So, You’re Dipping Into a 529 College Savings Plan?

A college bill has just come due, and you think, “No problem! We’ve been saving up money in a 529 college savings plan, so let’s just dip into that!”

Wait, wait—wait just a second.

Here’s an important question to ask before you do.

529 college savings plan

Before dipping into a 529 college savings plan, ask yourself:

Where, exactly, should I have the 529 money sent?

Try not to have 529 college savings plan money sent straight to the college.

The reason, according to this article by CPA Joseph Hurley, founder of, is that some colleges might treat 529 money as a “scholarship” and use it as an excuse to strip your son of some or all of the financial aid money he’s been awarded. Yikes!

Not every college will do this—but some will.

Before you take action, call the college financial aid office and ask this:

“If some money from a 529 college savings plan lands in my daughter’s account today, will that in any way diminish her financial aid award?”

Write down the answer you’re given, along with the name of the person you’ve spoken to.

If the college’s answer is yes, then transfer the 529 money to your own account first—and then on to the school.

I urge every parent with a 529 plan to read this cautionary article provided by

In it, you’ll learn:

1. Why accountants urge you to be carefully aware of the calendar before dipping into a 529 college savings plan. (If you pull money out of a 529 plan in December and send it on to the college in January, that could be trouble.)

2. What you can do to save yourself if you suddenly realize, “Oh no, I think we just took too much out of our 529 plan—we need to do something to avoid paying tax and penalty on what we just took out.”

3. Why you’ll want to ask yourself, “Will I be claiming an education tax credit on my federal tax return next spring?” before pulling money out of a 529 college savings plan.

You’ll find the very helpful article here. provides additional helpful 529 college savings plan advice for parents on these topics:

The Top 7 Benefits of 529 Plans

The Best Way to Use 529 Plan Money

Know This Before Reporting 529 Plan Withdrawals on Federal Tax Returns

What Parents Need to Know About 529 Plans and Tax Credits

Is your child’s grandparent thinking of opening a 529 college savings plan?

This can be a great idea! Learn why in the detailed article I’ve written for parents and grandparents here.

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When you’re a parent, it feels great to know that you’re taking practical steps to set your kid up for successful college and career life.

For clear, step-by-step help getting your kids through college debt-free and into jobs they love afterward, get your copy of my book:

It’s a reference book, so nobody reads the whole thing cover to cover. Pick out what you need to read in it using the fast-paced, 10-minute video instructions here.

You can see more than 100 reviews of it on Amazon at:

(Tell your friends.)

You can see why financial advising professionals love LAUNCHhere.

You can see the top 9 questions parents are asking me about LAUNCHhere.

Read just one chapter of LAUNCH every 1–3 months while your child’s in middle school and high school, and you’ll know every viable strategy for debt-free college at exactly the right time to implement it.

And if your child’s already well past middle school? That’s OK; you can run to catch up. But the process of getting your kids through college debt-free goes more smoothly the earlier you start it—especially if you’re not planning to save up any money to pay for college.

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What about you? What 529 college savings plan strategies have you found most helpful?

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What is is an independent source of information and education on 529 plans and other college savings topics. was originally founded by CPA Joseph Hurley, who, along with his wife, invested in 36 different 529 plans for their two children as part of his 529 college savings plan research. Joseph Hurley is also the author of the book’s Complete Guide to 529 Plans.

Who is Jeannie Burlowski?

Jeannie is a full-time academic strategist, podcast host, and sought-after speaker for students ages 12–26, their parents, and the professionals who serve them. Her writing, speaking, and podcasting help parents set their kids up to graduate college debt-free, ready to move directly into careers they excel at and love. Her work has been featured in publications such as The Huffington Post, USA Today, Parents Magazineand US News and World Report, and on CBS News.

Jeannie also helps students apply to law, medical, business, and grad school at her website You can follow her on Twitter @JBurlowski.