The Education Plan® Points Out Key Changes to FAFSA Regulations in Relation to 529 Education Savings Plans

For Immediate Release
Contact: Joanie Griffin

Santa Fe, NM – November 14, 2023 – Earlier this year, FAFSA (Free Application for Federal Student Aid) rolled out new regulations for the 2024–2025 award year, including important changes that impact 529 education savings plans. Under the new regulations, grandparent contributions will no longer negatively affect a student’s financial aid eligibility—creating further flexibility for grandparents to contribute to their grandchildren’s future educational opportunities. By utilizing a 529 education savings plan, like the one offered through The Education Plan®—New Mexico’s direct-sold 529 education savings plan—grandparents can save as they’re able and contribute for future qualified education-related expenses.

“Not only do 529 plans offer flexibility in terms of facilitating the education path that best fits your child or grandchild’s needs, but the funds can be used for a variety of expenses, making them one of the most robust options for forward-thinking family planning,” said Natalie Cordova, Executive Director of the Education Trust Board of New Mexico, the organization that administers The Education Plan®.

Under previous FAFSA regulations, withdrawals from grandparent-owned accounts counted toward the student’s available funding for college. Funds were reported as untaxed income, with 50% of the funding counting as available funds for college—diminishing financial aid eligibility. With the recent change, grandparent-owned 529 accounts are not reported as income, gifts, or available funding, meaning the student’s eligible financial aid amount will no longer be impacted.

“This is a huge opportunity for all families,” added Cordova. “Any amount saved now can help reduce the burden of student loan debt. Studies show that students with as little as $500 saved for college are three times more likely to attend college and four times more likely to graduate. With the holidays around the corner, it’s a perfect time to think outside the box and into the future by gifting contributions to a 529 plan. You’ll be setting them up for a brighter future with the gift of education.”

529 plans can be used for a wide range of qualified education expenses including tuition, books, room and board, meal plans, computers and software, educational special needs services, K-12 tuition (up to $10,000 per year), apprenticeship expenses, and even student loan repayment (up to $10,000). Funds can be used at any accredited trade or vocational school, college, or university throughout the nation.

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The Education Trust Board is the governing body for the New Mexico 529 education savings programs. A 529 education savings plan is a tax-advantaged account designed to help pay for future education expenses. The State of New Mexico sponsors two plans: a direct-sold plan (The Education Plan) and an advisor-sold plan (Scholars Edge).To learn more about New Mexico’s 529 Education Savings Programs, visit


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For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The Education Plan is administered by The Education Trust Board of New Mexico. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-today operations, including investment advisory, recordkeeping and administrative services. The Education Plan’s portfolios invest in: (i) mutual funds; (ii) exchange traded funds; and/or (iii) a funding agreement issued by New York Life. Investments in The Education Plan are not insured by the FDIC. Units of the portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the portfolios you choose. You could lose all or a portion of your money by investing in The Education Plan depending on market conditions. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

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