Hi so I’ve been trying to figure out if even though my parent has a lower income >50,000 if since I have a relatively large college fund it will hurt my financial aid amount significantly and I was wondering if any of you have dealt with this or know about it.
Thanks!
How much is there in college savings, how is it invested, and who owns the account(s)?
@BelknapPoint it’s around 50,000 in a 529 and it’s under my non-custodial parents name
Did you mean < 50,000? ( > is greater than, < less than)
You won’t report the 529 at all on this year’s FAFSA. The way the NCP parent 529 works is this: You will only report the 529 distribution for the year on the next year’s FAFSA … if you get a distribution of $10,000 for 2016-2017, you report it as money received by the student on the 2017-2018 FAFSA.
At a Profile school using NCP info, you’ll have to report the value of the 529. You might need to report it on the Profile even if the school doesn’t use the NCP, but I am not sure about that.
CSS Profile schools will also want that non-custodial parent’s income & asset info.
@romanigypsyeyes yes I meant less than 50,000 sorry that was a silly typo
@intparent yes I do know that and I am applying to a few CSS schools which is why I am wondering about this
My understanding is that a distribution from a 529 owned by a NCP will be reported as student untaxed income for the year received. So if the distribution was received in tax year 2016, it would be reported on the 2018-2019 FAFSA. If it was received in tax year 2017, it would be reported on the 2019-2020 FAFSA.
If a Profile school requires NCP info, the NCP would report a 529 account owned by the NCP. If a Profile school does not require NCP info, it is not a reportabale asset (but, like FAFSA, any distributions that benefit the student would need to be reported as untaxed income).
That’s fine. The reason I ask is that less than 50k can (with other criteria) can qualify for the simplified needs test which ignores assets.
Someone else can list the other criteria because I can’t remember anymore and for some reason, my google skills are massively failing me.
If the NCP owns the 529 account, it won’t be a FAFSA reportable asset, and the simplified needs test won’t be a consideration.
Oops I missed that this belonged to an NCP.
Hey OP, don’t be frazzled. You are in very good hands with kelsmom and belknappoint!
I’m wondering how this will be treated by Profile schools?
@thumper1 that’s what I’m wondering too
See the last paragraph of post #8.
@BelknapPoint thanks I saw that about how it needs to be reported now I’m just more curious about how they will take it into consideration in my EFC and what they will offer for financial aid
Oops, I missed that @BelknapPoint. Thank you for pointing it out again!
Since Profile schools can (and I think most due) use their own formulas to calculate institutional EFC based on Profile responses, it’s really hard to say how any one factor at any one school will translate into an increase or decrease in EFC.
Wouldn’t a Profile school expect the student to use about $12k per year of the $50k in the 529? The funds have been set aside specifically for college.
@frazzledsenior17 What are the incomes of your custodial parent and noncustodial parent? Are either of them remarried?