(1) Except as provided in subsection (2), a student loan program, student grant program, or other financial assistance program established or administered by the state or a financial assistance program administered by a state-supported college or university must treat the balance in an account of which the student is a designated beneficiary as if it were an asset of the parent of the designated beneficiary and not as a scholarship or grant or as an asset of the student for determining a student's or parent's income, assets, or financial need.
(2) This section does not apply if:
(a) federal law requires all or a portion of the amount in an account to be taken into account in a different manner;
(b) federal benefits could be lost if all or a portion of the amount in an account is not taken into account in a different manner; or
(c) a specific grant establishing a financial assistance program requires that all or a portion of the amount in an account be taken into account.