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Grandparents Can Give More to College 529 Plans After Rule Change

Outside contributions will no longer be penalized in financial aid decisions after Congress made tweaks that will go into effect for the 2024-25 school year.

RF Graduation students college

Photographer: skodonnell/E+/Getty Images

Grandparents who want to help pay for grandkids’ college costs are getting more bang for their buck. 

Recent changes to financial aid rules mean they’ll soon be able to contribute to 529 college savings plans that they own without penalizing their grandchild’s eligibility for federal money, a limitation that’s made some grandparents think twice before opening new accounts or adding to existing ones.