@mommdc Yes, I’m feeling confident now that there will be an acceptance or two at schools that are $20,000 or less. If it goes to $25,000, student loans will cover it. Or I’ll get a second job. Either way, I’m just happy to have some understanding of the process. Thanks so much for your help.
Only if it is part of an UGMA/UTMA. So if I opened an UGMA savings account for my son, then two years later opened a 529 and funded it with money from the savings account, that’s a student asset. If he opens a 529 with money from summer jobs, and I make some deposits to it, not an UGMA.
@brantly Apparently, that is the case.
And according to what foxford reports, at least some schools are directing that such an account be reported on Profile as a parent asset, in contradiction to Profile instructions. That’s my point.
If your son is no longer a minor when he opens this hypothetical account, that might work, but I’m pretty sure that a minor can’t own a 529 account without it being designated as a UTMA/UGMA and having an adult custodian.
@BelknapPoint That makes sense as my son just turned 18 and the money was from a life insurance benefit. So we are unusual here…
@BelknapPoint Actually, they mentioned that if it was a UGMA/UTMA 529, it should be reported as a student asset. In my son’s case it should be reported as a parent asset. The student must also be a dependent.
Well that’s more in line with the Profile instructions. But it brings up the question of why two student-owned 529 accounts should be treated differently (one as a parent asset and the other as a student asset) based on the source of the funding.
If at a young age student A’s parent gives money to student A by opening a UTMA 529 account with student A as the owner/beneficiary and parent as the custodian, Profile directs that this 529 account be reported as a student asset.
If at a young age student B’s parent gives money to student B by opening a UTMA investment account in student B’s name, and upon reaching the age of majority and taking control of the account student B liquidates the account and puts the money in his savings account where it is no longer a UTMA asset and then a week later uses the money to open a 529 account for himself as owner/beneficiary, Profile would seem to (and some of the FA offices that foxford talked to definitely) direct that this 529 account be reported as a parent asset.
Why the difference?
@BelknapPoint, I have no idea. I’m just trying to figure out the best legal, ethical and sound financial plan for son’s money,
I hope anyone needing advice on a 529 issue doesn’t take my word for it. Please call financial aid offices, financial planners, even College Board and ask questions. I’ll still be hesitating on how to classify the student-owned 529 on the Profile because all I’ve ever read about it here is that it is listed as a student asset.
I know; the question wasn’t directed at you. I just threw it out there. You’ve been asking the right questions, and hopefully you’re in a better place now then when you made your first post in this thread and said that you were panicking a bit.
As for the angst over reporting a student-owned 529 on the profile: unlike FAFSA, there is an explanation section at the end of the form that allows up to 3,000 characters of text, so you can always make clear that the asset being reported, no matter what section you put it in, is a student-owned 529.