Order of using sources for paying for college

For my son’s first year of college, we will be full-pay. We did not apply for aid because every school’s NPC was clear that we would receive no aid.

Our son has sent an enrollment deposit to a private college to which he has been admitted ED. We are anticipating four years of college followed by three or four years of some type of graduate school (PhD program or law school seem the most likely routes).

I am wondering the best order in which to use our resources. For example, is there an order that might enable us to get some financial aid in the last year of college, by which time our resources will be much diminished?

We have a 529 account.
One set of grandparents has a 529 account.
Another set of grandparents will be making a smaller contribution- maybe $20,000?
We have savings.
It seems like all of the above will cover four years of college, but by graduate school, it will be harder.
We have set up a home equity line of credit just in case we need it someday.

Thanks for any advice.

Since you aren’t applying for FA, I’m not sure it matters all that much when you use the grandparents’ money.

Assuming your son starts in the fall and finishes the undergraduate degree in eight straight semesters, if possible wait until spring semester of sophomore year before using any money from the grandparents. This will keep that money off of any undergraduate FA documents, where it would otherwise need to be reported as untaxed income for your son. If he starts graduate school immediately after getting the undergrad degree, it may be factor there.

OP mentions the possibility of getting need-based aid in the last year. Delaying the use of grandparent money could definitely be a factor.

PhD programs worth attending should be funded (tuition waiver and living expense stipend), so there should be no or minimal additional parental funding needed.

Law school will typically be very expensive.

Well, we received our first tuition bill today. Gulp.

We are a full pay family this year who did not submit a FAFSA/ CSS profile this year but intend to do so next year.

Based on your (posters’) advice, my husband’s additional readings, and his chat with the college about how to make 529 payments, we decided to pay the first bill using our son’s personal bank account and part of our 529 savings.

The most important thing seemed to be for our son to use up his own money first, since, for financial aid purposes, they would expect him to contribute 20% of his savings, whereas we are expected to contribute less than 6% of our assets. So we need to decrease his savings before we decrease ours.

Then we used some money from our 529 for the remainder. 529 vs. our bank account did not seem to matter in terms of future aid (both are assets), and we figured the money in the bank was useful in case the roof springs a leak or something!

We are saving the grandparents’ 529 for senior year. Their money is not reported for the financial aid forms, UNLESS we use it before filing, in which case it will count as a gift to him and count as income, messing up the chances for aid. Therefore, it is best for them to reduce our burden after we have received some aid.

Just sharing this in case anyone else is working on the same set of decisions!

With prior-prior year reporting for financial aid, you only need to wait until spring of sophomore year to use the money from the grandparent 529 and not have it impact undergraduate financial aid, assuming your son stays on track to graduate after the normal four academic years.


Foe grad/law school rarely is need based aid given. Usually merit scholarships and loans.

Need based aid is available at all of the T-14.Other Than HYS, which only offers need based aid, merit $ is available at the rest of them. However parents income and assets are still required. If you are not eligible for need based aid now, it is unlikely that you will be eligible for need based aid in law school.