Happens all of the time. If the 529 belongs to Ex , he can change the beneficiary and even deplete it. So that’s now a dead end. Up to your kids and their father as to what he is going to pay towards their educations each year if you are not part of the equation anymore in these decisions.
Who takes the kids as dependents for the child and dependent credit can be assigned , and stipulated in the divorce agreement. Who the custodial parent is,— well, that’s determined by who has the child the most per IRS rules and Financial aid forms too.
Given your income levels, your kids are not going to get the PELL grant, and so subsidized and non subsidized direct loans ($5500 first year) is all the federal government is likely to give. Maybe some work study. Those schools that use FAFSA only do not tend to meet full need.
It’s would be wise to run Net Price Calculators (NPC) for some types of schools and see what you may be expected to pay. In a divorce situation, PROFILE schools will hit up the financials of the other parent (and spouse) as well so , it’s difficult to see what sort of aid is possible. Frankly, given the numbers you r given us, i think substantial financial aid is not going to happen. Pricey Private schools are not going to be giving out big aid packages to your kids because they will be expecting you and your Ex to be contributing what I believe will be more than he and his wife will be willing to pay. I think your kids are going to have to pick their schools accordingly. It’s great you have tuition remission benefits, and yes, I too, hope you can keep them.
I’m sorry you and your kids are going through this. It’s sadly typical in divorce and remarriage scenarios. It also happens in intact households as well when one parent does not want to pay what colleges expect from the family. It happens all of the time. Those kids who end up going away to college have parents willing and able to pay what those colleges expect them to pay, except for the few who can get merit scholarships to more than cover the gap.