"Grandparent Loophole: How FAFSA Delays Impact College Financial Aid"

The FAFSA's new "Student Aid Index" calculation simplifies the financial aid process, allowing grandparents to contribute to college savings without negatively impacting aid eligibility. Middle-income families stand to benefit the most, as the streamlined form reduces the impact of assets held in grandparent-owned 529 plans. While this change is advantageous, families should consider potential implications for Medicaid eligibility and nonfederal institutional aid. Additionally, 529 plans offer various benefits for college savings, and recent expansions further encourage families to save for higher education.