529 Plan and College Savings

Archive for November, 2007

Question: 529 Plan assets and financial aid application?

Live in NJ. 529 Plan is with NY. Will be entering college in two years.

Will funds held in 529 Plan by my parents go against my financial aid application? What is included as my asset that can go against the eligibility for finan aid app?

Also can I get student loans & scholarships regardless of assets under my name?

Any supporting reference to your response will be very helpful (to avoid asking additional questions).

Answer: If the 529 is in your parents’ name, 5.6% counts against you, if it’s in your name, 35%.

Any assets set up as a custodial account for you are counted at your rate of 35%.

If you have too much in your name, like $100,000 and the school costs $20,000/yr, you will not be eligible for federal or college loans or need based scholarships. If this is the case, you need to look at schools that will offer your an academic/athletic scholarship. You need to be a top scoring student for that school’s entrance criteria in order for that to happen.

One thing your parents’ can do is spend your custodial money for your benefit before the FAFSA needs to be filled in. Then, at college time, pay for it out of their pocket. It’ll be a smaller amount since the aid should be higher because of the percentages listed above.

Upromise