FAFSA Application 2024 Changes: Several upgrades have been made to the 529 education savings plan for 2024 that will help you save for college and pay for it.
Table of Contents
Congress authorized this new implementation to roll over $35,000 in left over savings into Roth individual retirement accounts tax-free.
It eliminates the fear that money not being used might remain trapped or incur taxes for the rest of its life.
Taking a closer look at the Free Application for Federal Student Aid (FAFSA), the Department of Education created the so-called grandparent loophole by December.
Using a 529 plan allows grandparents to fund a grandchild’s education without affecting the student’s financial aid eligibility.
Also Read: COLA Increase 2025 Predictions: Social Security benefit is going up by 2.6%
How do the new rules work?
Each year, Congress passes new acts that can add or eliminate these loopholes.
As a result of the FAFSA Simplification Act, the ‘grandparent loophole’ has an important distinction that should be noted.
As the name suggests, anyone who isn’t a parent can use it. This is a way for students to lower the cost of education through the help of their relatives, friends, or grandparents.
As a result of this act, questions related to selective service registration and drug convictions have been removed.
Beginning with the 2023-24 award year, there will also be questions about applicants’ sex, race, and ethnicity.
In the grandparent loophole, you can contribute the most amount, get tax-free growth and withdrawals, and even receive some in-state tax advantages.
Also Read: FAFSA Income Limits 2024: How is it Calculated and FAFSA income limit this year
