As college costs continue escalating, many gladly welcome help from family. With savvy planning, grandparents can ensure their gifts are not impeding a grandchild's ability to access financial aid.
The traditional financial aid assessment tool used by the Department of Education to award grants and loans is called the Free Application for Federal Student Aid (FAFSA). The FAFSA determines a family's eligibility for financial aid by counting certain income and assets towards their ability to pay college costs.
Under the FAFSA, grandparent-owned 529s are not counted in the formula but any distributions are counted as income in the following year. …Read More