How can I position my family's finances to best take advantage of student aid options and the FAFSA equation?
On the savings / 529 front... kids are 5 and 2, grandparents started 529's (and do a 2:1 match up to $1000 from me / $2000 from them per year per kid). So we have funds of approx $17K and $7K at the moment. And I want to keep saving aggressively. But should we stay the course on this plan, or should I start my own 529 and ask grandparents to contribute to my 529? I ask specifically because I've read that grandparent 529's are great because they don't count against you on FAFSA... until the year after you first use them - at which point they actually count against you WORSE than if it had been a 529 I started. So I guess that means, kids can apply as incoming freshman and look great on FAFSA, but as soon as we pay their freshman year with grandparent 529, year 2 recalculates and all of a sudden we're worse off? So I'm wondering, can I get past this by eating 1-2 years on the front side, try to pay as much out of pocket, or max the student loans for the first year or two? Then just pay years 3-4 with grandparent 529? Or should I ask them if we can flip it, start my own 529 and have them contribute to mine (with the goal of the new fund being for years 1-2), and the existing grandparent 529 for years 3-4?
Other relevant / side-questions... I plan to have my mortgage paid off before the first kid goes off to school. Is that a good idea? I mean, in general I like the idea of paying off the house nice and early in life, but will that screw me on FAFSA and make us look like we have tons of disposable income to pay the school? Location if relevant... we're in NC, grandparents started fund while they were also residents here (now live out of state).
Submitted February 19, 2017 at 03:30PM by BillyReuben http://ift.tt/2lasE3o
