Does a 529 plan affect my child's financial aid eligibility?

529 plans do impact financial aid, though the degree depends on who owns the account:

Parent-Owned 529 (Most Common) - Counted as parent asset on FAFSA - Up to 5.64% of value can reduce aid eligibility annually - Example: $100,000 in 529 could reduce aid by up to $5,640/year - Withdrawals for qualified expenses don't count as student income

Student-Owned 529 - Counted as student asset on FAFSA - Up to 20% of value reduces aid eligibility - Example: $100,000 could reduce aid by up to $20,000/year - Much worse impact than parent-owned

Grandparent-Owned 529 (Trap!) - Not counted as an asset on FAFSA - BUT withdrawals count as student income - Up to 50% of withdrawal reduces next year's aid - This can be devastating - $20,000 withdrawal could cut $10,000 in aid

CSS Profile Schools Private schools using the CSS Profile may: - Ask about 529 plans owned by grandparents or others - Count them more heavily in calculations - Have different formulas than FAFSA

The Bigger Picture If you're counting on financial aid: - 529 savings might disqualify you from need-based aid - You're penalized for being responsible - The "expected family contribution" assumes you'll use those 529 funds

Child Life Portfolio Advantage Life insurance cash value is NOT reported on FAFSA and doesn't affect financial aid calculations. You build wealth without sacrificing aid eligibility.