Navigating the New Rules: Financial Aid Qualification for 2024-2025
As we enter a new academic year for 2024-2025, there are a few changes to be aware of when it comes to Federal Student Aid qualification criteria.
What are the new rules that could increase aid?
The most meaningful changes are the ways 529 plans will be reported:
Withdrawals from accounts owned by grandparents and other non-parents are no longer reported as student income.
Only accounts in the student’s name will be reported as parental assets, whereas previously they had to include siblings.
Income and asset reporting separate from 529 plans:
Pre-tax contributions to employer retirement plans, worker’s compensation benefits, and other income sources not reported
Child support received is treated more favorably as an asset instead of income
A greater amount of income excluded overall from the eligibility formula
There are also rule changes to be aware of that could decrease aid:
Families with multiple college students can expect to pay more for each child enrolled as family contributions were previously divided by the number of college students to increase aid eligibility.
Small business owners and farmers must report the net worth of their business, regardless of size. Previously, this only applied if the business had 100+ employees.
Divorced or separated parents providing the most financial support to student(s) must apply, using their income and investments.
Have additional questions or want to speak with our team directly? Contact us.
Robert Amato, CFP®, CIMA®
Principal
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Source: J.P. Morgan College Planning Essentials 2024 Edition. Page 15. https://am.jpmorgan.com/us/en/asset-management/adv/investment-strategies/college-planning-essentials/