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529 plan:
Posted on 2/5/20 at 5:53 pm
Posted on 2/5/20 at 5:53 pm
Wife and I are setting aside money to assist grand daughter offset college expenses later in life. She is 7. She is an only child in a one parent household. Mother makes nowhere near enough to save for her educational expenses.
Question: Will assets in this plan be considered when she applies for aid/assistance/scholarships later? I do not want her to be denied assistance that she would otherwise be eligible for.
Wife and I have been putting CD's in our name with her listed as payable upon death. We would love to take the tax beak associated with these plans.
Is there a way to schedule payments (a certain amount per year) distributed to her once college age?
thanks in advance.
Question: Will assets in this plan be considered when she applies for aid/assistance/scholarships later? I do not want her to be denied assistance that she would otherwise be eligible for.
Wife and I have been putting CD's in our name with her listed as payable upon death. We would love to take the tax beak associated with these plans.
Is there a way to schedule payments (a certain amount per year) distributed to her once college age?
thanks in advance.
4
Posted on 2/5/20 at 7:06 pm to cusoonkpd
I may be wrong here but since you’re the grandparents and not the parent your grandchild wouldn’t have to report it on the FAFSA (but they will if she chooses a college that requires a CSS) so it shouldn’t effect any aid.
This post was edited on 2/5/20 at 8:21 pm
Posted on 2/5/20 at 8:13 pm to cusoonkpd
In La? The state plan might be great if they approve the match again. They have a % contribution based match which is scaled depending on parents income and is really good.
Also I believe you can set it up under your name as custodian for the child if you can get her ss #. That way you can manage it and try to ensure it doesn’t get raided by the parent should you be worried about that. Hopefully not.
The state account is reimbursable for expenses, so I’m not sure about structuring payments. Although most school expenses can be reimbursed - housing, books, tuition/school fees, possibly even transportation and food.
Also I believe you can set it up under your name as custodian for the child if you can get her ss #. That way you can manage it and try to ensure it doesn’t get raided by the parent should you be worried about that. Hopefully not.
The state account is reimbursable for expenses, so I’m not sure about structuring payments. Although most school expenses can be reimbursed - housing, books, tuition/school fees, possibly even transportation and food.
Posted on 2/6/20 at 8:50 am to eng08
For the people who are using a 529, what avenues are you using to pay for non-qualifying education expenses? The wife has a baby on the way so I have started looking at college saving accounts. With a 529, there are some fairly significant costs, mostly a vehicle, that will be associated with Lil' Crawfish going to college that aren't eligible under a 529.
Posted on 2/6/20 at 9:02 am to Drunken Crawfish
quote:
For the people who are using a 529, what avenues are you using to pay for non-qualifying education expenses? The wife has a baby on the way so I have started looking at college saving accounts. With a 529, there are some fairly significant costs, mostly a vehicle, that will be associated with Lil' Crawfish going to college that aren't eligible under a 529.
You could always withdraw principle from a Roth for non qualified education expenses.
Posted on 2/6/20 at 11:47 am to cusoonkpd
I think people jump to quickly on the thought of a child on the way about college funds when there are plenty of other financial needs to meet. How many parents out there worry about college funds and dont bother to carry quality life insurance?
Posted on 2/6/20 at 2:46 pm to GAFF
quote:
but since you’re the grandparents and not the parent your grandchild wouldn’t have to report it on the FAFSA (but they will if she chooses a college that requires a CSS) so it shouldn’t effect any aid.
Grandparent-owned 529s aren't counted as an asset, but the distributions are counted as income which has a greater effect on aid eligibility.
Grandparent-owned 529 work arounds
Posted on 2/7/20 at 1:14 pm to cusoonkpd
There are quite a few other alternative options to help your grandchild other than just 529s. You could set aside your money in a specified account in your name and then use that when she gets ready to go to college as down payment for a house or apartment for her to live in when she gets there. Name the grandchild as TOD of that investment account in the event you die. She might want roommates in college then have them pay rent on the property. Just wanted to bring up an outside the box solution.
She may get a full ride somewhere and then you still have these assets for her first home purchase, a wedding gift, law school, med school, PH.D to private university etc.
She may get a full ride somewhere and then you still have these assets for her first home purchase, a wedding gift, law school, med school, PH.D to private university etc.
This post was edited on 2/7/20 at 1:19 pm
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