<p>How exactly does a 529 account work?</p>
<p>If I go to school during the 2013 year and receive scholarships that will go over my estimated cost of attendance, will I be able to move the rest of my aid over to a 529 account for future years such as law school? </p>
<p>Thanks in advance</p>
<p>Yes, 529 funds in your current program can be used for grad/professional school. They can also be transferred to another family member including a sibling or child.</p>
<p>Here are some links:</p>
<p>[An</a> Introduction to 529 Plans](<a href=“http://www.sec.gov/investor/pubs/intro529.htm]An”>SEC.gov | An Introduction to 529 Plans)</p>
<p>[529</a> Plans: Questions and Answers](<a href=“http://www.irs.gov/uac/529-Plans:-Questions-and-Answers]529”>http://www.irs.gov/uac/529-Plans:-Questions-and-Answers)</p>
<p>[FinAid</a> | Saving for College | Section 529 Plans](<a href=“Your Guide for College Financial Aid - Finaid”>Section 529 Plans - Finaid)</p>
<p>Thanks, will they at all effect my need based grants that have been award though?</p>
<p>There’s no real relationship between excess funds due to scholarships covering more than the COA and your 529. Just think of a 529 being a place to store money that you intend to use for college. The money grows tax-free, and has a favorable assessment when reported on FAFSA as compared to other student savings. If you have extra money and want to invest it, you can open a 529 and add the money. It doesn’t matter where the money came from originally.</p>
<p>Edit to add that money in a 529 is reported on FAFSA the following year. So if you open a 529 this year, it won’t have any effect on your current award.</p>
<p>Oh I understand now. Thanks!</p>
<p>Federally subsidized loans are no longer available for grad and professional school (some unsubsidized federal loans remain available). Therefore, if you can afford it, it is best to try to save some of your 529 money for grad school, and use federally subsidized loans for your undergrad years. The feds will also continue to subsidize your undergrad loans while you are a full-time grad student.</p>