Navigating Financial Aid: New FAFSA Rules and Tips for Families

Saving for a college education is at the core of a comprehensive financial plan for families with children hoping to advance their education someday.

The use of savings vehicles such as 529 plans support these efforts. In fact, assets in 529 savings plans exceeded $500 billion as of June 30, 2024, according to the College Savings Plan Network.1

Still, as the costs of college continue to rise, the significance of financial aid persists. As a result, most families will rely on some form of federal financial aid to cover the cost of higher education.

Importance of federal aid

About $130 billion in total federal financial aid will be awarded this year. More than half of undergraduate students receive some type of aid, including federal student loans, according to the College Board (Trends in Student Aid 2023), with the average grant totaling about $10,500.2 It is also important to note that more than half of federal financial aid consists of loans which will have to be generally paid back, unless a loan forgiveness program is applied. In our view, this makes it more important than ever for families to implement a dedicated college savings program.

Composition of Federal Aid