Both children now have full ride to college!

[Arktinkerer]

Wife stayed home and schooled both boys until Jr. High.  Emphasized education, computer skills, math, science and reading.  Twice yearly family event is attending the library book sale.  House is full of books, tools, computers (used and/or state surplus).  Youngest son just followed his older brother's path and chose a university that offered him a full scholarship and stipend.  They both will have some troubles spending the money from the education savings accounts we set up for them.  I guess there is always graduate school!

[Babybalrog]

I just heard somebody with this problem(?) on the radio.

They had a UTMA holding a 529 and it was all complicated. But yes, send them to grad school. Otherwise the money can still be taken out, just whit a 10% penalty and taxes. What was said (and I don't know clearly) was that this can be taxed at the child's tax rate. Or if its a 529 you can change the beneficiary (grand kids?) but not if its a UTMA

[mxt0133]

Congratulations!  You can withdraw funds and avoid any penalties up to the scholarship awarded, you would still however pay taxes on the gains.

You can also leave them for your future grandchildren, imagine another 20-25 years of compounding.

http://www.savingforcollege.com/articles/20100122-5-ways-to-spend-leftover-529-plan-money?page=5


For some reason, a lot of people on this forum severely underestimate how much scholarship money is out there for college.  I get that if you take the average student then the probability of them getting one is low.  However, most people on this forum are not average and have the means and time to help their kids be in the top 5% (academically, athletics, extra curricular activities) which will almost guarantee them receiving some form of scholarship.

[Dee18]

As my daughter will not be using much of her 529 fund due to a tuition scholarship, I am having her take out some every year.  There is no penalty because of her scholarship and her income is low enough that she doesn't pay taxes. (This was a gift from her grandparents, or I would be taking the money!)

[Gin1984]

You can withdraw the money equivalent to the scholarship without penalty but you do pay taxes.  Or you could pay for living expenses for the boys etc.

[Arktinkerer]

As my daughter will not be using much of her 529 fund due to a tuition scholarship, I am having her take out some every year.  There is no penalty because of her scholarship and her income is low enough that she doesn't pay taxes. (This was a gift from her grandparents, or I would be taking the money!)

At what point is she considered independent?  Our eldest has income from summer work but the CPA says it is very hard to have him considered independent because even though we pay very little toward his expenses he doesn't have another permanent address--even though he lives off campus.  We really only cover his healthcare and pay for his phone.  Everything else is on him.