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Hopefully, with the right formatting this time :-)

...why do you think it makes more sense for your kids to spend more on their education ...

I have no idea how you reached that conclusion.

You said you had hoped they get more in financial aid. Typically, the only way that more aid comes to a student is through more loans, and loans require that the principal plus the interest be paid back. In addition, if the loans are unsubsidized, then the interest accrues from Day 1, so that could be for the whole 4 years before anything starts to get paid back. Hence, if the kids get more aid in the form of loans, then they have to pay it back, with interest, and adding interest means you're spending more.

LOL. Just because the money is in their name, doesn't mean they put it there. We did, to supposedly take advantage of the tax benefit. We would have been better off saving the money in our own names, and if I had it to do over again, would have saved the money without putting it in a UTMA, 529 or Coverdel. I'm not saying don't save, just be aware of what the difference can be with FAFSA if you save in the kids' name vs your own.

It is irrelevant how the kids got the money. The fact is that it belongs to them, and they actually get to spend it however they want, so they could choose to blow it on a fancy sports car, fritter it away on small things, or save it to spend on college. If they do go to college, I do not find it at all unreasonable for the college to expect the child to spend that money on their own education.

I do absolutely agree about knowing the implications of your savings plan, and I especially think people need to remember that any money given to the child in a UTMA belongs to them, regardless of if they choose to go to college or not.
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