dc328c1b_ership__In_Whose_Name_to_Save___Financial_Aid_Treatment
[Savings Vehicle] Section 529 Prepaid Tuition Plan [Comments] Since the Higher Education Reconciliation Act of 2005, prepaid tuition plans have been treated as an asset on the FAFSA, with an asset value equal to the refund value. Qualified distributions do not affect eligibility (i.e., qualified distributions do not count as income or a resource). Note that non-qualified distributions (i.e., distributions that are subject to federal income tax) do count as income to the distributee. Custodial prepaid tuition plans owned by a student, where the student is both the account owner and beneficiary, are reported as a parent asset if the child is a dependent student and a student asset if the student is an independent student. This treatment is effective with the 2009-10 award year due to a legislative change enacted in the College Cost Reduction and Access Act of 2007. 529 prepaid tuition plans owned by a third party, such as a grandparent, are not included as assets on the FAFSA, but distributions from such a plan are reported as untaxed income to the beneficiary on the FAFSA. [Financial Aid Treatment] 
asset of account owner (low impact if owned by student or parents; high impact if owned by a third party)
FinAid | Saving for College | Account Ownership: In Whose Name to Save?
Financial Aid Treatment