I'm on the threshold of sending my daughter off to college, and many people have told me that it is best to eat up your 529 savings in the early years so you qualify for more aid in the later years. Is this true? I'm so very confused...
Here's my real-world example.
I've saved $44k in the 529 for my daughter. She is therefore only eligible for $5500 Stafford loan. Total annual college cost: $40k. My parents are contributing $10k/year.
$55k total cost
- $10k grandparent contribution
- $5500 Stafford loan
- $11k 529 (assuming we only use 1/4 of the total saved per year)
~$5500 GAP
If I take more out of the 529 in years 1-2, and even maybe 3 so that I have no out-of-pocket GAP in those years, will we qualify for more AID (NOT necessarily LOANS) in years 3-4?
Add in I have a second daughter graduating high school in 2 years...