529's - 6% or even over 4 yrs.

<p>How do schools use the amount in a 529? It is definitely not enough to pay our share, but wanted to know do they divide it by 4 the first year, etc or do they use the typical 6% of parents assets? Just trying to see how 2nd yr. college fin aid may be calculated.</p>

<p>Most colleges treat 529s owned by the parent (with the child as the beneficiary) as a parent asset. That means they assess 6% per year. As the balance declines, that 6% number would shrink.</p>

<p>The 529 assets held for other children also need to be reported on financial aid forms under parent assets.</p>

<p>…would you know when the college measures the parent contribution; how much is from income vs. assets? Now that we used alot of the 529, 6percent of it will be less.</p>

<p>This worksheet tells you exactly how you can calculate your EFC for FAFSA:<br>
<a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf&lt;/a&gt;&lt;/p&gt;

<p>In general, income is weighted much more heavily than assets in the EFC formula. EFC is your total adjusted gross income minus: allowances for taxes, an income protection allowance based on the number of people in the household and the number of those in college, and an employment allowance. After all the allowances are subtracted out, the income portion of the EFC is around $7,926 + 47% of adjusted available income over $29,300. The asset portion is calculated by taking total non-retirement assets, subtracting out an asset protection allowance based on the age of the older parent, and multiplying the remaining assets by 5.6%. Student contributions follow a similar calculation although there’s no asset protection allowance, and student assets are multiplied by 20% rather than 5.6%.</p>

<p>…my student doesn’t have any assets so that part is easy.</p>