Trump accounts and the FAFSA: the 2027–28 form never mentions them
The 2027–28 FAFSA has been open since September 23, 2026. Neither the form nor the Education Department's 2027–28 Student Aid Index (SAI) guide mentions Trump accounts or section 530A: we searched the full text of both on September 30, 2026. Asked about financial aid in a July webinar, an IRS presenter pointed to the Education Department and said “nothing has showed up, as of yet”. Until the Department says something, two of its existing rules point in opposite directions, and they differ by 20% of the balance.
- Reading 1, not counted: the FAFSA says investments “do not include the home you live in, the value of life insurance, ABLE accounts, retirement plans (401[k] plans, pension funds, annuities, non-education IRAs, Keogh plans, etc.)”, and the IRS says “A Trump account is a traditional IRA under section 408(a).” On that reading the balance adds $0.
- Reading 2, the student's investment: the IRS says that when the account is opened “the eligible individual is the owner of the Trump account”, and the FAFSA counts accounts a student owns: “UGMA and UTMA accounts are considered the assets of the student and must be reported as an asset of the student on the FAFSA form, regardless of whether the student is required to report parent information.” A dependent student's assets count at 20%, with no allowance.
- Not a parent asset: the law that puts a dependent student's college savings on the parents' side covers only 529 plans, state prepaid tuition plans and Coverdell accounts.
- No effect at all for families the FAFSA does not ask about assets: “Certain applicants will be exempt from asset reporting based on income and federal benefits received”.
What each reading adds to the Student Aid Index
| Balance | Reading 1: not counted | Reading 2: student's asset | Same money in a parent-reported 529 | Same money in a UTMA |
|---|---|---|---|---|
| $1,000 | $0 | $200 | $26 to $56 | $200 |
| $2,500 | $0 | $500 | $66 to $141 | $500 |
| $5,000 | $0 | $1,000 | $132 to $282 | $1,000 |
| $10,000 | $0 | $2,000 | $264 to $564 | $2,000 |
| $25,000 | $0 | $5,000 | $660 to $1,410 | $5,000 |
Why the amounts are small for 2027–28
- Contributions started in July 2026. IRS Notice 2025-68: “Contributions to Trump accounts cannot be made before July 4, 2026.” Contributions from parents, relatives and employers share a limit that the notice gives as “$5,000 per year for 2026 and 2027”.
- The $1,000 government deposit is for young children. It goes to a child “born after December 31, 2024, and before January 1, 2029”, so no one applying for 2027–28 as a dependent student has it.
- The FAFSA values assets on the day you sign. The form: “Net worth means the current value, as of today, of investments, businesses, and/or investment farms”.
- Treasury is opening accounts automatically. The temporary regulations published September 30, 2026 say “On or about October 1, 2026, the Secretary shall make an election” to open an “auto account” for each eligible child, and that “an auto account can only receive qualified general contributions and the $1,000 pilot program contribution”. An account with nothing in it adds nothing under either reading.
- The account's restricted years end at 17. The same regulations say the growth period “ends on December 31 of the calendar year in which the account beneficiary attains age 17”, so for students born in 2009 it ends on December 31, 2026. After that, withdrawals follow IRA rules, and the Education Department's handbook says of IRAs and similar plans that the value “also is not counted as an asset, but distributions do count as income”.
Why neither reading is settled
The tax law's line, that a Trump account “shall be treated for purposes of this title in the same manner as an individual retirement account under section 408(a)”, speaks to the tax code (“this title” is Title 26), not to federal student aid. The FAFSA's list of retirement plans it ignores does not name Trump accounts, and the form does not mention them anywhere else. The Higher Education Act's own definition of assets lists “investments” without naming retirement accounts at all. The only statutory rule that moves a child's account to the parents applies to a “qualified education benefit”, which the Act defines as a 529 or state prepaid tuition plan or a Coverdell account. So the answer depends on how the Education Department reads its own form. We will update this page when it says.
For what a Trump account is worth after tax next to a 529, a Roth IRA or a UTMA account, see our Trump account vs 529 calculator; for how your state taxes it, see Trump accounts by state.
Rechecks and changes
We re-read the FAFSA, the SAI guide and the Education Department's announcements at least once a month.
- . First published.
Sources
- 2027–28 FAFSA form (PDF), notes for questions 22 and 40
- 2027–28 Student Aid Index (SAI) and Pell Grant Eligibility Guide
- 2027–28 FAFSA Specifications Guide, Volume 5
- Federal Student Aid, 2027–28 FAFSA beta testing plan (updated Sept. 23, 2026)
- 2026–27 Federal Student Aid Handbook, Application and Verification Guide, chapter 2
- IRS Notice 2025-68
- Treasury Decision 10056, temporary regulations (Federal Register, Sept. 30, 2026)
- IRS, Understanding Trump accounts (webinar transcript)
- 20 U.S.C. 1087vv (Higher Education Act section 480)
- Public Law 119-21, section 70204 (Internal Revenue Code section 530A)
Dollars Ahead is not affiliated with the Education Department, the IRS or any financial institution. This page reports what official documents say and do not say. It is not financial aid, tax or legal advice; your school's financial aid office applies the rules to your file.