New FAFSA timing rules may affect 529 plans
The new rules offers grandparents greater flexibility in tapping their 529 accounts for grandchildren. Instead of waiting until the year the grandchild begins their final year of college, they need only wait until the junior year of college which typically includes the second semester of sophomore year. By waiting until then the 529 plan will have no impact on federal aid under either asset-inclusion or income-inclusion.
The 2016/17 FAFSA rules will remain the same as current treatment.