A. Starting 2016 Fall, the process of applying for financial aid has a major change.
Change of Financial Aid Process
Students and their families will be able to file the Free Application for Federal Student Aid (used to determine financial aid from the government as we ll as from colleges) 3 months earlier, or as early as October 1st. Instead of estimating tax data that has not been filed, families will use past year's filings to report income and assets.
Change of Grandparent-owned 529 Cashing Strategy
This change brings a new strategy for grandparent-owned 529 plans -
Previously, withdrawals from such accounts counted as student income during the first three years of college. Now distributions made during the last 2 years are NOT reported on the FAFSA. So the new strategy is to delay cashing in on the grandparents' 529 accounts until the final 2 college years in order to maximize your chance of getting financial aid.