Why you should not have assets in the child’s name when saving for college

Simple math is the answer. 20 is a much bigger number than 5.64. If assets are in the child’s name, the school expects 20% of the proceeds to go toward tuition. For example, a $10,000 savings account in the child’s name will lead to a $2,000 expected contribution toward tuition. If those same funds were in the parents’ names, the expected contribution would be $564!! Quite a difference. Note the 5.64% applies toward 529 plans because the child is considered as a beneficiary and not an owner.