ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The 529 College Savings Plan

Updated on December 22, 2014
It's easy to get lost in a plan that has so many hidden expectations
It's easy to get lost in a plan that has so many hidden expectations | Source

The 529 Hidden Secrets

For those who don't know the 529 plan is a college savings plan most parents get for their kids when they are at a very young age. It is in fact a type of insurance that is specifically for college savings. You get to pick an amount of how much you want to have covered. For example for this specific article we will be using a $100,000 plan. This means by the time your child is ready to go to college you will have $100,000 ready to take out and pay for their education. Sounds pretty good doesn't it? Well here are some insider secrets I bet you didn't know about the plan.

Let's work with a few scenarios to show you how this plan works.

Our first story is about Ron who is a senior in high school. He just got an acceptance letter from NYU and is ready to pack his things and head out. His mom heads to the government office to withdraw the $100,000 she saved up through the 529 plan. When she gets there she is told that because the plan was made in Texas she can not use it for an out of state University. That's right she does not get her money back it has been locked. She now has to pay out of pocket and count on some loans and grants. It is a state based plan and there for is not applicable nationally or internationally.

Our second story is about Alice who is a very clever Junior in High School. She managed to get herself $200,000 worth of scholarships. Sounds great doesn't it? $100,000 from the 529 plus $200,000 in scholarships-wrong. You see when her mom went to the office to withdraw her scholarship money for her education it showed the 529 plan in the system. So instead of getting $100,000 from the 529 and $200,000 from the scholarships, she gets the $100,000 from the 529 which is deducted from her scholarship and only gets $100,000 out of her scholarship. Now remember how the 529 is in state only? Well so is the scholarship so if she decides to go to the University of Alberta in Canada she looses all of it and ends up paying out of pocket.

Now because this plan is a little complicated how about we break it down to yes and no questions.

Does getting a 529 sound like a good plan when introduced?

Yes, it does because they don't tell you the rules

My child wants to go to an in state university will I get the money?

Yes, you will

My child got a scholarship will I still get both?

Yes, you will get both BUT the amount of your 529 plan will be deducted from your scholarship

I got my child a 529 plan but they decided not to go to college do I get to take out my money?

No, that money now belongs to the government- forget you ever had it

My child wants to go to an out of country university do I get to use the 529?

No, that money is gone you can only use it in state

My child wants to go to California to study so I can still use the 529 right?

No, it is a state plan you can only use it in state

Now you may be thinking "O.k. the 529 plan is a bad idea I get it but what other option do I have?" The plan I have found to be the most favorable in this case is the FFIUL plan which is a Universal Life Insurance and it is best to get it under your child's name when they are newborn or while they are still at a very young age. I will post more information on that plan in my next post. So keep looking out for that post because I will also tell you how to find an insurance agent that will be right for you.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)