WWYD

[tvguy]

But you have to pay interest on the loans, don't you? I still like the 529. If you don't use it for secondary education, you can transfer to a Roth.

ETA: The $300 you paid a month comes out to $3600/year. That MIGHT cover room & board for a semester. Ideally, we would have been able to afford putting them through school with no loans. Which they might have been able to do if they went to a school that didn't have their major & interests.

DD lived at home for 3 of her 5 years of College. And the year she went to Community College was free of tuition, which is why I said AVERAGED $300 a month.
As I have posted before she has gone back to school to get her Masters, this with no financial help from us. She is at a University in the former East Germany. She went there because they had the program she wanted, and at a much lower tuition rate, in a city with a low cost of living. I have POA and am in the process of doing her U.S. Tax return. She spend just under $12,000 in 2025 for everything. Tuition, rent for an apartment, food, insurance, everything. For the record, by far her biggest expense is health insurance each month. So you can find bargains in education if you look.

 

[Mackenzie Click-Mickelson]

I agree with this.
I also disagree with people saying "it's her money, she should keep it." It's NOT her money, it is @sam_gordon 's money, which he has allocated into educational savings accounts. He can move things around as he sees fit for their educational purposes. And if he wants to say "she's had life lessons now, so here's the money" that's fine, but it is not her money (yet).

Morality plays a large role here. Arbitrarily deciding just when you apply things and when you don't never looks good and is most especially egregious when it's a parent doing it to their child (adult or otherwise). Ironic speaking about life lessons I'd say.

 

[sam_gordon]

DD lived at home for 3 of her 5 years of College. And the year she went to Community College was free of tuition, which is why I said AVERAGED $300 a month.
As I have posted before she has gone back to school to get her Masters, this with no financial help from us. She is at a University in the former East Germany. She went there because they had the program she wanted, and at a much lower tuition rate, in a city with a low cost of living. I have POA and am in the process of doing her U.S. Tax return. She spend just under $12,000 in 2025 for everything. Tuition, rent for an apartment, food, insurance, everything. For the record, by far her biggest expense is health insurance each month. So you can find bargains in education if you look.

OK, so another "outside the norm" situation. Choice of schools for us is in the past.

 

[kdonnel]

We felt student Direct Unsubsidized Loans and Parent Plus Loans made more sense.

I fail to understand how borrowing money makes more sense than saving?

529 plans are very generous in what counts as qualified use, has many exceptions around scholarships, death or disability of the listed beneficiary, use for student loans, apprenticeships, and the ability to transfer beneficiary.

And if you still overfund there are provisions for a Roth IRA rollover.

Absolute worse case there is a 10% penalty on the earnings withdrawn and then taxes owed on that withdrawal.

All of those are so much more appealing to me than a young adult starting life with loans.

 

[soccerdad72]

I agree with this.
I also disagree with people saying "it's her money, she should keep it." It's NOT her money, it is @sam_gordon 's money, which he has allocated into educational savings accounts. He can move things around as he sees fit for their educational purposes. And if he wants to say "she's had life lessons now, so here's the money" that's fine, but it is not her money (yet).

Obviously, the money is still Sam's to allocate as he sees fit (otherwise, this whole thread is moot). But given the situation laid out, right now, the 529 is allocated to the younger daughter. My opinion (take it for what it's worth - which is not much ) is that the funds should stay allocated to her for now.

 

[tvguy]

My kids all attended public universities, the total cost was about $620,000 (and thats with one graduating a year early, and two with merit, $10,000 a year and $17,000). They had 529s, federal student loans, and private loans (interest rate was always better with private). Our in state public’s are about $40,000 a year with housing.

That is crazy.

 

[tvguy]

I fail to understand how borrowing money makes more sense than saving?

529 plans are very generous in what counts as qualified use, has many exceptions around scholarships, death or disability of the listed beneficiary, use for student loans, apprenticeships, and the ability to transfer beneficiary.

And if you still overfund there are provisions for a Roth IRA rollover.

Absolute worse case there is a 10% penalty on the earnings withdrawn and then taxes owed on that withdrawal.

All of those are so much more appealing to me than a young adult starting life with loans.

I did not say we weren't saving. Just not within a 529. I did not like the restrictions. This was my wife and I's money, not our kids. And remember College Tuition was deductible at the time my kids were in college.

 

[barkley]

I also disagree with people saying "it's her money, she should keep it." It's NOT her money, it is @sam_gordon 's money, which he has allocated into educational savings accounts. He can move things around as he sees fit for their educational purposes. And if he wants to say "she's had life lessons now, so here's the money" that's fine, but it is not her money (yet).

legally it IS the op's but I think just by virtue of his raising this question in his own mind let alone posting for opinions he mentally/emotionally considers it his youngest daughter's and that's why he's questioning it's disposition.

 

[sam_gordon]

I did not say we weren't saving. Just not within a 529. I did not like the restrictions. This was my wife and I's money, not our kids. And remember College Tuition was deductible at the time my kids were in college.

It's still deductible.

 

[sam_gordon]

legally it IS the op's but I think just by virtue of his raising this question in his own mind let alone posting for opinions he mentally/emotionally considers it his youngest daughter's and that's why he's questioning it's disposition.

Well, I consider money we've set aside for her education. But, if she doesn't need it (not saying it won't come in handy for her, whether for future degree or retirement), is it more beneficial to help wipe out the loans of her siblings?

 

[sam_gordon]

I did not say we weren't saving. Just not within a 529. I did not like the restrictions. This was my wife and I's money, not our kids. And remember College Tuition was deductible at the time my kids were in college.

No, you did not say you weren't saving. But you did say you thought loans were a better vehicle. Obviously I'm not against loans, but if the choice is between getting a loan vs using 529, the 529 is heads and tails the better choice.

 

[tvguy]

No, you did not say you weren't saving. But you did say you thought loans were a better vehicle. Obviously I'm not against loans, but if the choice is between getting a loan vs using 529, the 529 is heads and tails the better choice.

My financial advisor did not feel the same way.

 

[tvguy]

It's still deductible.

I stand corrected. Google let me down, it said the deduction expired in 2020.

 

[Kennywood]

It sounds like all of your children have done well with their education. For that, you and your spouse are to be commended. As for the leftover funds in DD2's account, why not have an honest, adult conversation with her? Ask her what she might want to do with the funds. You could mention that the money could be used to help her siblings pay down their education debt. But, as she is an adult, the final choice should be hers. If she doesn't choose to help out her siblings, they should never be told about the conversation. It could result in bad feelings.

Be upfront and honest with DD2. Lay out her options and let her choose. Whatever she chooses, let that be the end of it. Once the choice is made, move on.

 

[barkley]

Well, I consider money we've set aside for her education. But, if she doesn't need it (not saying it won't come in handy for her, whether for future degree or retirement), is it more beneficial to help wipe out the loans of her siblings?

for ME-given what you've shared...........I would just let it sit there and continue to grow for the time being. if your dd gets into the disney program it may open her to a world of options she never considered that may require further education in which case I think you would regret (for lack of a better term) 'short-changing' the portion of the funds you had earmarked for her. as for your older kids it's no 'loss' to them not receiving it b/c if youngest had taken the same 4 (or 5 in the case of the teacher) year path there would likely have been nothing remaining to offset their loans. that said-since you are kind of looking at this as an educational fund for all your kids would you even consider entirely depleting it if one of your older ones announced in the next handful of months that they were going to pursue a grad degree? would their current educational pursuits outweigh your youngest's potential continuing/future?