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Does investing in a 529 plan impact financial aid eligibility?
While each educational institution may treat assets held in a 529 account differently, investing in a 529 plan will generally impact a student’s eligibility to receive need-based financial aid for college. You may also need to consider how having money in your 529 account for future qualified higher education expenses might affect financial aid for your student’s elementary or secondary school tuition. For many families, the larger part of a financial aid package may be in loans. So, the more you can save for school, the less debt you or your student may have to incur.
Where can I find more information?
Offering Circulars for 529 Plans. You can find out more about a particular 529 plan by reading its offering circular. The National Association of State Treasurers created the College Savings Plan Network, which provides links to most 529 plan websites.
529 Expense Analyzer. 529 education savings plans have fees and expenses that can vary widely from plan to plan. The Financial Industry Regulatory Authority (FINRA) has developed a tool to help you compare how these fees and expenses can reduce returns.
Underlying Mutual Funds or Exchange-Traded Funds. Additional information about a mutual fund or ETF that is an investment option in an education savings plan is available in its prospectus, statement of additional information, and semiannual and annual shareholder reports. You can obtain these documents from the plan manager for no charge. You can also review these documents on the SEC’s EDGAR database.
Fees and Expenses. You can read about the impact fees and expenses have on your investment portfolios in the SEC’s Office of Investor Education and Advocacy’s Investor Bulletin: How Fees and Expenses Affect Your Investment Portfolio.
