Under a little-noticed loophole in a new federal law, money set aside in college-savings plans will not be counted in determining a dependent student’s eligibility for need-based financial aid if the account is in the student’s name, according to guidance released last week by the U.S. Department of Education.
The loophole — created by Congress in February when it passed deficit-reduction legislation — is reflected in a proposed revision of the Free Application for Federal Student Aid, or Fafsa, which the U.S. Department of Education published last Tuesday in the Federal Register.
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