My father informed us recently that he wanted to contribute to all of his grandchildren's education to the tune of $50K per child. Our children are 17,15,13,10. He was advised to set up 529 college funds by his financial advisor, depositing up to 11K per year in those accounts. His intent was to make up the bulk of the difference between the EFC and the reality of our ability to pay. Our EFC is around 27K. If S takes out 5K per year in loans, we can swing 6-7 out of savings.
The problem is that my dad is ill. He has congestive heart failure, and has had two mild strokes in the past year. Although we're praying that he has many years left with us, there is a real possibility that he may not. If he passes away, the 529 goes to the beneficiary (the children) in their names, and would be included at a high rate in their financial aid calculations.
The other option would be for him to set up trust funds for each child claimable at age 22, and have them take student loans out during college. They could then repay the loans from the trust fund after graduation. The trusts wouldn't have the same tax advantage as the 529, but would not be considered assets by FAFSA in the EFC. In the case of the older kids, the growth of the 529 funds would be minimal anyway.
Right now, we're leaning toward the trust funds. Is there anyone here who would have some knowledge about them, since I'm in unchartered territory with all this. Thanks in advance for any information -Chris