Education Savings Plans

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

529 Plans

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 a prepaid tuition plan which allows for the pre-purchase of tuition based on today's rates. Investment performance is dependent upon the rate at which tuition has increased by the time the beneficiary is in college.
  • Michigan Education Savings Program (MESP)
    MESP is a savings plan in which any earnings grow free from federal tax. Withdrawals are tax-free at both the federal and state level when used for qualified higher education expenses.

Both plans offer a state income tax deduction for contributions made by Michigan taxpayers.

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.

Coverdell Education Savings Accounts

Coverdell accounts are trusts 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) / 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.