529s and financial aid

In making decisions about eligibility for financial aid programs offered by the U.S. government and the amount of the aid required, the U.S. Department of Education (Dept. of Ed) takes into consideration a variety of factors including, but not limited to, the assets owned by the student (i.e., the designated beneficiary) and the assets owned by the student's parents. The Dept. of Ed generally expects the student to spend a substantially larger portion of his or her own assets on educational expenses than the parents.

  • For federal financial aid purposes, account assets will be considered those of: 1) the student's parent, if the student is a dependent student and the owner of the account is the parent or the student; or 2) the student, if the student is the account owner and not a dependent student.
  • For state, educational institutions, and non-federal financial aid, account assets may be treated similarly or differently that listed above for federal financial aid. Check with your state of residence to determine the requirements.

Account owners and beneficiaries should consult a financial aid professional and/or the state or educational institution offering a particular financial aid program, to determine how your 529 plan assets may affect eligibility for financial aid.