<p>Your best move is to move the money to a 529. It’s not too late to do that now, prior to filing the FAFSA. Once the 529 is created, then show the $12k as a parent’s asset not the child’s asset. This seems wrong but Congress passed a law recently that allows 529’s – regardless of who owns the 529 – to be shown as parent’s asset.</p>
<p>Moving my kid’s money to a 529 and reporting as parent’s asset made a HUGE difference in financial aid (for the better!), but YMMV.</p>