FAFSA Information
For need-based financial aid, VPEP contract benefits are reported on the Free Application for Federal Student Aid (FAFSA) if the contract is owned by the student's parent whose assets are reported on the FAFSA. (The FAFSA is the application most colleges and universities use for determining federal need-based financial aid eligibility.) Instructions for completing the FAFSA indicate that students who must report parental information should report all qualified educational benefits or education savings accounts owned by their parents, including 529 college savings plans (VEST, CollegeAmerica, or CollegeWealth) and the refund value of 529 state prepaid tuition plans (VPEP). Approximately 5.6% of the value of Section 529 college savings plans and prepaid tuition plans will be included in the calculation of federal financial aid eligibility. If the VPEP contract (or other qualified 529 educational asset) is owned by a dependent student who must report parental information on the FAFSA (custodial accounts under Uniform Transfers to Minors or Uniform Gifts to Minors statutes, for example) its value is not counted toward federal financial aid eligibility and should not be reported on the FAFSA. The value of VPEP contracts owned by someone whose assets are not reported on the FAFSA (such as grandparents, aunts, or uncles) are not reported on the FAFSA. The receipt of contract benefits should not affect the beneficiary's receipt of merit-based financial aid (academic or athletic scholarships, for example). Ownership of a VPEP contract also will not be taken into account when determining a student's eligibility for Virginia financial aid. VPEP benefits do not affect a student's eligibility for a Virginia Tuition Assistance Grant for Virginia residents who attend an eligible, independent, nonprofit institution of higher education in Virginia. Reference the VPEP Benefits Guide for complete, step-by-step instructions.
VPEP Account Values Reported on FAFSA
If the VPEP contract must be reported on the FAFSA, the value to be reported is the refund value of any benefits. This is the amount that you would receive if the account were closed and you received a refund. For VPEP contracts, this amount is the total of payments made minus any benefits already used plus interest at the reasonable rate of return, compounded annually, on the amount of payments made (for accounts owned more than three years). If parental assets are being reported on the FAFSA and there are other VPEP or VEST accounts owned by the parents, those account values must also be reported, even if the beneficiary is different from the student on whose behalf the FAFSA is being completed. For VEST accounts, the account value is defined as the current balance or market value as of the date of reporting.
The most current account values for your VPEP and/or VEST accounts are available online. Begin by clicking My Account (located at the top of every page). Call us toll free at 1-888-567-0540 if you need additional help from one of our customer service representatives.