I'm confused. Just what is the goal of a fin aid officer - is it to allot more aid to the needy? Isn't it how much you make (vs. how much you save) determine how needy you might be?
So, all things being equal, and if one has a 529 and the other no 529 or savings (but has a hugh house, lavish lifestyle, porsche, mercedes, expensive suits clothes etc) then the aid goes to the person who spent all his money instead of the one saving it in a 529?
Really, if income did not go into a 529 it went somewhere else. Like the other poster said, just doesn't seem right to penalize the one with the discipline to save and plan for the future.