What is a 529 college savings plan?

A 529 College Savings Plan is a state-sponsored investment account that increase in amount each year. These college savings accounts can grow tax free, and withdrawals made from these accounts are tax free as long as the funds are used for education expenses.

Does a 529 plan affect your FAFSA?

A 529 college savings plan account that is owned by the student or the student's parent must be reported as an investment asset on the FAFSA. Distributions from such a 529 plan are not reported as income on the FAFSA.

Does a 529 plan impact your financial aid eligibility?

Every 529 college savings plan account has an account owner and a beneficiary. The owner has control over the account and can change the beneficiary. The beneficiary is the student who will receive the funds from the account to pay for college costs. However, ownership can be tricky and could impact your financial aid negatively.