Financial Aid

Education Savings Plans

Below we describe several types of educational savings plans and how to report the assets of those plans on the Free Application for Federal Student Aid (FAFSA).


529 Plans and Coverdell Education Savings Accounts

A 529 plan is a state-operated investment plan designed to help families save for future college costs. All 50 states offer 529 plans. Michigan's 529 plans are:

  • Michigan Education Trust (MET)
    MET is pre-paid tuition plan that allows parents, grandparents and others to pre-purchase undergraduate tuition. MET offers three tuition savings choices: a full benefits plan, a limited benefits plan and a community college plan.
  • Michigan Education Savings Program (MESP)
    MESP is a prepaid tuition savings plan in which contributions to accounts accumulate tax free until withdrawn for qualified higher education expenses. Once withdrawn for such expenses, the earnings on the account are taxed at the beneficiary’s income tax rate, which is often lower than that of the account owner.

How to report 529 plans on the FAFSA

If the parent is the owner of the program, the value is reported on the FAFSA as a parent asset. Note that you should report the value of all programs or plans, not just the one for the student applying for aid. For plans established by someone other than the student's parent, the value of the account is not reported on the FAFSA.

A Coverdell Education Savings Accounts is a trust created exclusively to pay the qualified education expenses of the designated beneficiary of the trust.

How to report Coverdell on the FAFSA

If the parent is the owner of the program, the value is reported on the FAFSA as a parent asset. Note that you should report the value of all programs or plans, not just the one for the student applying for aid. For plans established by someone other than the student's parent, the value of the account is not reported on the FAFSA.


Uniform Gifts to Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA)

UGMA and UTMA are custodial accounts that allow parents to transfer assets to their minor children.

How to report UGMA and UTMA on the FAFSA

Custodial accounts are considered assets of the student. Therefore, the account value would be reported as a student asset on the FAFSA.

Page last modified March 5, 2013