<p>101mutts - In addition to looking into the 529, you’ll want to e-mail the Financial Aid offices at the colleges you’re considering and ask how they treat UGMA funds that were contributed by your parents. UGMAs are typically treated as student assets and assessed at the 25% per year rate, but some schools will allow the portion of the UGMA assets that were contributed by the parents to be assessed at the 5.6% parent rate. I know that Cornell, Macalester, Williams and perhaps Notre Dame will do this. Harvard and Vanderbilt treat UGMAs the same as parental assets regardless; Princeton may as well. It’s worth asking about.</p>
<p>This isn’t just a matter of the student having to pay more because s/he has more. It’s a matter of the parents’ funds being tapped at a rate 5X the norm due to an innocent clerical oversight in placing the account under the student’s name.</p>