’s how you should have written it originally, because that way it properly communicates your point, and as far as I know, it’s not inaccurate. Sucks for you that your daughter goes to a school with crappy need-based aid, but there are a huge number of colleges that provide need-based aid for families with EFCs north of $10k.
And the only question is if OP’s son is looking at one of those schools that gives need based aid for families with EFCs over $10k, or $15k or $100k. I think he is not because of the generous merit aid, but she’ll have to check.
My daughter goes to a school that doesn’t give need based institutional aid, but give very good merit aid. I don’t care what they call it, as long as she gets it.
If we are talking about Florida instate public here…they offer Bright Futures…and many students with incomes above $10,000 qualify for that. Florida schools provide a good amount of aid to instate students…no, not need based, but still…it’s not like they give nothing.