🎓 The FAFSA Rules Changed—Is Your College Savings Strategy Keeping Up?
As kids head back to school, it’s a good time to look beyond this year and plan for college costs.
One key update: distributions from a grandparent-owned 529 plan are no longer treated as student income on the FAFSA. That may make it easier for grandparents to help pay for college without the previous impact on financial aid eligibility.
Families should ask: Are we using the right accounts and taking advantage of today’s rules?
Three steps to take now
- Review 529 accounts. Confirm each account’s owner and beneficiary, and make sure the setup still fits your goals. Consult your financial and tax professionals before making changes.
- Plan withdrawals. Map out which accounts will cover qualified expenses—such as tuition, fees, books, room, and board—and coordinate withdrawals to avoid missed deadlines, excess distributions, or unnecessary tax complications.
- Prepare for FAFSA filings. Keep records of account balances, ownership, withdrawals, and education expenses. Review FAFSA guidance annually, since requirements can change, and consult financial aid, tax, or planning professionals as needed.
If college is part of your family’s plan, let’s make sure your savings strategy is working as hard as you are.