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Do funds in the custodial account affect eligibility for financial aid of the beneficiary?

Yes.

Question 42 of the Free Application for Financial Student Aid (FAFSA) form asks about the student’s net worth.

Custodial accounts (UGMA/UTMA) like those offered on Stash, are considered to be assets owned by the student if the student is the owner of the account and their parent is the custodian.

If the parent is the owner and the student is the custodian, then the assets count toward the parent’s net worth.

Dependent students must provide information about their legal parents when applying for financial aid. This includes the parent’s net worth. This means that dependent students will have to report any funds held within a custodial account.

If the student owns the account, it counts toward their own net worth. If their legal parents own the account, it counts toward the net worth of the parents.

In short, a custodial account will always impact an application for college financial aid.

For more information on filing a FAFSA, including how UGMA and UTMA accounts affect the process of applying for college financial aid, the official blog of the U.S. Department of Education has a detailed post on this subject.

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