<p>I have a high school junior and am working on forecasting our EFC. The form asks for the net worth of the student's parents' assets including 529 plans.</p>
<p>My question is do we only include the 529 plan amount for that child? We have 4 other children with 529 plans. </p>
<p>Also, could someone explain to me how income tax paid effects the FAFSA? </p>
<p>Finally, I have been reading some other threads. Let's say our EFC is $10,000. Our child is applying to state schools in Ohio- cincinnati and Toledo and also to private Ohio Northern. Did I read correctly that the state schools won't be able to meet the gap between their cost and our need?</p>
<p>There’s a bit of disagreement as to the reporting of sibling 529s on FAFSA. I think it depends on how you interpret the definition of investments in the FAFSA instructions. In my interpretation, you are required to report all 529s owned by the parent for the benefit of any of the parent’s children. So this would be all “regular” 529s owned by the parents for the child and his or her siblings. If the children own 529s in their own names, such as a UGMA-529, then sibling 529s would not be reported on FAFSA, only that of the student.</p>
<p>The logic here is that by law, the beneficiary can be changed for any parent-owned 529, so they’re not legally an asset of the named beneficiary.</p>
<p>In any case, 529s are reported as parent assets and assessed by FAFSA at 5.6%, rather than student assets which are assessed at 20%.</p>
<p>In other posts on this forum there is some discussion on the reporting of sibling 529s. You can do a search to see what others have said. Also look here:</p>
<p>Income tax owed for the FAFSA base year reduces the EFC. Are you talking about the prior year’s income tax and its effect on EFC? Prior year taxes paid are not reported on FAFSA.</p>
<p>“Did I read correctly that the state schools won’t be able to meet the gap between their cost and our need?”</p>
<p>This practice is called “gapping” and is not uncommon among the broad range of colleges, not just state schools. You won’t know where you stand until you have your actual finaid offer in your (child’s) hands, and compare it to the other colleges’ offers. Offers may vary widely.</p>
<p>To make the news a little worse, colleges can offer you a loan, or work study, and call it “financial aid.” In their world, the offer of a loan or work study is counted as part of “meeting your need.” So, even if you don’t get gapped, you may feel gapped.</p>
<p>[Also, even though I know what you meant, you actually meant to say “the gap between their cost and our EFC.” That gap being your need. ]</p>
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