If I recall correctly, USC asked us to indicate which funds were for which sibling.
Also if your kids will overlap in school at all, you can ask css profile schools if they will consider multiple siblings in school as an expense. FAFSA schools can no longer do that but no one knows what the profile schools will do.
And…when a kid turns 18 you can transfer ownership of their 529 to them if you want . I think in that instance it won’t count against their siblings’ aid. But that would only be helpful if you have multiple in college at the same time.
But remember, if you transfer ownership to your college age student, the money becomes theirs and they can do with it as they please. Including withdrawing the funds and not using the money for college costs.
Honestly, I think there are better ways to manage college costs than by jockeying 529 accounts around.
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FAFSA schools will be able to distribute institutional aid considering number of siblings in college, if that’s what they want to do. The siblings in college question will still be on the simplified FAFSA.
It’s the SAI/Federal financial aid formula that will no longer take number of siblings in college into account.
That’s a great point. Thanks for clarifying!
Just adding…this doesn’t mean the college will provide more need based aid. It just means that they can consider this…if they choose to.
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We are in a similar spot to OP’s in terms of trying to stretch pretty healthy balances in our two kids 529 plans as far as possible. Wondering if naming a parent as beneficiary on the account might make any difference in how schools view your ability to pay for college.
The accounts are treated as parental assets, no different than other parental assets.
That makes sense, thank you.
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If you have money and that doesn’t mean it’s liquid, schools expect you to use it. It’s an investment in the future.
The easiest way around this is simply attending schools you can afford. There’s a zillion inexpensive ones or pricey ones that are inexpensive (relative to what that means to each person) - and you get that affordable price based on student achievement - ie merit.
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One CSS Profile “loophole” to be aware of in special circumstances: a dependent child over age 18 who owns a 529 account themselves (not a beneficiary of a parental account) has those assets treated as if they were parental-owned. Again, this is not s usual circumstance, but was a key realization for us in a special circumstance involving the death of a parent and distribution of funds from an estate to a trust.
Are there any distinctions or differences in how each of the need blind/need aware/meet full need schools treat the savings in 529 accounts?
You’d have to check with each as they (most) use CSS.
You can start with net price calculators.
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Pretty sure they all treat them as parent assets, so you can expect that 5.6% of the balance of your 529 assets will be expected as a contribution – ie, if you have 100k in 529 plans, then you will get $5,600 less aid each year because of that.
I also recall that USC asked how much of the 529 plans was for siblings vs. how much was available for the applicant. I don’t know what they did with that information, but they asked.
As was noted above, it appears that all 529s are counted as parent assets, even when the student is the beneficiary or, more rarely, when the student owns the account. This is to the student’s benefit, as student assets are assessed much more harshly for financial aid purposes (20% assessment for a student asset vs 5.6% for a parent asset).
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I guess it depends on how much they have. But if it is their own names when they apply to college, it will be assessed at 20% per year, which is going to “cost” the family a lot more.
This is all presuming that your family qualifies for need-based aid at all. If you don’t, then this is all a moot point.
Edited to add – didn’t you start a thread a few weeks ago where you indicated that your family was not going to qualify for need-based aid? Have you run NPCs on a few schools to see if your assumptions were correct?
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Here’s a plus, my kids didn’t face rejections from reach schools, because there wasn’t a reason to apply to them. One was accepted to 20 colleges (HS class of 2021 so not many college visits).
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For anyone with a kid going into senior year who is worried about the purchasing power of their 529 (or any other assets earmarked for college payments) CHECK THOSE STATEMENTS. This is not the time to be chasing yield, not the time to pray for an uptick in the market. You would not believe the number of people I know IRL who kinda/sorta knew what their asset allocation was (this is not hard to check) until they found it wasn’t.
Markets go up and down. Interest rates go up and down. If you will be paying a tuition bill next August (that’s in 14 months folks) now is not the time to hope you can “recoup” a loss (a paper loss no doubt) or to chase an extra percentage point in yield.
The best way to approach financing college is to know down to the nickel what you have and understand your family’s finances in such a granular way that when your spouse says “Surely we can come up with an extra thousand bucks a month to make Junior’s dreams come true” you can point to your grocery bill, gas for the car, or your health insurance premium and say “which one do you want to go without?”
There are people- smart people, people with responsible jobs-- who assume “we could come up with the money IF” and then they wave their hands around. Sure- if your lifestyle includes a country club membership (and your spouse is on board) and Christmas in Aspen (and the family is on board) and takeout three nights a week because nobody wants to be bothered making dinner, and an extra car for the teenagers which guzzles gas and costs a fortune to insure (and your other kids are ok with getting rid of it) and private tennis lessons because the pros are so much better than the guy at the YMCA… then yeah, maybe you’ve got where to cut. But frankly, if it were so easy to come up with 12K a year in “non consumption” you’d have probably done it already.
Don’t go into senior year blind. And be honest with yourself- if you had a banner year last year (highest commission you’ve ever earned, or biggest bonus you’ve ever achieved) and you’ve been phoning it in all year (it’s already June, remember?) then don’t count on your December/January surprise repeating itself.
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Please feel free to start your own thread. You can’t take over someone else’s though.
How a Profile school treats a student-owned/custodial 529 account is school dependent. Some will treat it as a parent asset, same as FAFSA, and some will treat it as a student asset. You will need to contact the FA office at each school to find out.
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529s are entered into a specific spot in the CSS Profile as a parental asset based on specific instructions, so my understanding is that it is not discretionary by school.
Relevant to this thread though:
“A custodial 529 account is not reported as a parent asset on the FAFSA of the beneficiary’s sibling, providing a way to partially shelter the assets and reduce the impact on financial aid eligibility.”