I have one with 10k in it, and I’m not sure if it’ll be better to use it to pay for my first semester at college and asking my parents to stop putting money in it or have it keep growing?
Do whatever you want. So long as the funds are in a 529 account, they’re treated as a parent asset for purposes of calculating your eligibility for aid, so the existence of a 529 account with only 10k in it shouldn’t have much impact on the financial aid you receive.
529 plans are assessed at a low rate for FAFSA purposes and the distributions from it that you will take to pay for college aren’t income for FAFSA.
Think of this way – if you get leave the 529 plan at $10,000, do you have a realistic plan for paying for the rest of the costs of college? Many people think that all colleges will meet full need for every student and that being low-income with low savings is the best way to go, but that’s not really true – for the majority of people, having college savings is better than not having any money. Only a few schools provide generous need-based aid to people in that situation, and those are generally selective. For the rest, they have the “options” of going to a cheap school that they can afford with current income or borrowing a lot of money.
My school gave me 50k with loans, and we would be paying 14k a year (student plus parent efc), which my parents have told me is a generous and completely manageable package. So I guess from your comments, I’ll ask them to use up the whole 529 plan on the first year so my aid could be a little better next year?
Your $10,000 in your 529’is only assessed at 5.6% of its value. So really it’s not adding that much to your family contribution.
Why not use $2500 a year towards your college costs.
Using it all up is not going to dramatically increase your need based aid.