The 2012-2013 FAFSA form has clarified how a family should record savings and investments.  This is a very important point of clarification in that it has been subject to different interpretation.

In the past, there was an understanding that savings and/or investments in which the student was the owner should be reported on the FAFSA in the student's asset area.  Custodial accounts were always tricky.  529 plan accounts often are established with the student as the owner and the parent as the custodian.  How this was recorded on the document might change from year to year dependent upon how one read and interpreted the document.

This year's document is clearer in that explanation.  It reads...."For a student who must report parental information, the accounts are reported as parental investments in question 89...."  The accounts they refer to are qualified educational benefits or education savings accounts (e.g. Coverdell savings accounts, 529 college savings plans and the refund value of 529 prepaid tuition plans).

This is a very important distinction relative to how the EFC is calculated.  The expectation of assets is much lower when recorded as a parent asset compared to those recorded as student's assets.  These exact percentages can be found in the video; the variables that drive the EFC number.