How will contributing to a 529 impact financial aid eligibility?
Although your savings will be considered in the EFC calculation, income is a bigger factor than assets. However, both types of 529 plans will impact your EFC. A college savings plan, such as the NextStudent Scholar’sEdge plan, is considered the parents’ assets and is factored into the EFC at 5.6% so that a portion of the assets are considered in the financial aid calculation. A prepaid tuition plan, on the other hand, is considered to be the student’s asset, and reduces financial aid dollar-for-dollar.
