Second Home and 529 Plan......

twoinanddone
Sat, 08 Aug 2015 20:27:19 +0000

Okay, for your ‘regular’ college that doesn’t meet full financial need, it is unlikely you’ll get any need based aid with any one of those figures - income of $140k, assets of over $100k (1/3 of the home, any savings accounts? ) 529 account of over $100k? Just assuming the school uses the same method as Federal (FAFSA), you’ll qualify for loans and little else.

At some of the more elite schools, if you just had your income and the 529 accounts, you might get some money in institutional aid. If the school costs $70k, maybe you’ll get $10-20k? Is that going to be enough for you to afford those schools?

There is a big difference between trying to position yourself for the ‘most’ financial aid if you make about $50k per year and just need to rearrange things to get the need based aid you need and deserve, and trying to move all assets to appear low enough to get aid. Yes, if you really don’t own 1/3 of the house but your parents are just transferring it so that it can pass upon death more easily, it would be smart not to have that asset as yours in name only. However, it looks like you are solidly in the ‘we make too much for need based aid but not enough to write a check for $60k/per kid/per year’ with or without the 1/3 house.

If your kids don’t overlap in college years, you could move the 529 for the younger one to the grandparents, and it then wouldn’t be considered an asset while the older one is in college. I don’t think in the long run it will help all that much because you’ll still have the same income and 1/2 the 529 accounts (older child’s).

What to do? Focus on merit aid schools or specialty scholarships (military, athletic, science). Choose schools wisely based on their price. Find some hidden gems.