- ORIGINAL NEWS
New FAFSA ‘loophole’ lets grandparents help pay for college without affecting financial aid eligibility
- SUMMARY
The changes to the FAFSA form for the 2024-25 academic year benefit grandparents who want to contribute to their grandchildren’s college education, creating a “loophole” of sorts.
There are no longer questions on the FAFSA about grandparent contributions, which means that any money given by grandparents to their grandchildren for college won’t affect the grandchild’s financial aid eligibility.
This primarily benefits middle-income families who have the capacity to save and invest.
However, it’s important to note that colleges may still consider grandparent contributions through their CSS profile when determining nonfederal institutional aid.
Moreover, opening a 529 college savings plan under a grandparent’s name can have implications for Medicaid eligibility and requires careful consideration and communication within the family.
Overall, this change encourages grandparents to save more for their grandchildren’s college education and provides more flexibility in college savings planning.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“For a growing number of families, financial aid is crucial when it comes to paying for college.”
“Middle-income families who have the capacity to save will benefit the most, according to Michael Green, a financial advisor at Apollon Wealth Management.”
Negative
“Without those questions about other sources of income, middle-income families who have the capacity to save will benefit the most, according to Michael Green, a financial advisor at Apollon Wealth Management in Charleston, South Carolina.”
“Colleges may still take some contributions from grandparents into account on the CSS profile to award nonfederal institutional aid, he added.”