One of the most common reasons parents hesitate to open a Fidelity 529 plan is the fear of "penalizing" their child. The logic seems sound: if you save more money, the government will give you less financial aid. However, as we move into the 2025–2026 academic year, the rules have changed in a way that favors savers more than ever before. Under the FAFSA Simplification Act , the impact of a 529 plan is often much smaller than families realize. Here is everything you need to know about how your Fidelity 529 interacts with financial aid. 1. The 5.64% Rule (Parent-Owned Accounts) If you (the parent) own the Fidelity 529 and your child is a dependent, the FAFSA treats that money as a parental asset . The Math: Only a maximum of 5.64% of the account's value is factored into the Student Aid Index (SAI) . The Reality: If you have $10,000 in a Fidelity 529, the federal government only expects you to contribute about $564 of that toward college per year. Your aid eligibility ...