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What are 529's
The College 529 plans including the Prepaid College 529 are devised to help students and their
families to pay for college tuition costs. They are called 529 because of the federal tax code
section through which they have been given authorization. Tuition prepaid plans and college
savings plans are offered by the state. Every one of the states offer either prepaid tuition plans or
savings plans.
The Prepaid College 529 plan allows an individual to purchase units or contracts in which the
value of the plan that is purchased will remain the same in the future despite inflation. This
secures your investment and it remains at no risk. When you need to use it - it is there. It is not
affected by the stock market trends. The amount of the tuition which is prepaid only remains the
same if it is used at an in-state college.
families to pay for college tuition costs. They are called 529 because of the federal tax code
section through which they have been given authorization. Tuition prepaid plans and college
savings plans are offered by the state. Every one of the states offer either prepaid tuition plans or
savings plans.
The Prepaid College 529 plan allows an individual to purchase units or contracts in which the
value of the plan that is purchased will remain the same in the future despite inflation. This
secures your investment and it remains at no risk. When you need to use it - it is there. It is not
affected by the stock market trends. The amount of the tuition which is prepaid only remains the
same if it is used at an in-state college.
So the major benefits of the prepaid plan are the guarantee and the low risk. The guarantee of the prepaid account is the responsibility of the state
government. They must match any increase in the in-state tuition. The Prepaid College 529 plan is low risk. This investment is for those college students
who already know which college they will be attending in the future. Performance wise, they are not as high risk as investing in CDs or savings accounts
plus their performance is higher.
The Prepaid College 529 plan has some downfalls as well as the good points. The state residency requirement is a restriction which limits participation in
the program. Also if the student decides that an out-of-state college or a private college is best then a prepaid tuition plan may not be enough to cover the
costs. Prepaid plans are based on in-state tuition costs. If you do cancel the Prepaid College 529 plan there can be penalties which include losing the
interest and the cost for canceling the plan. There are rules and restrictions governing each one of the 529 plans. Each plan can face rule changes
independently of the other.
government. They must match any increase in the in-state tuition. The Prepaid College 529 plan is low risk. This investment is for those college students
who already know which college they will be attending in the future. Performance wise, they are not as high risk as investing in CDs or savings accounts
plus their performance is higher.
The Prepaid College 529 plan has some downfalls as well as the good points. The state residency requirement is a restriction which limits participation in
the program. Also if the student decides that an out-of-state college or a private college is best then a prepaid tuition plan may not be enough to cover the
costs. Prepaid plans are based on in-state tuition costs. If you do cancel the Prepaid College 529 plan there can be penalties which include losing the
interest and the cost for canceling the plan. There are rules and restrictions governing each one of the 529 plans. Each plan can face rule changes
independently of the other.
529's Can be Used with Financial Aid
Starting a savings plan for a child's college education can be a daunting task initially with so many
avenues for setting up a savings plan that is somewhat flexible and yields a high return for your
child.
The best advice is to start early and parents can initiate a savings plan as early as birth and grow
the nest egg over many years. If you start early you can be gaining the advantage of interest on the
funds in tax benefits which add growth to your plan. Instead of gifts for your child, relatives and
grandparents can also contribute to your child's college fund.
For some a 529 plan makes good sense and can compliment the financial aid plans offered. For
some parents they have multiple children that will attend college at the same time, and where the
financial demand is doubled. A 529 Plan is a state educational savings plan which was plan it
can provide some federal tax benefits to you.
avenues for setting up a savings plan that is somewhat flexible and yields a high return for your
child.
The best advice is to start early and parents can initiate a savings plan as early as birth and grow
the nest egg over many years. If you start early you can be gaining the advantage of interest on the
funds in tax benefits which add growth to your plan. Instead of gifts for your child, relatives and
grandparents can also contribute to your child's college fund.
For some a 529 plan makes good sense and can compliment the financial aid plans offered. For
some parents they have multiple children that will attend college at the same time, and where the
financial demand is doubled. A 529 Plan is a state educational savings plan which was plan it
can provide some federal tax benefits to you.
There are two categories of 529 Education plans and they are a savings plan or a prepaid plan and also some plans have a combination of both plans.
Educational institutions can offer the prepaid plan only however you may purchase a plan with a Broker, a direct sold savings program, a prepaid contract
or a prepaid unit/ guaranteed savings plan.
For instance with a New York 529 College Savings Program plan you would enroll with a broker and there are no state residency requirements and will
accept contributions to a maximum of $ 358,496.00. Some traditional college education investors would argue that tax efficient mutual funds can yield
higher returns and that with a 529 plan the costs outweigh the tax benefits.
The 529 savings plans do have a fee associated with administering the plan or a management fee. However there are reasons why a 529 plan are a better
investment than some of the tax mutual funds. One is that some mutual funds will have year end capital gains that are taxable. Secondly, when you
liquidate the mutual fund to pay for college education the appreciated value is also taxed.
Rising tax rates also will affect the rates on most capital gains on the long term are traditionally lower at only 5 % for income in the ten percent or fifteen
percent
tax brackets, and fifteen percent for everyone else. In the next three years, tax on capital gains is expected to rise to ten and twenty percent. As your child
approaches college age a 529 Plan will reduce the equity exposure you have built up over the years without tax penalties. But with taxable mutual funds
there is a tax on the built up equity unless you want to pay the tax to switch into another plan.
Finally the capital gains income can affect the financial aid eligibility for the next year which would disqualify your child for the need based financial aid. With
a 529 plan there is no income to report when the distributions come out tax free and financial aid eligibility is still protected. The good news is that the costs
of a 529 plan are dropping due to competition and contract renewal negotiations in the near future.
Educational institutions can offer the prepaid plan only however you may purchase a plan with a Broker, a direct sold savings program, a prepaid contract
or a prepaid unit/ guaranteed savings plan.
For instance with a New York 529 College Savings Program plan you would enroll with a broker and there are no state residency requirements and will
accept contributions to a maximum of $ 358,496.00. Some traditional college education investors would argue that tax efficient mutual funds can yield
higher returns and that with a 529 plan the costs outweigh the tax benefits.
The 529 savings plans do have a fee associated with administering the plan or a management fee. However there are reasons why a 529 plan are a better
investment than some of the tax mutual funds. One is that some mutual funds will have year end capital gains that are taxable. Secondly, when you
liquidate the mutual fund to pay for college education the appreciated value is also taxed.
Rising tax rates also will affect the rates on most capital gains on the long term are traditionally lower at only 5 % for income in the ten percent or fifteen
percent
tax brackets, and fifteen percent for everyone else. In the next three years, tax on capital gains is expected to rise to ten and twenty percent. As your child
approaches college age a 529 Plan will reduce the equity exposure you have built up over the years without tax penalties. But with taxable mutual funds
there is a tax on the built up equity unless you want to pay the tax to switch into another plan.
Finally the capital gains income can affect the financial aid eligibility for the next year which would disqualify your child for the need based financial aid. With
a 529 plan there is no income to report when the distributions come out tax free and financial aid eligibility is still protected. The good news is that the costs
of a 529 plan are dropping due to competition and contract renewal negotiations in the near future.
Which 529 Plan is Right for You
A 529 UGMA savings plan is an account intended for covering college expenses. UGMA means
Uniform Gift To Minors Act. The regulations governing this type of account are set by the state. It
is a custodial account that is set up by the parent for the benefit of the minor child. Usually at
age 18, the account leaves the hands of the parents or donor and becomes the property of the
minor. Some states differ regarding the age factor. For the duration of time in which the 529
UGMA funds are controlled by the parent, the funds are taxable. Those monies are to be
recorded on the tax return of the minor and fall under particular child tax regulations. Most of
these accounts are set up at broker firms or banks.
Uniform Gift To Minors Act. The regulations governing this type of account are set by the state. It
is a custodial account that is set up by the parent for the benefit of the minor child. Usually at
age 18, the account leaves the hands of the parents or donor and becomes the property of the
minor. Some states differ regarding the age factor. For the duration of time in which the 529
UGMA funds are controlled by the parent, the funds are taxable. Those monies are to be
recorded on the tax return of the minor and fall under particular child tax regulations. Most of
these accounts are set up at broker firms or banks.
Once the UGMA custodial account is turned over to the beneficiary, the parents (or donors) can’t exact any rules or boundaries on the money. Although
the account is intended for the child’s education – once the child becomes an adult he is free to use the account funds from the 529 UGMA for any
purpose and the parent cannot take back the money under any circumstances because the account is deemed a gift from the donor. The custodian or
trustee over the money can not use any of the money for his own use or transfer the account to his name. This is illegal. The account is actually owned
by the child from the onset. In light of this, the donor must be sure that this type of account is the right solution for saving college expense money for the
child. Any money from the 529 UGMA savings account which is spent before the child has reached adult age must be used for the sole benefit of the
child. This spending does not include parental obligations such as food, shelter, clothing, or health care. It only includes educational expenses.
Note that the age of termination (which is the age in which the beneficiary takes control over the savings account) is not necessarily the age of majority for
contract signing. There’s also another type of custodial account called a UTMA account (Uniform Transfer To Minors Act). This account differs from the
529 UGMA in that the minor can also own real property, royalties, and patents. The UGMA is not as flexible as the UTMA.
Before you, as a parent or donor, decide to open a 529 UGMA savings account, be certain that you are in total agreement with the stipulations and
hindrances concerning your control over the funds.
the account is intended for the child’s education – once the child becomes an adult he is free to use the account funds from the 529 UGMA for any
purpose and the parent cannot take back the money under any circumstances because the account is deemed a gift from the donor. The custodian or
trustee over the money can not use any of the money for his own use or transfer the account to his name. This is illegal. The account is actually owned
by the child from the onset. In light of this, the donor must be sure that this type of account is the right solution for saving college expense money for the
child. Any money from the 529 UGMA savings account which is spent before the child has reached adult age must be used for the sole benefit of the
child. This spending does not include parental obligations such as food, shelter, clothing, or health care. It only includes educational expenses.
Note that the age of termination (which is the age in which the beneficiary takes control over the savings account) is not necessarily the age of majority for
contract signing. There’s also another type of custodial account called a UTMA account (Uniform Transfer To Minors Act). This account differs from the
529 UGMA in that the minor can also own real property, royalties, and patents. The UGMA is not as flexible as the UTMA.
Before you, as a parent or donor, decide to open a 529 UGMA savings account, be certain that you are in total agreement with the stipulations and
hindrances concerning your control over the funds.
Whenever a donor makes the decision to establish a 529 UGMA (Uniform Gifts to Minors Act) account, the provider of the account must bear in mind tat
the money put into the account is owned by the child and cannot be used by the parent or custodian for any other person. The child will not receive the
control of the account until he or she reaches a certain age. This rule was instituted by the state government. Despite this, the parent can use the money
for the child’s benefit before he reaches termination age. If you suspect that the beneficiary of the 529 UGMA account will decide not to use the account for
educational purposes, then do something about it.
Now, one thing that the donor or custodian cannot legally do is to use the funds from the account for shelter, clothing, or food for the child’s benefit
because these are considered parenting obligations. But, the money can be used for education equipment or tuition for the child. Whatever money is left
in the account when the child becomes an adult can be used for whatever the beneficiary wants. Young people do not always make the greatest
decisions—their lack of life experiences and ability to establish priorities can cloud their judgment. The bottom line is some young adults are responsible
and some aren’t. the donor or parent should be aware that he or she cannot withdraw and use any of the 529 UGMA account funds for himself or herself.
In order to set up one of these custodial accounts, the supplier of the funds for the account needs to select a trustee or custodian to be over the account
until the minor reaches the age of termination. The custodian’s responsibility is to be the manager over the 529 UGMA account and see that is is properly
used for the benefit of the child. It is not the custodian’s right to spend or use the money as he pleases.
Upon the minor’s reaching termination age, he has the right to approach the custodian and request control of the account. If the parent can be fairly sure
that the beneficiary will spend the account money properly, then a 529 UGMA account is a great idea for saving money for college. It is your choice—
choose carefully.
the money put into the account is owned by the child and cannot be used by the parent or custodian for any other person. The child will not receive the
control of the account until he or she reaches a certain age. This rule was instituted by the state government. Despite this, the parent can use the money
for the child’s benefit before he reaches termination age. If you suspect that the beneficiary of the 529 UGMA account will decide not to use the account for
educational purposes, then do something about it.
Now, one thing that the donor or custodian cannot legally do is to use the funds from the account for shelter, clothing, or food for the child’s benefit
because these are considered parenting obligations. But, the money can be used for education equipment or tuition for the child. Whatever money is left
in the account when the child becomes an adult can be used for whatever the beneficiary wants. Young people do not always make the greatest
decisions—their lack of life experiences and ability to establish priorities can cloud their judgment. The bottom line is some young adults are responsible
and some aren’t. the donor or parent should be aware that he or she cannot withdraw and use any of the 529 UGMA account funds for himself or herself.
In order to set up one of these custodial accounts, the supplier of the funds for the account needs to select a trustee or custodian to be over the account
until the minor reaches the age of termination. The custodian’s responsibility is to be the manager over the 529 UGMA account and see that is is properly
used for the benefit of the child. It is not the custodian’s right to spend or use the money as he pleases.
Upon the minor’s reaching termination age, he has the right to approach the custodian and request control of the account. If the parent can be fairly sure
that the beneficiary will spend the account money properly, then a 529 UGMA account is a great idea for saving money for college. It is your choice—
choose carefully.
Are 529's a Trick or Treat
College financial aid officers across the county must be in a state of euphoria now that
Congress has made the 529 tax exemption permanent. Adding to their joy is the increasing
number of states making contributions to 529 accounts state tax deductible. Sadly, this will
only encourage more unsuspecting families to set up these plans which will take most of
them down a path paved with financial hazards. Ultimately, any family who opens one is
inviting devastating consequences when the financial aid process begins and withdrawals
are taken.
Colleges are likely to count their blessings for every needy student who has a 529. Such
plans make it possible for the school to reduce financial aid awards dollar for dollar thereby
enriching their billion dollar endowment funds.
In the financial aid formulas, students have no asset protection allowance (APA). The sad
result is, each year students lose 20 cents in financial aid for every dollar they have in cash,
checking, savings, UGMA and/or UTMA accts., stocks, bonds, savings bonds, mutual funds,
and the like.
Congress has made the 529 tax exemption permanent. Adding to their joy is the increasing
number of states making contributions to 529 accounts state tax deductible. Sadly, this will
only encourage more unsuspecting families to set up these plans which will take most of
them down a path paved with financial hazards. Ultimately, any family who opens one is
inviting devastating consequences when the financial aid process begins and withdrawals
are taken.
Colleges are likely to count their blessings for every needy student who has a 529. Such
plans make it possible for the school to reduce financial aid awards dollar for dollar thereby
enriching their billion dollar endowment funds.
In the financial aid formulas, students have no asset protection allowance (APA). The sad
result is, each year students lose 20 cents in financial aid for every dollar they have in cash,
checking, savings, UGMA and/or UTMA accts., stocks, bonds, savings bonds, mutual funds,
and the like.
Parents fare better as their assets are assessed at only 5.6% per year over their allowance. A two parent family for example, with an older parent of 48, has
an APA of $45,000, while a single parent of 45, only has $19,700.
It gets even worse for families who are eligible for need-based financial aid. Colleges deem this money a resource and apply the asset assessment. Next,
they reduce some of their own share of the student’s aid, dollar for dollar! The assessment is avoided when the owner of the account is not part of the family
household, i.e. a grandparent, but the college’s aid is still reduced.
Unfortunately, tens of millions of dollars per year are unnecessarily wasted by college families who are unaware of the consequences when setting up 529
Savings Plans. In fact, numerous brokerage firms have been sued and/or suspended for misrepresenting the so-called benefits of 529 accounts.
an APA of $45,000, while a single parent of 45, only has $19,700.
It gets even worse for families who are eligible for need-based financial aid. Colleges deem this money a resource and apply the asset assessment. Next,
they reduce some of their own share of the student’s aid, dollar for dollar! The assessment is avoided when the owner of the account is not part of the family
household, i.e. a grandparent, but the college’s aid is still reduced.
Unfortunately, tens of millions of dollars per year are unnecessarily wasted by college families who are unaware of the consequences when setting up 529
Savings Plans. In fact, numerous brokerage firms have been sued and/or suspended for misrepresenting the so-called benefits of 529 accounts.
Solution
Once a family becomes aware they will qualify for need-based financial aid, and that all of their 529 monies are at risk of being assessed and worse, it is
not too late and very easy to liquidate the account. The owner must contact the company managing their account and indicate they want a “non-qualified”
(taxable) distribution. They will receive a redemption form and their check will follow shortly after the form is submitted.
Of course, liquidation is not without consequence either. All gains are subject not only to a 10% penalty tax, but also the applicable income tax based on the
account owner’s tax bracket. Nonetheless, it is certainly the far lesser evil.
not too late and very easy to liquidate the account. The owner must contact the company managing their account and indicate they want a “non-qualified”
(taxable) distribution. They will receive a redemption form and their check will follow shortly after the form is submitted.
Of course, liquidation is not without consequence either. All gains are subject not only to a 10% penalty tax, but also the applicable income tax based on the
account owner’s tax bracket. Nonetheless, it is certainly the far lesser evil.
Example
A family who invested $40,000 and had a $10,000 gain would receive a check upon liquidation for $50,000. Assuming a 20% tax bracket, the $10,000 gain
is subject to a $1,000 penalty tax, plus a $2,000 income tax. While many families have as much as $100,000 and more, the net result here is $47,000 that
would avoid a maximum of $10,500 ($47,000 x 5.6% x 4) in assessments. If the money were legally repositioned into financial vehicles not included in the
financial aid calculations, some or all of it would still be there at graduation time!
Here are two actual examples of what can be accomplished when assets are legally repositioned:
is subject to a $1,000 penalty tax, plus a $2,000 income tax. While many families have as much as $100,000 and more, the net result here is $47,000 that
would avoid a maximum of $10,500 ($47,000 x 5.6% x 4) in assessments. If the money were legally repositioned into financial vehicles not included in the
financial aid calculations, some or all of it would still be there at graduation time!
Here are two actual examples of what can be accomplished when assets are legally repositioned:
$15,252 Princeton University Tuition
$18,030 Financial Aid Received
$ 2,000 University of Tampa aid eligibility
$28,215 Aid increased after repositioning
$18,030 Financial Aid Received
$ 2,000 University of Tampa aid eligibility
$28,215 Aid increased after repositioning
When confronted with these facts, financial aid officers nationwide have sidestepped and smoke-screened the issue with comments such as,
“Depending upon the value, there will be annual distributions to pay for tuition and fees,” or, “Our calculations may vary from year to year,” and this most
disturbing remark originating from a prestigious New England school, “Financial aid is not the issue here. Paying for the student’s education is.”
Since the majority of American families can no longer afford four years of tuition and related expenses without financial aid, it most certainly is the issue!
Camouflaging this fact is unconscionable, but par for the course when playing the game that today’s college financial aid process has become.
The following illustrates exactly how 529 Savings Plans cause families to lose thousands in financial aid.
In a 2 parent family, let’s assume: an older parent of 44; 1 child, 17; AGI of $68,900; taxes paid $5,500; parent assets of $10,000; asset protection
allowance of $42,100; student assets of $124:
“Depending upon the value, there will be annual distributions to pay for tuition and fees,” or, “Our calculations may vary from year to year,” and this most
disturbing remark originating from a prestigious New England school, “Financial aid is not the issue here. Paying for the student’s education is.”
Since the majority of American families can no longer afford four years of tuition and related expenses without financial aid, it most certainly is the issue!
Camouflaging this fact is unconscionable, but par for the course when playing the game that today’s college financial aid process has become.
The following illustrates exactly how 529 Savings Plans cause families to lose thousands in financial aid.
In a 2 parent family, let’s assume: an older parent of 44; 1 child, 17; AGI of $68,900; taxes paid $5,500; parent assets of $10,000; asset protection
allowance of $42,100; student assets of $124:
Scenario A: $0 in a 529 Savings Plan
1. Cost of Attendance: $ 45,000 (COA = tuition, fees, room & board, books and related expenses)
2. Expected Family Contribution: $ 10,000 (EFC = the minimum the fed. gov’t. determines a family
will pay at any college)
3. Financial Need (FN) $ 35,000 ($45,000 - $10,000)
(FN = the maximum amount of aid a family will qualify for)
4. The student qualifies for the following aid:
(A) $ 3,500 Stafford Loan
(B) $ 4,000 Perkins Loan
(C) $ 2,500 Federal work-study award
(D) $ 3,000 State grants, etc.
(E) $ 2,000 Private scholarship
(F) $20,000 College scholarships, grants, tuition waivers, etc.
(G) $35,000 Total
1. Cost of Attendance: $ 45,000 (COA = tuition, fees, room & board, books and related expenses)
2. Expected Family Contribution: $ 10,000 (EFC = the minimum the fed. gov’t. determines a family
will pay at any college)
3. Financial Need (FN) $ 35,000 ($45,000 - $10,000)
(FN = the maximum amount of aid a family will qualify for)
4. The student qualifies for the following aid:
(A) $ 3,500 Stafford Loan
(B) $ 4,000 Perkins Loan
(C) $ 2,500 Federal work-study award
(D) $ 3,000 State grants, etc.
(E) $ 2,000 Private scholarship
(F) $20,000 College scholarships, grants, tuition waivers, etc.
(G) $35,000 Total
The student will qualify for a maximum of $20,000/yr in financial aid from the college. However, the private scholarship is a bonus for the school, not the
student. It enables them to reduce their aid dollar for dollar, because if (E) were $0, (F) would be $22,000.
student. It enables them to reduce their aid dollar for dollar, because if (E) were $0, (F) would be $22,000.
Scenario B: $50,000 in a 529 Savings Plan
$45,000 COA less $11,000 EFC = $34,000 FN
4. The student qualifies for the following aid:
(A) $ 3,500 Stafford Loan
(B) $ 4,000 Perkins Loan
(C) $ 2,500 Federal work-study award
(D) $ 3,000 State grants, etc.
(E) $21,000 College scholarships, grants, tuition waivers, etc.
(F) $34,000 Total
$45,000 COA less $11,000 EFC = $34,000 FN
4. The student qualifies for the following aid:
(A) $ 3,500 Stafford Loan
(B) $ 4,000 Perkins Loan
(C) $ 2,500 Federal work-study award
(D) $ 3,000 State grants, etc.
(E) $21,000 College scholarships, grants, tuition waivers, etc.
(F) $34,000 Total
With $50,000 in the 529 Savings Plan, the family will most likely take a “qualified” distribution of $12,500/yr for 4 years; $11,000 of which, will pay their EFC.
The college saves and the family will lose $1,500/yr in financial aid for 4 years. The college’s contribution (E), will now be reduced to $19,500
The college saves and the family will lose $1,500/yr in financial aid for 4 years. The college’s contribution (E), will now be reduced to $19,500
Scenario C: $100,000 in a 529 Savings Plan
1. $45,000 COA less $12,800 EFC = $32,200 FN
4. The student qualifies for the following aid:
(A) $ 3,500 Stafford Loan
(B) $ 4,000 Perkins Loan
(C) $ 2,500 Federal work-study award
(D) $ 3,000 State grants, etc.
(E) $19,200 College scholarships, grants, tuition waivers, etc.
(F) $32,200 Total
1. $45,000 COA less $12,800 EFC = $32,200 FN
4. The student qualifies for the following aid:
(A) $ 3,500 Stafford Loan
(B) $ 4,000 Perkins Loan
(C) $ 2,500 Federal work-study award
(D) $ 3,000 State grants, etc.
(E) $19,200 College scholarships, grants, tuition waivers, etc.
(F) $32,200 Total
With $100,000 in the 529 Savings Plan, the family will most likely take a “qualified” distribution of $25,000/yr for 4 years; $12,800 to pay their EFC.
The college will save and the family will lose $12,200/yr in financial aid because $12,200 of the aid the college would have offered was replaced by the 529
distribution. The college’s contribution (E), will be reduced to $7,000.
If the money were in a financial vehicle not included in the financial aid calculations, the EFC would be reduced to $10,000 (Scenario A), and they would
qualify for $22,000/yr for 4 years in financial aid from the college.
The college will save and the family will lose $12,200/yr in financial aid because $12,200 of the aid the college would have offered was replaced by the 529
distribution. The college’s contribution (E), will be reduced to $7,000.
If the money were in a financial vehicle not included in the financial aid calculations, the EFC would be reduced to $10,000 (Scenario A), and they would
qualify for $22,000/yr for 4 years in financial aid from the college.
In the above Scenario C, a family with a modest EFC and a substantial 529 balance will lose the most. The break even point is when 529 annual
distributions equal the EFC, and the account has a zero balance at the end of 4 years – an unlikely occurrence. There are a myriad of scenarios that can
be played out here, but as always, it’s the “neediest” of families who lose the most.
Do not fall for the 529 trick this Halloween or any other time of the year. 529 Savings Plans must be avoided at all costs so they don’t become costly! In
order to win the college funding game, which begins all over again every year, a family must have the most up to date information, precise timing and
persistency. And, families should never lose sight of the fact that all the financial aid in the world is useless without that coveted admission ticket!
distributions equal the EFC, and the account has a zero balance at the end of 4 years – an unlikely occurrence. There are a myriad of scenarios that can
be played out here, but as always, it’s the “neediest” of families who lose the most.
Do not fall for the 529 trick this Halloween or any other time of the year. 529 Savings Plans must be avoided at all costs so they don’t become costly! In
order to win the college funding game, which begins all over again every year, a family must have the most up to date information, precise timing and
persistency. And, families should never lose sight of the fact that all the financial aid in the world is useless without that coveted admission ticket!