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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]

ITA - My opinion (not a financial advisor, so take it at face value) 529 is another way for the government to take away financial aid from students. .[/quote]

That's how I feel.  Take away financial aid from students, and also allow these financial companies to make even more money off consumers.
[/quote]

529s cannot be counted against financial aid. And some funds are managed by cheapskate firms like Vanguard or TIAA-CREF, so they're a thrifty way to invest if you're doing it directly.

However, if you invest in equities, as I did, the sock under the bed plan looks pretty good right now. My financial statements might as well be photos of pitchers of warm spit.

Oh, and supposedly I will have $1.3 million saved at retirement. As another one with parents in a continuing care facility, I hope that's enough. [/quote]

You should always read the fine print:

"Example

Here is a simplified example of how this all works:

You file the FAFSA aid application when your child is a senior in high school. Let's say you have a 529 savings account with $20,000 in it, of which $10,000 represents your original contribution and $10,000 is earnings.

Year 1: Your child's eligibility for federal financial aid this year will decrease by no more than 5.64% of the account value, or $1,128 ($20,000 x 5.64%). Assume there is no further appreciation in the account and you withdraw $5,000 in the fall to pay for the first semester college bills.

Year 2: You have $15,000 left in the account when your child applies for aid for sophomore year, and it will again be assessed up to 5.64% of the account value or $846 ($15,000 x 5.64%). The $5,000 withdrawal brought $2,500 of excluded earnings with it, but as indicated above, none of the withdrawal is counted as financial aid income.

The federal aid formula is more complicated than what is described here, but this gives you a general idea of how to calculate impact.
Be Prepared!

Sound complicated? It is. And we are only talking about the federal financial aid rules here -- [b]each school can (and most will) set its own rules when handing out its own need-based scholarships, and many schools are starting to adjust awards when they discover 529 accounts in the family. [/b]Also consider that the federal financial aid rules are subject to frequent change. Finally, remember that most financial aid comes in the form of loans, not grants, and so you end up paying it back anyway."

Trust me, I've been through the ringer. They take away need-based financial aid if you have a college savings plan.[/quote]

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