SHORTCUTS

529 Plan Details:

Enter your state:

World's Simplest College Calculator:

How old is your child?

Find a 529 Pro:

Enter your zip code:

Enroll In a 529 Plan:

View a list of participating plans

OPTIONS

529 PLANS

529 News

Coverdell ESAs now share advantageous financial aid treatment

(January 26, 2004) - The U.S. Department of Education has issued a letter to financial aid officers clarifying that a Coverdell ESA is to be treated is an asset of the parent, provided the parent is the "owner" of the ESA. This puts ESAs on a par with 529 plans in their impact on a student's eligibility for federal financial aid.

Department officials apparently have not picked up on the fact that ESAs do not have "owners." A financial institution acts as trustee or custodian, while the parent is usually the "responsible individual." The usual conclusion in this situation would be to treat the ESA as the beneficiary's (i.e. student's) asset. Regardless, the ruling is good news for many families using ESAs.

For more information, click here.

Return to 529 News center.