529 College Savings Calculator

Often, if it goes in early. The calculator starts from today's average annual cost for the type of school you pick (College Board's 2025-26 averages for tuition, fees, housing and food, from Trends in College Pricing 2025), grows it by your college inflation rate until the grandchild turns 18, and keeps growing it through four years of school. It projects the 529 balance forward at your expected return and compares the two. Its defaults model one grandparent making a single five-year gift of $95,000 for a 4-year-old.

The gift is made once and never touched again. Most of what the grandchild eventually spends is growth, and all of it comes out free of federal income tax if used for qualified expenses. That is the case for giving early rather than writing checks during the college years.

$19,000 per grandchild per year in 2026 from each grandparent, or five years of that at once for a 529. The annual gift-tax exclusion lets you give that much to any number of people with no return and no use of your lifetime exemption. For 529 contributions only, you can elect to treat a larger contribution as if it were made evenly over five years, up to $95,000 per beneficiary (IRS Form 709 instructions). A married couple who split gifts can put $190,000 into one grandchild's account in a single year.

The election is made on Form 709 for the year of the contribution, and each spouse files if the gift is split. Grandchildren are "skip persons" for gift-tax purposes, so the gift is reported in the generation-skipping part of the return's Schedule A. Here is what a single gift made now could grow to by age 18, against the calculator's cost assumptions:

On these assumptions, a single grandparent's five-year gift made at birth covers 101% of a public in-state education, and a couple's covers 86% of a private one. Made at age 4, as in the calculator's defaults, the single gift covers 97%. The later the gift, the less the growth, which is why grandparents who can afford it often give when a grandchild is born. For more on gifting across the family, see the guide to gifting to children and grandchildren.

Not on the FAFSA any more. A 529 owned by someone other than the student or parent is not reported as an asset when the student is only the beneficiary (Federal Student Aid Handbook, 2026-27). Until the 2024-25 aid year, the catch was on the income side: withdrawals from a grandparent's account were reported as the student's untaxed income, which could reduce the next year's aid. The FAFSA Simplification Act removed that question. Money received by or paid on behalf of the student is no longer reported (Federal Student Aid).

Two caveats. Many private colleges also use the CSS Profile, run by the College Board, for their own grant money, and it can ask about accounts owned by others; ask each school how it treats grandparent support. And a parent-owned 529 does count on the FAFSA as a parent asset, so giving to your child's account is slightly less aid-friendly than owning one yourself.

It is a complement, not a replacement. Tuition you pay straight to a college is excluded from gift tax on its own, on top of the annual exclusion, but it must go directly to the school and covers tuition only; books, supplies and room and board do not qualify (IRS Form 709 instructions). A 529 has years to grow tax-free first and can pay for housing and books.

• Grandchild still young: fund a 529 now, so the growth is tax-free and outside your estate.
• Grandchild in college: pay tuition directly to the school and let the 529 cover room, board and books.
• Very large estates: do both, since direct tuition payments do not reduce the annual exclusion you can give each year.

It passes to the successor owner you name, outside your will. A completed 529 gift is out of your estate, with one exception: if you made the five-year election and die before the five years end, the share allocated to later years is added back to your gross estate (26 U.S.C. 529(c)(4)(C)). With a federal exemption of $15 million per person in 2026, that rarely creates tax, though it can in states with their own estate tax.

Name a successor owner when you open the account, usually the grandchild's parent, and keep the choice consistent with your estate plan. Without one, the plan's rules or your estate decide who controls the money. List every account in the estate planning worksheet.

Return and college inflation, in that order. For a newborn headed to a public in-state school with nothing saved, the monthly amount needed to fund 100% changes like this:

The 5% inflation default is deliberately cautious. Age-based 529 portfolios shift toward bonds and cash as enrollment nears, so the average return over the whole period is usually lower than a stock-only estimate. If you are funding with a lump sum, the return assumption matters even more, because all of the money is exposed for the full period.