Financial Aid
A lot of parents worry that a 529 will sabotage their hopes for financial aid. If you fall into that category, go ahead and worry about something else. Parents will have to report 529 assets on their federal financial aid forms if they are the account owners of the 529 plans, but the money should have little or no effect on their aid qualification.
If a parent is the primary owner of a 529 account, the 529 account assets are assessed for financial aid purposes at a maximum rate of 5.64%. Here’s what that means: For every $10,000 a family has tucked inside a 529 plan, need-based aid would be reduced by $564. That would still leave you with $9,436 more than if you had saved nothing.
Actually, most parents won’t see any reduction ...
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