<p>Did I make the wrong choice? For my daugthers school this year, I had her sign a loan for 7100 for the year but she has 11,000 in her 529 plan. What do you think? I can un do the loan if I move fast and have the 529 pay the 7100. Or should I leave it like it is?</p>
<p>Moving this to the FA & Scholarships forum.</p>
<p>I’m not an expert, but it seems like taking the money out of the 529 first is better than taking a loan because the 529 counts as assets for FA calculations, but loans are not taken into account.</p>
<p>Wait and see what other members say.</p>
<p>In financing our children’s college, we looked at estimated cost after merit and need based aid. We applied 25% per year of their savings and 529 accounts, added what we were able to contribute per year and they took small yearly loans for the balance. Would you be able to replace some of the $7,100 in the 529 for other years?</p>
<p>What is the loan? Direct Loans? Sub or Unsub? Private Loans?</p>
<p>In general, you can return the Federal Loans. I don’t know about private loan.</p>
<p>My D also took out an unsub Direct Loan while she has $ in her 529 Savings Plan. </p>
<p>1) I want her to have some “skins in the game.”
2) She could use the 529 $ for her graduate school.</p>
<p>I would leave it and bank the loan money. If she got any scholarships this year, you can withdraw the same amount of the scholarship in the year it was awarded from the 529 plan without penalty. Do that and bank the money as well (put it in your own retirement funds or whatever) if you don’t need the money. We will have the kids take out whatever federal loan they are awarded freshman year, bank those funds to use later on. We believe strongly that the kids should have at least one loan in college to help establish a credit rating when they get out. With the funds banked, paying it off isn’t an issue. We have them pay for a year or two then pay off completely if necessary.</p>
<p>SteveMA:</p>
<p>Are you suggesting take the loan and also withdraw 529 money too?</p>