Dept of Ed letter describes financial aid treatment of 529s

The U.S. Department of Education has issued a Dear Colleague letter describing changes made by the Higher Education Reconciliation Act of 2005 to the treatment of 529 plans and Coverdell ESAs ("qualified education benefits") in the federal aid methodology. The letter reiterates that in the needs analysis of a dependent student, 529 plans and Coverdell ESAs are not considered assets of the student. The letter goes on to state that "a qualified education benefit would only be reported as an asset of the parent if the parent (including a step-parent) is the owner of the account or plan." The change in financial aid treatment is effective for the 2006-07 school year.
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