Beginning in 2024-2025, 529 accounts will only be counted as a parental asset if the account is designated for the student. Previously, if a parent had education savings accounts for their other children, the value of those was also required to be counted.
Student Aid Index (SAI) will replace Expected Family Contribution (EFC) for 2024-25. It is an important factor in the needs-analysis calculation on the Free Application for Federal Student Aid (FAFSA), the form used by colleges, states, and other scholarship providers to determine financial aid packages.
Some schools require additional information to determine financial aid awards. Inclusion of accounts owned by someone other than the student or custodial parent depend on the school’s requirements. The best resource for detailed financial aid information is your school’s financial aid office or a college access or financial aid advisor in your area. For more information about federal student aid, visit studentaid.gov.
Like any non-retirement investment or savings, 529 accounts may affect eligibility for need-based financial aid – however, the impact is minimal. For accounts owned by parents and dependent students, the Free Application for Federal Student Aid (FAFSA) assesses 529 assets at about 5.64 percent of the value when calculating the Student Aid Index (SAI) for financial aid eligibility. Accounts owned by other parties will impact eligibility differently. For more information, consult studentaid.gov or an educational financial aid advisor.
Typically, having a 529 account doesn’t impact merit-based financial aid, like academic or athletic scholarships, and may be used to pay for qualified expenses not covered by a scholarship or retained for future years, for either undergraduate or graduate school.
If your student gets a scholarship, you have options. You can use the money in the 529 account to pay for qualified expenses not covered by a scholarship or retain the funds for future years. Some plans allow you to request a scholarship refund or transfer the account to another student.
Like any non-retirement investment or savings, 529 accounts may affect eligibility for need-based financial aid – however, the impact is minimal. For accounts owned by parents and dependent students, the Free Application for Federal Student Aid (FAFSA) assesses 529 assets at about 5.64 percent of the value when calculating the Student Aid Index (SAI) for financial aid eligibility. Accounts owned by other parties will impact eligibility differently. For more information, consult studentaid.gov or an educational financial aid advisor.