<p>I spent a couple of hours yesterday running the net price calculators on the websites of a handful of schools. There was no place to indicate the value of a 529. There were questions about student assets, parent assets, sibling assets held by parents, trusts for which the student in the beneficiary, etc., but no specific questions about 529s. Does anyone know how this works? </p>
<p>I realize the net price calculator is just for providing an estimate, but it's all we have as we discuss the pros and cons of applying Early Decision.</p>
<p>There was some variety in the calculators -- some wanting to know the value of the family home (and mortgage), others asking about academic performance. Interestingly, the results were fairly uniform at three private schools (think top 25 universities) and one highly ranked state school.</p>
<p>In my experience, the 529 is considered a parents’ asset, not the child’s (even though they may be the beneficiary) because the parents can change the beneficiary to themselves if they wish (as long as the money is used for education). That is a benefit to the parents in determining EFC, etc.</p>
<p>If the 529 is in your name then it should be reported as a parent asset. If it is in your child’s name then it should be reported as a student asset.</p>
<p>The calculators can vary in questions because the schools vary how the calculate aid. For the calculators that ask about academic performance, they are likely trying to determine the amount of merit aid could be awarded. </p>
<p>Your results are similar to what I found a year ago when my second was applying to school. The NPCs had some significant difference in the questions they asked, but the resultant aid predicted was fairly similar and relatively close to the actual aid offered. I assume that the accuracy is dependent on accurate responses to the questions as will as the simplicity of our families finances (e.g. no business, only one home, no unusual assets).</p>
<p>I have found that some calculators ask for the “parent’s investments” and if you look at the help section that is where they want you to put in the value of 529’s, or other college savings accounts.</p>
<p>It is my very uninformed and extremely preliminary opinion that all of the type of schools that you mention will always all cost about the same.</p>
<p>I am also of the opinion that this might not be entirely by accident.</p>
<p>The data set by which I’ve come to this conclusion is exceedingly lean and the hypothesis expressed is strictly my own.</p>
<p>I also thought that the 529 was a parent asset. However, I recently learned that if one were to contribute more than something like $26,000 in one year, it triggers the gift tax, and counts as a gift to the student. That is probably more than most people contribute. But the point is, there seems to be a gray area here, but see the link above from dodgersmom on how it counts. It seems to always count as a parent asset regardless of whose name it is in.</p>
<p>The only situation where I believe that a 529 could be considered a student’s asset would be where money was given to the student and then invested in a 529 plan. In the vast majority of cases, the parents (or grandparents) fund the 529 plan and they are the owners of the plan. (There are sometimes tax benefits to funding a 529 plan which would be of no value to the student.) The student may be named as a beneficiary of the plan, but has no right to the money in the plan. The owner of the plan could simply decide that grandson is not worth sending to college and change the beneficiary to granddaughter. If the money came as the result of a Uniform Gift to Minor transaction, then the 529 would be the students, not the parents.</p>
<p>Edited -</p>
<p>Now that I’ve read the link, it appears that, at least currently, any 529 is going to be the parents (as long as the student is filing as dependant).</p>
<p>Any person can give any other person $13K without triggering a gift tax. Therefore, two parents can give each child $13K ($26K Total per child). Without looking it up, I believe that a gift for educational purposes is not limited. The good news is that it reduces your estate, the bad news is that the money belongs to the kid at age 18 (or perhaps 21) and if he/she wants to buy a motorcycle, the only penalty will be that any income of the 529 gift may be taxable and there is, I believe, a 10% penalty (like an early withdrawal from an IRA). There is also nothing to say that FAFSA or the IRS won’t change the rules next year and the kid could take a hit on FAFSA.</p>
<p>Hat – Thanks for the explanation re: $26K. </p>
<p>If you read the link I posted, 529 deposits are subject to the gift tax, and I believe that is the case even if they are accounts owned by the parents but for a beneficiary other than themselves (i.e. a child) This is not money that the child automatically gets at age 18 if it is in an account owned by the parent. </p>
<p>Granted, $26K is a large amount of money – a monthly deposit of over $2000 per child – but it is not a lot compared to a year’s private school tuition!</p>