Author Topic: DD just received full tuition scholarship!  (Read 2068 times)

Dee18

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DD just received full tuition scholarship!
« on: March 19, 2015, 05:42:30 PM »
Celebrating my darling daughter's award of a full tuition scholarship to a top 50 liberal arts college!  (Not the kind of school I would choose, too small, but exactly what she wants.)We have more than enough in the 529 account to cover room, board, and books and she has worked and saved enough for a year's spending money.  So she will graduate debt free. 

For those of you who wondered about what happens to money in a 529 account if you get a scholarship, I learned that she can withdraw money each year (up to the amount of the scholarship) with no penalty. She would have to treat it as income for tax purposes, but we don't have that much extra in the account and her income from a part time job is pretty small, so she won't actually have to pay taxes. Or we may leave it in for grad school.

Secretly Saving

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Re: DD just received full tuition scholarship!
« Reply #1 on: March 19, 2015, 05:54:40 PM »
Congratulations!  That is exciting for the entire family! 

fartface

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Re: DD just received full tuition scholarship!
« Reply #2 on: March 19, 2015, 06:43:32 PM »
Great share and good information! Congrats to your daughter!

Annamal

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Re: DD just received full tuition scholarship!
« Reply #3 on: March 19, 2015, 07:17:15 PM »
Congratulations to you and your daughter!

SaintM

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Re: DD just received full tuition scholarship!
« Reply #4 on: March 19, 2015, 07:21:17 PM »
Great news.  Now it's time for advanced college planning:

Buy an inexpensive 3 bedroom house or condo near campus for her to live in, but sell it to your alter-ego personal s-corporation.  Withdraw money from the 529 plan tax-free to pay the s-corp's rent.  DD meets some friends at her college, and the s-corp rents the other two rooms to them.

You get the money out of the 529 tax-free and your alter-ego earns rent (which will be mostly if not all tax-free cashflow) and builds equity.

GizmoTX

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Re: DD just received full tuition scholarship!
« Reply #5 on: March 19, 2015, 07:28:57 PM »
Or if she has to live in the dorm, pull the money out each year & reinvest it in a tax friendly account, probably in her name, assuming there are no other children. Then the money will be available for graduate school or whatever venture she will want to do after graduation. If you leave it in the 529 & she doesn't choose graduate school, then you may have a problem accessing it.

Congratulations!