Latest / The College Savings Podcast with Fexingo: 529 Plans, Education Funding, and Student Costs
How Grandparents Can Fund a 529 Plan Without Losing Financial Aid
Episode 4 of The College Savings Podcast tackles a specific blind spot: how grandparents' 529 plans can backfire on financial aid. Lucas and Luna walk through the 'grandparent 529 trap' — where a distribution from a grandparent-owned 529 is counted as untaxed student income on the FAFSA, reducing aid eligibility by up to 50 cents per dollar. They explore a workaround: the SECURE Act's provision allowing 529-to-Roth rollovers, and a strategy where grandparents contribute to a parent-owned 529 instead. The episode uses a concrete example: a $10,000 distribution costing a…
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