My son is a senior and is beginning to submit his college applications. To any parents that have been here already - I have a few questions…
Do colleges provide the amount of the tuition you’re responsible for when they send out the acceptance? They’ll already have the CSS profile by then.
When you accept admission do you immediately pay a down payment?
When do they expect payment for the semester? August?
If I’m using a 529 plan am I able to send funds directly from the 529 account to the college?
Are there any significant penalties if you make a mistake like sending the 529 funds to your checking account for example?
If I’ll be using a loan down the road after the 529 is exhausted, like a Parent Plus loan for example, when do you apply for those? Right after the prior semester ends?
For a large number of colleges you can send funds from 529 electronically to the college. In other cases you can send funds by mail directly from 529 to the college.
Do colleges provide the amount of the tuition you’re responsible for when they send out the acceptance? They’ll already have the CSS profile by then.
your financial aid award will come shortly after your acceptance in most cases. The exception is early action where some schools just send those awards at the same time as regular decision ones. And regarding tuition…sometimes the costs for the upcoming year aren’t set until summer. So you might not know your exact net costs…
When you accept admission do you immediately pay a down payment?
once you make a matriculation decision, you will be asked to pay an enrollment deposit. Nothing is expected of you before that.
When do they expect payment for the semester? August?
this varies by college. We typically got our bills to be paid by early august for the first term
If I’m using a 529 plan am I able to send funds directly from the 529 account to the college?
you will need to check your plan, but usually, yes.
Are there any significant penalties if you make a mistake like sending the 529 funds to your checking account for example?
no…as long as you then use the money for the college costs.
If I’ll be using a loan down the road after the 529 is exhausted, like a Parent Plus loan for example, when do you apply for those? Right after the prior semester ends?
I believe you apply for Plus Loans during the summer prior to the start of the fall term. Someone else will need to clarify…because we never used a Plus loan.
You will apply for a Parent Plus loan at the time you need it. For example, if you will need it to pay tuition for fall of senior year, you would apply for the loan before the tuition bill is due (apply after July 1, typically). Keep in mind that you have to fill out a FAFSA before you can borrow a Plus loan. So the FAFSA has to be on file, then you will read the school financial aid website to find out how to apply for the Plus loan (or contact them to find out). You should have your child borrow the maximum they can borrow before taking out the Plus loan - the interest rate and origination fees are lower for the student loans, so even if you plan to pay all loans, be sure to take advantage of student loans first.
To avoid getting taxed on the earnings portion of a 529 distribution sent to your checking account (and maybe also incurring a 10% penalty), make sure the funds are used to pay for 529 qualified expenses in the same tax year the distribution was made.