Opening a bank account in your child’s name may seem like an American tradition, but those UGMA/UTMA accounts can hurt your financial-aid packages – and taking money out of your retirement account may be even worse!
Good news – ScholarShare 529 is one of the most financial-aid friendly ways to save!
ScholarShare 529 has a minimal impact on aid—no more than 5.64% of the account balance each year
A custodial account under UGMA/UTMA will be counted as astudent asset and can reduce the aid package by 20% of its value each year.2
Tap into your IRA and it can lower aid by as much as 50% of the amount withdrawn each year.3
2For accounts held by parents of students. 3Impacts subsequent years Note: The treatment of investments in a 529 savings plan varies by school. Assets are typically treated as the account holder’s and not the student’s. (Student assets are generally assessed at 20%, whereas parental assets are generally assessed at 5.6%.) Any investments, including those in 529 accounts, may affect the student’s eligibility to get financial aid based on need. You should check with the schools you are considering regarding the issue.