It’s time to talk about 529s

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You work hard to create a holistic financial plan for your clients, so if you haven’t talked to them about the benefits of a 529 plan, we can help. October kicks off the financial aid season when the Free Application for Federal Student Aid (FAFSA®) form becomes available to applicants. Many investors think that saving too much for college means they won’t qualify for financial aid. But that’s not true.

Most financial aid comes down to need

Financial need is determined by:
  School’s cost of attendance
Expected family contribution
= Financial need






22% to 47% of available income1

50% of adjusted gross income over $6,8402


0% to 5.64% of assets3

  • Mutual Funds

  • Securities

  • Bank accounts, CDs

  • 529 savings plans when parent or dependent student is account owner

20% of assets held in student’s name4

  • UGMA/UTMA accounts not held in 529 plan

  • Minor trusts not held in 529 plan

  • Savings bonds (in student’s name)

When determining expected family contribution (EFC), financial aid offices weigh parental and student income more heavily than assets. And student assets are weighed more heavily than parental assets.

College savings and financial aid: The formula for having both (pdf)