Raiding your kid's college account

By Beth Braverman, Money magazine


NEW YORK (Money magazine) -- Q: My wife and I could use the funds in our 5-year-old son's money-losing Ohio state 529 account to pay off my wife's $25,000 Stafford loan. Any reason not to? -- Joseph Kim, Sandusky, Ohio

A: Yes.

Pillaging your kid's account means you'll have to start from square one for saving for his education, says Kalman Chany, author of "Paying for College Without Going Broke."

Also, you'd be disallowed any Ohio state income tax deduction you took in years you funded the account (or planned to carry over for future years), which means you might have to cough up several hundred dollars.

You don't have to worry about federal income taxes or penalties on withdrawals, however, since the account has lost money.  To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.45%4.47%
15 yr fixed3.89%3.90%
5/1 ARM4.19%4.22%
30 yr refi4.45%4.46%
15 yr refi3.88%3.88%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 24,461.70 -196.10 -0.80%
Nasdaq 7,712.95 -68.56 -0.88%
S&P 500 2,749.76 -17.56 -0.63%
Treasuries 2.90 -0.03 -1.06%
Data as of 6:13pm ET
Company Price Change % Change
Advanced Micro Devic... 15.65 -0.87 -5.27%
General Electric Co 12.76 -0.12 -0.93%
Micron Technology In... 59.44 0.49 0.83%
Bank of America Corp... 29.29 0.05 0.17%
AT&T Inc 31.60 -0.40 -1.25%
Data as of 4:15pm ET

Sections

Russian trolls posing as an American college student tweeted about divisive social, political and cultural issues using an account that amassed thousands of followers -- and appeared in dozens of news stories published by major media outlets -- as recently as March. More

Thinking of splashing out a lot of money on fancy new car or dream vacation? Ask yourself these six questions to avoid financial chaos. More