Financial Planning for Generation X & Y Women
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Expert Q&A Archive

Should assets for college funding be owned in the parentís or the childís name?
Do you think assets for college funding should be owned in the parentís name or the childís name?
Anne Delle Donne:
expert info »

Any Federal grants or funding assets held in the child's name are counted more "heavily" against the child's ability to get federal financial aid via a percentage (which I believe is now reduced to 20%) than if the assets were held in the parentsí names. (UTMA 529 plans will be counted as a parental asset v. the child's assets, whereas a regular UTMA (Uniform Transfer to Minors Act) account will be counted as a part of the child's asset base.

With current generations, maturity does not always present itself at ages 18-21, so again, my preference is the parents have the access to the funds and can administer the assets for the child's benefit.

[Editor's Note: More information on UTMAs and UGMAs is available on such Web sites as FinAid, SallieMae College Answer, SallieMae Before College, and]
Michael A. Masiello:
expert info »
Normally it's better for the assets to be in parentís name, especially if 529 plan. More flexibility for family and the account balance counts less against any potential financial aid calculation or benefit if it's in the parentís name. Assets in the child's name are expected to be used for the cost and are subtracted from any fin aid at a heavier rate. I think the rate differential is 6% vs 25% for inclusion against the potential aid.
Gary Silverman, CFPģ:
expert info »

Even better, the grandparent's, uncle's, or aunt's name. Though the exact formula will change over the years, a child's assets and income are heavily considered when it comes to financial aid. After all, why should I (the taxpayer) spend my money to educate someone who can afford it themselves.

To a lesser, but still significant, extent the same thing applies to the parent's income and assets. So if I had to choose between the two, I'd choose the parent. But even better: consider a grandparent. No one looks at their income or assets.

There's a lot more to consider, so look at sites such as,,, or

Scott Kreger:
expert info »

I think by far the best investment vehicle for college planning is a 529 Plan.

The owner of a 529 is the parent with the child as beneficiary. This gives the parents complete control of the assets. If the funds are in the child's name, at age 18 or 21 (depending on type of account), the assets become the childís. The child may use the assets for anything he or she wishes. As far as financial aid and taxation, it is also more beneficial to use a 529 plan. For further and more detailed information check out: