I am friendly with some children (centered around age 10) whose parents are in poor health and at least one of whom probably won’t survive until the children are college age. I would like to give these kids some money but I am concerned that if I did it will simply be taken away from them roughly 1:1 by their college in the form of reduced financial aid.
This Yale article says that “Student assets are assessed in the financial aid formula at a much higher 20 percent rate…” Does that mean that over a four-year period, 80 percent of a child’s savings will be taken by the college in the form of reduced financial aid? So a child who takes my money and spends it all on a gap year Burning Man pavilion will come out, after college, almost even with a child who saves the money until freshman year?
This article on grandparent-owned 529 accounts implies that funds in a 529 account owned by a non-relative would be safe if not tapped until senior year.