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☕ DrinkCoffeeAndProfit
Smart money moves before breakfast
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Inspiration Quote for the Day
“A society grows great when old men plant trees whose shade they know they shall never sit in.”
Greek proverb
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The Morning Ritual
Grandma’s College Money Just Became Invisible to One Aid Form. Not the Other.
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If you have a grandkid finishing high school, there is probably a 529 statement in a white envelope somewhere in your kitchen. A 529 is a tax-advantaged college savings account. Today that envelope gets a second reader. The CSS Profile opens this morning. That is the other college aid form. A few hundred colleges, mostly private, use it to hand out their own grant money.
The free federal form, the FAFSA, opened eight days ago. Here is what caught my eye. The two forms now read grandparent money in opposite ways. One ignores it completely. The other can count it against the kid. Same check. Two answers.
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In One Sip
► The 2027-28 FAFSA went live on September 23. That is the earliest launch on record. It covers federal grants and loans. Source: Federal Student Aid.
► The CSS Profile opens today. It runs `$25` for the first school and `$16` for each one after. Family income under `$100,000` gets the fee waived on its own. Source: College Board.
► Since the 2024-25 school year, tuition paid from a grandparent’s 529 does not show up on the FAFSA. Under the old rule, it counted as student income. Aid could shrink by up to -`50%` of the payment. Source: FAFSA Simplification Act.
► Since July 1, new Parent PLUS loans stop at `$20,000` a year per student. The lifetime cap is `$65,000`. That is the federal loan in the parent’s own name. The rate for this school year is `9.07%`.
► The buried part: the CSS Profile never adopted the FAFSA change. It can still ask about any 529 that names the student as beneficiary. Each college decides what to do with that.
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Why It Matters for Your Money
Say your grandson’s spring bill is `$20,000`. You pay it straight from a 529 in your name.
Under the old FAFSA, that payment counted as his income. His aid the next year could drop by -`$10,000`. I watched a neighbor learn that rule one award letter too late.
Under today’s FAFSA, the hit is zero. He keeps +`$10,000` of aid the old rule would have taken. I like this change a lot.
Now run the same money through a 529 owned by his parents. The FAFSA counts it as a parent asset, at no more than `5.64%`. On `$20,000`, that is about `$1,128` of aid at most.
On the federal form, your account is the cleanest college dollar in the whole family. Cleaner than the parents’ own.
Then the CSS Profile opens. Same `$20,000`. Zero on the federal math. Possibly thousands on a private college’s own math.
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The Wealth Angle
Here is where it gets interesting. The loan cap and the form gap point at the same spot.
A parent who maxes out the new PLUS loan for three years gets only `$5,000` in year four. At a school charging `$60,000` or more, that leaves a hole. Families will lean harder on the college’s own grants to fill it.
Think about that for a second. The money that matters most now is school grant money. And school grant money is decided by the one form that can still see your 529.
I think most grandparents writing checks this fall have no idea which form their grandkid’s colleges use. A public university on the FAFSA alone treats your gift as invisible. A private college on the CSS Profile may treat it as a reason to give less.
Pick the school list first. Then decide how and when the money moves.
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☕ Key Insight:
The FAFSA stopped counting grandparent 529 money two years ago. The CSS Profile, open as of today, never did. Know which form each college uses before the first dollar leaves your account.
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Coffee Break Move
Before your second cup, ask for the college list. Check each name against the College Board’s list of CSS Profile schools. It takes five minutes.
If you hold a 529: email the aid office at every CSS school on the list. Ask one question. How do you treat 529 money from a grandparent? Get the answer in writing. I would not move a big check to a CSS school before that reply lands.
If money is tight: the FAFSA is free. The CSS fee disappears by itself under `$100,000` of family income. Filing early gets the award letters moving sooner.
Put the envelope back in the kitchen drawer after that. You planted the tree years ago. Just make sure the paperwork lets the kid sit in the shade.
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