How will my 529 plan be treated for financial aid purposes?
Parents as account owner: Under federal financial aid rules, the value of a 529 plan is listed as a parent asset on the government's aid form, the FAFSA, if the parent is the account owner. A 529 plan that is owned by a student or funded with UTMA/UGMA assets is also reported as a parent asset on the FAFSA if the student is a dependent student. Under the federal aid formula, a parent's assets are assessed (counted) at a rate of 5.6% (this means that 5.6% of a parent's assets are deemed available to put toward college expenses each year). Later, any money withdrawn from the 529 account is not counted again as student income— a positive situation.