Do You Report a Sibling’s 529 Plan on FAFSA?

No, you do not report a sibling’s 529 plan on the FAFSA. Since the FAFSA Simplification Act took effect for the 2024-25 award year, parents report only the 529 accounts where the student filing the form is the designated beneficiary. Accounts your parents own for a brother or sister are left off entirely.¹²

Why the Rule Changed

Before the 2024-25 award year, parents had to report the combined value of every 529 they owned, including accounts earmarked for younger children who were years away from college. That inflated reported assets and shrank aid eligibility for the child who happened to be applying first. The new rule ties reporting to the beneficiary named on the account.¹

The math matters for families with several children and meaningful balances. Say your parents saved $50,000 for each of three kids. Under the old approach, the FAFSA would have counted all $150,000 as a parental asset when the oldest applied. Now only the $50,000 designated for that oldest child appears. The result is a lower Student Aid Index and often more need-based aid.

Which 529 Accounts You Do Report

If a 529 names the FAFSA applicant as the beneficiary, it belongs on the form. Where it goes depends on who owns it and whether the student is a dependent.

Parent-Owned Accounts

A 529 owned by a parent for the applicant is reported as a parental investment on the FAFSA.³ Parental assets are assessed on a bracketed scale that tops out at 5.64%. For every $10,000 in a parent-reported 529, aid eligibility drops by at most about $564. One note on the asset protection allowance that used to shield some parental assets from the formula: for the 2026-27 award year it is $0 across all parent ages and household types, so every reported dollar flows into the SAI.⁴

Student-Owned Accounts

For a dependent student, a 529 the student owns is still treated as a parental asset and assessed at the same 5.64% maximum rate. The FAFSA groups all qualified education savings for dependents into the parent section regardless of who technically holds the account.²

Independent students report a 529 they own as their own asset.³ An independent student without dependents faces a 20% asset conversion rate; an independent student who supports dependents other than a spouse is assessed at 7%.⁴ At 20%, a $30,000 529 balance would push the SAI up by $6,000.

Accounts Owned by Grandparents or Other Relatives

A 529 owned by a grandparent, aunt, uncle, or anyone other than the student or parent is not reported on the FAFSA. The form asks only about assets held by the student and parents, so third-party accounts stay off entirely.

Distributions used to be the catch. Under the old rules, a grandparent’s 529 withdrawal counted as untaxed student income on the following year’s FAFSA and could shave aid eligibility by as much as half the distribution. The simplified FAFSA pulls income data directly from federal tax returns, and because 529 distributions are not taxable income, they no longer appear on the form.¹

One boundary worth flagging: about 200 private colleges use the CSS Profile alongside or instead of the FAFSA for their own institutional aid. The CSS Profile still asks about 529 accounts owned by relatives outside the household, and those balances can reduce the institutional aid a school offers. If your student is applying to CSS Profile schools, the FAFSA rule on sibling and grandparent accounts does not carry over automatically. Check each school’s policy.

How to Enter the Numbers

The FAFSA asks for asset values as of the day you sign the form, not a tax return date.² Before you start, pull current statements for every 529 where the applicant is the designated beneficiary. You want net worth: current market value minus any debt against the asset.

Dependent students’ 529 values go in the parent investment section. Independent students enter theirs in the student investment section. Round to the nearest dollar without commas or decimals.³ Include only accounts naming the FAFSA applicant. Sibling accounts stay off.²

Save the statements you used. If your school selects the file for verification, the financial aid office will ask for documentation matching the figures you reported, and any discrepancy has to be resolved before federal aid is disbursed.⁵

What to Do With a Sibling’s Leftover 529

Once you know a sibling’s account doesn’t touch the FAFSA, the next question is often what happens if that account has more money than the sibling will ever use. Federal rules give account owners several ways to redirect the balance without triggering the 10% penalty on earnings.

The account owner can change the beneficiary to another family member, including the student now applying for aid. Once the change is made, the new beneficiary can use up to $10,000 of the 529 lifetime toward qualified education loan repayment, and another $10,000 lifetime is available for a sibling of the beneficiary.⁶

Starting in 2024, the SECURE 2.0 Act added a Roth IRA rollover option for leftover 529 funds. The rules are strict:⁷

Lifetime cap of $35,000 per beneficiary across all rollovers.
Each year’s rollover cannot exceed the Roth IRA contribution limit, which is $7,500 for 2026.⁸
The 529 account must have been open more than 15 years.
Only contributions and attributable earnings that have been in the account at least five years qualify.
The transfer must go directly from the 529 trustee to the beneficiary’s Roth IRA.

At the $7,500 annual ceiling, reaching the full $35,000 takes at least five years, so this route works best when planned early. Between beneficiary changes, the loan repayment provision, and the Roth rollover, funds saved for a sibling who no longer needs them have real places to go.

1
Federal Student Aid. FAFSA Simplification Act Changes for Implementation in 2024-25
2
Federal Student Aid Partners. Filling Out the FAFSA Form, 2025-2026 Federal Student Aid Handbook
3
Federal Student Aid. Current Net Worth of Investments, Including Real Estate (2025-26)
4
U.S. Department of Education’s Federal Student Aid. 2026-27 Student Aid Index (SAI) and Pell Grant Eligibility Guide
5
Federal Student Aid. Special Cases, 2025-2026 Federal Student Aid Handbook
6
Office of the Law Revision Counsel. 26 U.S. Code 529 – Qualified Tuition Programs
7
Internal Revenue Service. Publication 590-A (2025), Contributions to Individual Retirement Arrangements (IRAs)
8
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500