<p>Trying another strategy: our oldest child will be a senior in college in the fall. We have not used her 529 account at all. If we withdraw those funds for her for this last year in college will that affect any of her own eligibility down the road for graduate school? Is it true that for earlier years the amount is counted as student income for the following year? We have 2 more children so we would just transfer the account to one of them. Thanks for the expert advice!</p>
<p>Bumping for ya as we have the same issue...Anyone???</p>
<p>If I remember correctly, you can keep $ in account until 29, reassign the beneficiary to another sibling, or use $ for post grad studies. </p>
<p>we personally don't keep $ in 529 for more than a week. And son has no siblings. </p>
<p>You need to make quick phone call to your 529 provider or see any 529 website. 529 is a federal tax program so it applies to all states.</p>
<p>itstoomuch --</p>
<p>The question isn't so much the tax advantage to the 529, but the implications for financial aid/grants by using these funds for a senior headed to grad school. Any additional thoughts?</p>
<p>The 529 monies have or should have been reported in the fafsa and/or school's fin aid program. If you use 529 to pay son's (generically) expenses, then next year you will show less assets. If you transfer the beneficiary status to your other children, you will still show the same assets. The money in 529 is shown as the asset of the owner, not beneficiary.</p>
<p>If you are the owner of plan and son is beneficiary: You cash plan and give $ to son- You will bear the tax consequences, if any. It is immaterial what you do with the money at this stage. If you cash or have money from plan be used for college expenses, no problem. If you change beneficiary from son to another child-relative, no problem. </p>
<p>If son is the owner and son is the beneficiary: He cashes the plan and uses the money for other than education-then he bears the tax consequences, if any. If he uses the money for college, no problem. </p>
<p>I am not quite clear what is the question. Hypothesizing: If you are asking if because you have money in a 529, will that affect his grad admission? - I would guess, No. But if the school needs the tuition $, and you/he has the money for tuition, then maybe, Yes. If the school needs TA's, No. </p>
<p>Please review your state's literature 529 program. I am only familiar with my state's 529 and tax program.</p>
<p>I think I am beginning to understand your question. You are essentially asking that because you still have college funds, will that $ affect D's ability to get some sort of direct gradschool aid? </p>
<p>Go ask Sybbie714, Emeraldkity4, or Jamimom They may know your answer. Good question. I have a son who is a senior a looking for grad school.</p>
<p>itstoomuch: Thanks for the information. I do need to pull out the 529 plan. As I recall I am the owner and the student is the beneficiary so on the FAFSA I included it as parent assests. I think if the student is the owner and beneficiary then there is line on the FAFSA to show that 529 money was available to the student and was used. The idea being it's not treated as a student asset until it's actually used? I'll be checking this out in the next few days.</p>
<p>I quickly pulled out the 529 folder and found that I am indeed the owner. Seems pretty easy to make a qualified withdrawal; downloaded the form from the site. They give choices to send the money to you or to the school but didn't seem to want any proof of it being a qualified withdrawal if you chose the former. When you say you only keep the money in the 529 account for a week I assume you mean you deposit the money the last week in December and withdraw it the first week in January in order to get the state tax deduction? Sounds like a good move.</p>
<p>Yep. We've deposited in Dec and withdrew in Jan. This year we've deposited in march and withdrew 10 days later. And for 2006, we will deposit in Jan and withdraw in time for tuition payment. </p>
<p>Son is a senior at CMU >></p>
<p>In 2000 and 2001 we've seen our son's MF's plummet far below what he needed for 4 years of a high price college and we had invested in a multitude of funds and risk profiles. We now pay a much closer attention to risk horizons and therefore place a good portion of $ into MMkts, even though the money will not be needed for up to a year from now. </p>
<p>I find mutual funds for a bit risky especially when you have a short time horizon and are not dollar cost averaging. I still believe in MF but watch the economy, business, political media more closely.</p>
<p>There's no age limit on using 529 money, so you can avoid paying the penalty if you keep the money in the account in case she decides to college later, or switch the beneficiary to pay for her husband's college, your grandchild's college, or even your wife's education if she wanted to return to school. Other approved transfers include:</p>
<p>Child or stepchild</p>
<p>Brother, sister, step-brother or step-sister</p>
<p>Father or mother, step-father or step-mother</p>
<p>Niece or nephew</p>
<p>Aunt or uncle</p>
<p>Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, sister-in-law</p>
<p>The beneficiary's spouse or the spouse of any of the people listed above</p>
<p>First cousin</p>