<p>Stop funding the 529 plan. think of all of the fees and expenses you are paying for each deposit and try to determine when you will recvoer those lost dollars. Also they are very restrictive as far as “qualified education expenses” as determined by the IRS. Also, if you receive any scholarships or federal loans, and you use 529 money for the difference, you could be liable for taxes, penalties and interest, if you exceeded the qualified education expense amounts. Also, you can ge giving up educational tax credits - dollars back in your pocket - if you use 529 money. Unless you get a great state tax break, stay away from them Tax free amy not be tax free after all.</p>
<p>I would refinance the equity loan into a HELOC - home equity line of credit- in case you need to tap this for college down the road - and you are still able to write off the interst on your taxes.</p>
<p>the home equity does not count against you in the fin aid formula UNLESS your student is going to a private school which uses the institutional metholody - CSS Profile- to calculate your expected family contribution.</p>