April 23, 2025 - 04:15
529 assets can impact college financial aid packages, but there are nuances. Families often turn to 529 plans as a tax-advantaged way to save for their children's education. However, it is essential to understand how these savings can influence the financial aid process.
When assessing a student's financial need, colleges consider both income and assets. The assets held in a 529 plan are typically counted as parental assets, which are treated more favorably than student assets in the financial aid calculation. This means that having money in a 529 plan may reduce the amount of need-based financial aid a student is eligible to receive, but the impact can vary based on the overall financial situation of the family.
Additionally, the type of 529 plan and its ownership can also affect financial aid eligibility. It is crucial for families to plan strategically and consider how their savings will be viewed in the context of financial aid applications. Understanding these factors can help families make informed decisions about saving for college while maximizing available financial aid.
