Author: Vicki Sleder, Marketing Associate, Savings Plans, First National Bank of Omaha
Halloween is right around the corner, and with it comes plenty of tricks, treats, and spooky stories. What better time to bust some of the spookiest 529 myths? To help our account owners avoid getting tricked, we rounded up –and busted– some of the most common tall tales about 529 plans:
- Myth: 529 plans can harm a beneficiary’s chances of receiving financial aid
Fact: 529 plans have little impact on a student’s eligibility for federal aid. When determining eligibility for federal aid, the student’s assets are counted more heavily than their parents’ assets. Since 529 savings are parents’ assets (i.e. the account owners) rather than the student’s (i.e. the beneficiary), 529 plans have a much smaller impact on federal aid eligibility. Parental assets will reduce a student's aid package by a maximum of only 5.64% of the asset's value.
- Myth: 529 plans only cover tuition payments
Fact: 529 plans cover a variety of qualified expenses – not just tuition. If an expense is required for enrollment or attendance, it most likely qualifies. These expenses can range from book and school supplies to room and board, a personal computer and computer software. For more details on what qualifies as a NEST 529 expense, contact our team at email@example.com or by calling 1-888-993-3746.
- Myth: 529 plans are only for teenagers
Fact: 529 plans are for students of all ages. Savings can be used to support undergraduate education as well as graduate school, continuing studies, trade school, community college, online school and more. For a full list of eligible institutions visit https://www.savingforcollege.com/eligible_institutions/
Wishing you a happy Halloween on behalf of everyone here at NEST 529 – minus the 529 spooks!