Donna of Louisiana writes:

I am married and have one daughter. She will be a college freshman in the fall. I have contributed money in my state's 529 plan (I live in Louisiana) since she was 8. We were in the process of figuring out whether we were required to report the amount of money in the 529 on the FAFSA application. I found out yesterday that we do report it. One question i have is this. The state has invested the money and we have received "enhancements." There is more money in the account than I have put into it. (If I were to decide to withdraw it all and not use it for education, I would not get these enhancements.) Do I report the entire amount on the FAFSA form, enhancements and all, are
just the amount I contributed?

Another question is this. I am 52. My husband is 57. We read online that you can "shelter" a certain amount of savings on the FAFSA application, and the amount that can be sheltered rises with the age of the eldest parent. We haven't gotten through the whole form yet, but does the FAFSA automatically do this sheltering for you, or do you need to ask for it? Is there some part of the application where this info is entered?

The College Whisperer Responds:

No one said getting money for college would be easy, even in The Big Easy!

With respect to the 529 plan, yes, the full amount is reported on FAFSA as an investment.

Whether the 529 is treated as a student asset or, as more often the case, a parental asset, depends on how the account is held. This is important in calculating the Expected Family Contribution (EFC), which colleges use in determining financial aid awards.

SEE for a good overview of how the 529 is treated by FAFSA.

With respect to "sheltering" assets, as you put it, there are certain assets that are not reported as investments on the FAFSA, which would include 529s held in the name of third parties (i.e., grandparents). The instructions for FAFSA are rather clear on what should and should not be included as a reportable asset, and by whom (student or parent).

You should, of course, speak with your financial consultant as to specifics.

For more information on Louisiana's 529 program -- START -- go to

Best of luck in all of your college financing endeavors.
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Keep in mind those "Priority Deadlines" (federal, state and school) for the filing of FAFSA and related financial aid forms.

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