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How College Savings May Affect Financial Aid

Having a college savings account doesn’t necessarily mean your student is ineligible for financial aid.

The impact of savings on the ability to receive financial aid depends on a variety of factors, including which savings vehicle you are using and who “owns” the account.

If you are using vehicles such as 529 College Savings Plans or Education Savings Accounts, and are listed as the account owner, that money is considered a parental asset and will carry less weight when determining your student’s “Expected Family Contribution” or EFC. If you are using an UGMA/UTMA, however, assets are considered to be the student’s and therefore may have a more significant impact on the amount of financial aid your student receives.

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For financial aid programs offered by educational institutions and other non-federal sources, the effect of being the owner or beneficiary of a college savings account varies from institution to institution.

Rules do vary, so we recommend contacting your tax advisor. You should also check with the schools your student is considering regarding their criteria for awarding financial aid. Visit Federal Student Aid for more information on financial aid eligibility.


What’s next

Learn more about applying for financial aid with FAFSA

Learn how college savings plans can help you put a tax-advantaged savings plan in place


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