529 College Plan

[Guest KevinP]

If your child receives a full scholarship, will the 529 plan allow you to take the money out with a penalty, or are you required to give it to a family member?

[Just Me]

You can take it out, but if it's not used for educational expenses for the beneficary, you lose the tax-free character. So if you leave it in the account long enough, you will come out ahead cash-wise even if you never use it for educational expenses.

[Guest larry_beef]

There is a 10% penalty on the earnings only on withdrawn funds if not used for qualified educational expenses. Normal taxes on gains will apply. You can withdraw for any reason at any time. For more information please go to http://www.529educationplan.com

[Guest larry_beef]

There is no such requirement to give this to a family member. If you wish to redeem the funds and the money is not used for qualified educational expenses, there will be 10% penalty on the earnings only. You can change beneficiaries at any time without penalty, within the family.

http://www.529educationplan.com