UTMA 529 Quandry (like a lot of folks)

Paying for College
1

<p>Mesmerized by all of the details in this process. Here is my issue.</p>

<p>Oldest son goes to college next year; have a UTMA account with about 70K in it. Reviewing the details on the FASFA and calling the financial aid of the profile school he has #1; I understand moving the money into a 529 (still UTMA) will treat it as a parent asset on FAFSA. I'm fine with this.</p>

<p>However, as I completed the PROFILE data for 2012-13 on college board, the definition clearly states that 529 UTMA is treated as a student asset (item SA 110A). "If you have a 529 plan as part of the uniform gift to minor act account OR was finded from assets from a UTMA it is considered a student asset and should be reported here. My question is - has something changed for next year? </p>

<p>I also have 2 other children right behind this one; both with similar accounts. As I complete the profile, it clearly tells me that I need to include these in the parents assets section (PA 105A) "include funds in custodial accounts, UGTM accounts, held by your parents in the names of your brothers and sisters." Thus, I am supposed to show the assets here as parent assets.</p>

<p>If I run the EFC using the EFC Calculator; and include my oldest son's account as a parent asset (assuming I move to 529) and put the other 2 childrens accounts into the calculation under 'siblings assets' box - I am at about 32000 EFC which I can live with. Will I get a different EFC from the profile data - and why the differences? I'm afraid they changed the definition for 2012-13. I checked the studentaid.ed.gov site for the 2012-13 info on how to complete the worksheet - but it is not out yet (or missing).</p>

<p>HELP! I'm wondering how best to handle all of this; and oldest son turns 18 in Nov so perhaps I can liquidate and move to non-UTMA 529 if needed. what a mess. thanks</p>

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<p>You might want to ask your son’s Profile school how they treat sibling assets. Different Profile schools might treat them differently depending on their specific (unpublished) financial aid algorithm. Unless the school provides an EFC calculator on its website, there’s no general rule for how Profile schools will treat sibling assets. The EFC you get from a FAFSA calculator may or may not be the same as the definition of need that a Profile school arrives at for you. </p>

<p>In addition, the definition you gave for what’s reported as a parent asset doesn’t seem to include child-owned 529s; wouldn’t you thus exclude the sibling 529s (assuming you transfer them from their current UTMAs to child-owned 529s)?</p>

<p>You already know that FAFSA-only schools will not ask you to report assets in siblings’ names. It doesn’t seem fair to the student that sibling assets are lumped in with parent assets because those really aren’t available funds for anyone but the sibling to use. </p>

<p>Regardless, your plan to move your oldest child’s UTMA to a 529 is still valid.</p>

<p>Maybe someone with more recent experience filing the Profile form can answer your question about the rules changing.</p>