It’s time to talk about 529s
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 |
|
Parents |
Students |
---|---|---|
Income |
22% to 47% of available income1 |
50% of adjusted gross income over $6,8402 |
Assets |
0% to 5.64% of assets3
|
20% of assets held in student’s name4
|
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)