Error on Fafsa - Custodial Account

<p>It has come to my attention today, that a custodial account in my daughters name may have been reported wrongly on the fafsa. I had reported it as a parental asset instead of my daughters asset. My question is how much will this affect the outcome of the fafsa. Our EFC was close to $16500, and my daughter was close to $7500 with loans and work study. We only qualified for around $7000 in grants (for UC's in California). How much is that going to change if I edit my fafsa? Is it too late to edit my fafsa? Should I scramble and convert it to a 529? What if I don't change it? Is it really that big of a deal? The money in this account is going to pay for our efc portion. Without if I don't think we can budget in $16500 a year. Thanks so much for any information.</p>

<p>Forgot to state that the custodial account has 46266.00 in it</p>

<p>It’s going to hurt. Unless it is a 529 or something that might not count, and I can’t think of anything right off hand, that is a direct 20% on the amount in the account. You do not want assets in a students name if you can help it unless it is a 529 which is then reported as parent asset.</p>

<p>I just did the online fafsa customer service live chat thing, and the lady told me that I was CORRECT to list the custodial account as my asset!?! Her exact words “Yes Ma’am, when a student is considered a dependent student for FAFSA purposes the account needs to be listed as a parental asset.” I printed out the conversation. I guess I am going to let my original fafsa ride!</p>

<p>I would put it into a 529 as soon as possible. She have been right but if she was not, that she erred does not mean “oh, well, all’s well” if you get selected for verification of this. It might save you penalty fees and any fraud issues, but not the treatment that it should have been. The chances are good it won’t come up at all, but each year the chances go up that something might flag. So if you get that money into a 529, you’d be limiting your liability if something sould come up. I don’t know what custodial accounts titled whatever way do not count, so I can’t say, but I would be wary.</p>

<p>Yes I want to transfer to a 529. I am going to wait and pull out enough to cover this coming up year and transfer the rest before next years fafsa is due. I did print out the online conversation between the agent and I… Geez how confusing can it get! Thanks for your information it is greatly appreciated :))</p>