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Financial Planning / Paying For College


Subject:  Re: 529 vs. Education IRA Date:  1/19/2002  8:03 AM
Author:  reallyalldone Number:  4706 of 8558

I've already looked at, but that whole Web-site seems to be biased towards 529 plans. Am I the only one who thinks this is out of whack?

Probably. The limits on Ed IRAs/Coverdell account changed 3 weeks ago. Prior to that 529s were the better choice of the 2 for many, many people. Joe Hurley started the Saving for College site a number of years ago. 529s are his business and I feel fortunate that he has chosen to share so much of his work for free.

2) Somehow, 529 plans aren't considered assets of the student going to school and this doesn't count against them for financial aid.

How 529s will continue to be treated is anyone's guess - financial aid organizations and legislative organizations have struggled with this and will probably continue to do so.

My question now is which one do I invest in? Is $58k of assets enough to be denied financial aid/student loans? By my projections, in 18 years, a state college education will run about $120k, minimum. I kinda think that the laws will change in order to help out more families trying to get their kids an education.

No one can tell you. You need to know what you have and what you expect to have when your child starts college. You also need to decide what you will be willing to pay for when your child goes to college. The financial aid calculations can and do change as have the packaging philsophies, the total amount of dollars available for aid and the number of students competing for the aid. Currently, the majority of need-based aid is loans. Currently, there are been increases in the amount of money available for merit. The rest is in someone's crystal ball.

If you want to decrease your cost for a state institution, contact your state legislature and encourage them to increase funding to the colleges or state-funded financial aid. It's one way you can have input.


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