The College Investor

Navigating the college experience can be challenging on many levels. Deciding on the right college, picking the perfect major, and navigating which classes to choose are all important parts of making it to your college graduation.

Deciding how much of a course load you want to take depends on a number of factors, including your major, what classes are available and how you are adjusting to college life. 

It's important to understand how many credit hours are required to be a full-time student, since being a full-time vs. a part-time student can have a major impact on your college life. This includes graduation, financial aid, scholarships, and eligibility for on-campus housing.

Who Is Considered a Full-Time Student?

The Department of Education and most colleges and universities consider someone taking 12 or more credit hours a full-time student. If you're taking fewer than 12 credit hours in a semester, you are considered a part-time student. 

Because many universities charge the same amount of tuition for full-time students, it can be cost-effective to take more than 12 credit hours in a semester.

How Long Does It Take To Graduate If You're A Full-Time Student?

You might think that if 12 credit hours per semester is considered full-time that you can graduate on time with such a workload. 

However, the reality is that at most colleges and universities, you'll need to take a minimum of 120 credit hours to earn a bachelor's degree. That means that if you only take 12 credit hours each semester, it will take you 10 semesters (5 years) to complete a bachelor's degree.

An extra year of college means an extra year of tuition, an extra year of room and board and an extra year that you don't have a full-time job where you can start earning money and paying back any student loans that you have. 

This is why many states and universities have started a "Fifteen to Finish" campaign. The campaign encourages undergraduates to take a minimum of 15 credit hours each semester. 

That would allow you to complete 120 hours in only 8 semesters (4 years). Since many colleges charge the same full-time tuition amount whether you take 12 credits, 15 or even more, this can be a way to save on college expenses.

What Happens If You're Not A Full-Time Student?

Being a full-time student is a requirement for a variety of different college-related items. 

If you have scholarships, you may be required to be enrolled at least full-time to keep your scholarship. Any financial aid packages you have may also be affected—some financial aid may require you to be a full-time student while others may only require you to be attending part-time. 

If you're living in on-campus housing provided by your university, they may also require you to be a full-time student or take a minimum amount of credit hours each semester. 

This can also be a factor if you start out taking a full-time load and later drop a class. If you start out taking 13 credit hours, that would be considered full time. But if you later drop one of your classes that is three credit hours, you would drop down to 10 credit hours and will likely no longer be considered to be attending full-time. 

This may have ramifications to your financial aid package, scholarships, or on-campus housing arrangements. If you're not sure how that might impact you, consult with your school's academic advising or financial aid offices.

Full-Time Student vs. Part-Time Student: What's The Difference?

Being a full-time student or a part-time student at a particular institution of higher learning is usually determined by how many credit hours you're taking in a semester. 

If you're taking 12 or more credit hours, you are usually considered full-time, and if you're taking less than that, you are considered part-time. 

Whether you are a full-time student or a part-time student can have an impact on your financial aid or ability to live in on-campus housing.

The Bottom Line

Your status as a full-time or part-time student can potentially have an impact on your financial aid, scholarships, ability to live on campus, and other aspects of your college life. 

This is true even if you start the semester with enough credits to be a full-time student and drop a class during the semester. 

If you're not sure whether or not you are considered a full-time student or what the impact would be if you started taking classes part-time, talk with your school's admissions or financial department.

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

Editor: Claire Tak

The

The U.S. Supreme Court held a hearing on Tuesday, February 28, 2023 concerning two cases that opposed the President’s student loan forgiveness plan, Joseph R. Biden, President of the United States, et al., Petitioners v. Nebraska, et al. (22-506) and Department of Education, et al., Petitioners v. Myra Brown, et al. (22-535).

The federal government was represented by Solicitor General of the United States, Elizabeth B. Prelogar. Nebraska was represented by Nebraska’s Solicitor General, James A. Campbell. Myra Brown was represented by John Michael Connolly of Consovoy McCarthy PLLC.

The questions asked by the justices may provide some insights into their thinking. They asked questions about legal standing, the major questions doctrine, the definition of waive or modify, the price tag of the President’s student loan forgiveness plan, separation of powers, fairness of forgiveness, the difference between worse off and better off, and the intent of Congress.

Let's dive into this recap of the Supreme Court hearing on Biden's student loan forgiveness plan so you can understand the viewpoints. 

Legal Standing

Before a plaintiff’s lawsuit can be considered on the merits, the plaintiff must demonstrate legal standing. Legal standing requires that the plaintiff demonstrate that they have been harmed directly and definitively by the actions of the defendant. This is known as “injury in fact.” 

The key point of demonstrating legal standing, as Justice Jackson said, is to “allow the political branches to hash this out without interference from a torrent of lawsuits brought by states and entities and individuals who don’t have a real personal stake in the outcome.”

Justice Alito asked, “It's the case, isn't it, that if any party in either of these two cases has standing, then it would be permissible for us to reach the merits of the issue?”

The Nebraska case is more likely to demonstrate legal standing, but nevertheless faces several problems in establishing legal standing.

Several of the justices asked questions about the legal standing of the state of Missouri, which brought a lawsuit on behalf of MOHELA, a state loan agency. MOHELA did not itself filed a lawsuit seeking to block the President’s student loan forgiveness plan. This is referred to as “third-party standing.”

Justice Alito asked, “You think that the fact that MOHELA is incorporated is the end of the day? That's enough to defeat standing?” He continued, “And where we're considering injury in fact, why should the test turn solely or why should the lack of corporate status be a necessary element? Why shouldn't the test be something more like whether the relationship between this entity and the State of Missouri is such that an injury to MOHELA will necessarily or presumptively be an injury to the state?”

Justice Jackson highlighted how the state of Missouri had financially disentangled itself from MOHELA, “if we look at MOHELA and we see that its financial interests are totally disentangled from the state, it stands alone, it's incorporated separately, the state is not liable for anything that happens to MOHELA, I don't know how that could possibly be a reason to say that an injury to MOHELA should count as an injury to the state.” Justice Jackson noted that “MOHELA has the ability to defend itself and its interests.”

Justice Sotomayor highlighted the separation between the state of Missouri and MOHELA, saying, “And it would be odd for us to have a state say we're creating a corporation, we're not going to be responsible for its debts, we're not going to be responsible for any of its contracts, we're not going to be responsible for anything it does financially, and the state itself says this is not the state, it's an independent corporation, and we're going to say instead that it is the state, correct?”

Later on, Justice Sotomayor asked the attorney representing the plaintiffs, “How can you have injury in fact if you immunize -- you, the state, have immunized yourself from any liability or any injury that MOHELA can experience?”

After the plaintiff’s attorney said, “MOHELA doesn't need to be here because the state has the authority to speak for them,” Justice Barrett asked, “If MOHELA is an arm of the state, why didn't you just strong-arm MOHELA and say you've got to pursue this suit?”

Justice Kagan asked the plaintiff’s attorney about the problems with third-party standing, saying, “Usually we don’t allow one person to step into another’s shoes and say, ‘I think that that person suffered a harm,’ even if the harm is very great.” Justice Kagan continued, “We leave it to the person, him or her or itself, to make that judgment. Now, here the state has derived very substantial benefits from setting up MOHELA as an independent body with financial distance from the state and sue and be sued authority. So why isn't MOHELA responsible for deciding whether to bring this suit?”

The Brown case lacks standing because their challenge to the use of the Heroes Act of 2003 wouldn’t do anything to redress their alleged harm, but instead ensure that nobody receives debt relief. The argument is also a bit circular, assuming the conclusion in order to establish legal standing.

Justice Sotomayor said, “I'm at a loss as to how you have standing because there is no notice and procedure required under the HEROES Act. The only way you can win is if you strike down this program completely, and that means that you don't get an opportunity to be heard, but nobody else does either. … This is so totally illogical to me that you come into court to say I want more, I'm going to file a suit to get more, but I know I'm going to get nothing.” Solicitor General Prelogar aptly referred to the Brown case as a “Rube Goldberg theory of standing.”

Major Questions Doctrine

Several justices asked whether the major questions doctrine would apply if the case is considered on the merits. 

The U.S. Supreme Court previously ruled, in West Virginia v. EPA (2022), that the major questions doctrine applies in cases involving “vast economic and political significance” such as “massive spending.” It requires clear and unambiguous statutory text authorizing a specific agency action in such situations. This is not a new doctrine. The 2001 U.S. Supreme Court ruling in Whitman v. American Trucking stated that Congress does not “hide elephants in mouseholes.” 

Chief Justice Roberts said, “But whether Congress acted or not was a factor that we considered in the Major Questions Doctrine, and the way we considered it is whether or not the issue that was before the Court is something that had been seriously considered and debated and was a matter of political controversy before Congress. That certainly is the case here, right? … Well, not just a politically significant action but one that has the attention of Congress. The fact that it hasn't acted under the Major Questions Doctrine but has considered the matter we cited as support for the notion that maybe it should be one for Congress. … If you’re talking about this in the abstract, I think most casual observers would say, if you’re going to give up that much amount of money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy, they would think that’s something for Congress to act on. And if they haven't acted on it, then maybe that's a good lesson to say for the President or the administrative bureaucracy that maybe that's not something they should undertake on their own.”

Justice Kavanaugh pointed out that the Heroes Act of 2003 does not refer to loan cancellation and loan forgiveness. “So then that leaves us with a situation that I think we've seen before, an old statute with kind of general language, Congress specifically considering the present issue repeatedly but not, as you acknowledge, passing legislation that would authorize the specific action and then, in the wake of Congress not authorizing the action, the executive, nonetheless, doing a massive new program.”

Justice Kavanaugh said, “Some of the biggest mistakes in the Court's history were deferring to assertions of executive emergency power. Some of the finest moments in the Court’s history were pushing back against presidential assertions of emergency powers.”

On the other hand, Justice Kagan pointed to the “waive or modify” language in the Heroes Act of 2003, saying, “Congress doesn’t get much clearer than that. We deal with congressional statutes every day that are really confusing. This one is not.”

Waive or Modify

Yet, Chief Justice Roberts said, “It doesn’t say modify or waive loan balances.”

Justice Kavanaugh agreed, saying that “Congress … could have in 2003 referred to loan cancellation and loan forgiveness, and those are not in the statutory text.”

Later, though, Justice Kavanaugh said that “waive” is “an extremely broad word,” and “in 2003, Congress was very aware of potential emergency actions in the wake of September 11^th and war, possible terrorist attacks, and yet it puts that extremely broad word, "waive," into the statute.”

Justice Barrett said, “Just to be clear, waiver in the statute refers to waiving the statutory and regulatory provisions, not waiving the obligation to repay?”

Price Tag

There was some discussion of the cost of the President’s student loan forgiveness plan, to some extent in the context of the Major Questions Doctrine.

Chief Justice Roberts said, “In an opinion we had a few years ago by Justice Scalia, he talked about what the word ‘modify’ means, and he said modified in our view connotes moderate change. … We're talking about half a trillion dollars and 43 million Americans. How does that fit under the normal understanding of ‘modifying’?”

Justice Sotomayor said, “The forbearance of payment is $5 billion a month or something like that? It's an outrageous sum. And yet no one is disputing that the Secretary has that power. It’s not the amount of money. The question is what's Congress's intent.”

Separation of Powers

There was also some discussion of the separation of powers, since only Congress has the power of the purse.

Chief Justice Roberts said, “Your view [is] that the President can act unilaterally, that there was no role for Congress to play in this either, and at least in this case, given your view of standing, there's no role for us to play in this -- in this either. … We take very seriously the idea of the separation of powers and that power should be divided to prevent its abuse.”

Justice Alito said, “Drawing a distinction between benefits programs and other programs seems to presume that when it comes to the administration of benefits programs, a trillion dollars here, a trillion dollars there, it doesn't really make that much difference to Congress. That doesn't seem very sensible.”

Justice Thomas said, “As a cancellation of $400 billion in debt, in effect, this is a grant of $400 billion, and it runs head long into Congress's appropriations authority.”

Justice Sotomayor said, “That really has us, as the third branch of government, changing Congress's words because we don't think we like what's happening.”

Justice Jackson said, “What concerns me is that to the extent you're talking about separation of powers and major questions, the judiciary is part of the same constitutional separation of powers dynamic that compels us to think about questions like the Major Questions Doctrine. And I feel like we really do have to be concerned about jumping into the political fray, unless we are prompted to do so by a lawsuit that is brought by someone who has an actual interest. So, this is why I'm sort of pressing really hard on the standing point.“

Fairness

There was a discussion of the fairness of student loan forgiveness in the Brown case.  

Chief Justice Roberts asked whether it was fair to forgive the loans borrowed by students but not the loans borrowed to start a lawn care service. He said, “Now it seems to me you may have views on fairness of that and they don't count. I may have views on the fairness of that and mine don't count. We like to usually leave situations of that sort, when you're talking about spending the government's money, which is the taxpayers' money, to the people in charge of the money, which is Congress.”

Justice Sotomayor responded that “everybody suffered in the pandemic, but different people got different benefits because they qualified under different programs.”

Justice Kagan also said. “Congress passed a statute that dealt with loan repayment for colleges, and it didn’t pass a statute that dealt with loan repayment for lawn businesses,” she said. “ And so Congress made a choice, and that may have been the right choice or it may have been the wrong choice, but that’s Congress’ choice.”

No Worse Off vs. Better Off

Justice Gorsuch asked about whether the statutory language in the Heroes Act of 2003 that allows the Secretary to “waive or modify” provisions to ensure that “affected individuals are not placed in a worse position financially” allows them to be in a better position financially. 

Justice Gorsuch said, “So some persons can be better off is your position. I guess how many is my next question, right? Let's say two people in Missouri, okay, all right, they're better off, fine. But what if it's 90 percent of the class just hypothetically that -- could the Secretary do that under this statute?”

Intent of Congress

Solicitor General Prelogar responded to the Chief Justice’s question about the Major Questions Doctrine and whether the President’s student loan forgiveness plan should have been left for Congress by pointing out that the American Rescue Plan Act provides evidence of the intent of Congress to permit the President’s student loan forgiveness plan. 

Solicitor General Prelogar said, “During the pandemic, Congress enacted a provision of the American Rescue Plan that specifically anticipated and sought to facilitate a program of loan discharge by providing that it wouldn't be subject to federal taxation from 2021 to 2025.”

This is a key point that had not been made previously in any of the legal briefs filed in the case.

Mark Kantrowitz is an expert on student financial aid, scholarships, 529 plans, and student loans. He has been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. Mark has written for the New York Times, Wall Street Journal, Washington Post, Reuters, U.S. News & World Report, MarketWatch, Money Magazine, Forbes, Newsweek, and Time. You can find his work on Student Aid Policy here.

Mark is the author of five bestselling books about scholarships and financial aid and holds seven patents. Mark serves on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and is a member of the board of trustees of the Center for Excellence in Education. He previously served as a member of the board of directors of the National Scholarship Providers Association. Mark has two Bachelor’s degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master’s degree in computer science from Carnegie Mellon University (CMU).

Editor: Robert Farrington

Paying for college is a lot harder when you’re dealing with

Paying for college is a lot harder when you’re dealing with daycare costs, medical bills, and slowing income growth. This is why starting a college fund is an important first step. 

It's important to remember too that a college fund doesn't have to pay for all of college. Even 20% of the cost can go a long way to helping out in the future. That's why we created our guide to How Much You Should Have In A College Savings Fund By Age.

We give tips on the best ways to open a college savings account, and how to find money to put into it.

Open A 529 Plan In Your State

You can save for college in a variety of accounts and a 529 Plan offers distinct advantages. 529 Plans are investment accounts designed to help pay for K-12 and higher education expenses. 

The accounts offer tax advantages including tax-free growth and tax-free distributions as long as the money is spent on a broad range of eligible expenses. Some states even offer a tax deduction when you contribute to the plan.

Opening a 529 Plan is almost as simple as opening a brokerage account. However, make sure you open the right account for your state. Some states only offer tax deductions if you use the state’s plan. Others offer deductions no matter what plan you use. This guide gives you state-by-state details on opening an account or click on your state below.

In general, you don’t need much money to open a 529 plan account. If you can scrape together $100, you should be able to get started. The only other information you need is about your state of residence, and basic information about the beneficiary.

Getting the account open is a small administrative hurdle. The real challenge is getting money into the account so it can grow over time. No matter how old your child or beneficiary is, we have suggestions for how you can save for college.

How To Save When Kids Are Young

Start Funding the Account With Small Monthly Contributions

When your child is first born, you’ll probably experience a big shock to your cash flow. Either your income will drop or your expenses will dramatically increase (daycare is expensive!). Finding $100 per month may not be easy at this phase.

Instead of worrying about a specific number, consider automatically sending a $20 contribution to the savings account each month. That’s $10 per paycheck. 

At this point, you’re already adjusting to a huge financial shock, so it’s unlikely that the $20 per month will make much difference to you. Plus, it will keep you in the habit of saving for the future.

Deposit Gifts Into the 529 Account

Grandparents, doting aunts and uncles, and even a few friends might give your child cash gifts for birthdays and holidays. 

Putting these funds directly into the 529 Account boosts college savings and saves your house from a few unnecessary items. 

Pay For Daycare With A UPromise Credit Card

A UPromise credit card is a cash back credit card that gives you a boosted rate of return if the cashback goes into a 529 Plan Account. This is an especially effective way to start saving for college if you can pay for daycare expenses using the Upromise credit card. 

Boosting Savings During Elementary Years

Childcare expenses don’t disappear during the elementary years, but they should fall by at least a few thousand dollars per year. This may translate to more savings opportunities. 

These are a few ways to boost college savings despite the multiple tugs on your wallet.

Encourage Kids To Put A Portion of Cash Aside

By the time kids are in elementary school, they will likely have some ideas of how to spend gift money. But that doesn’t mean they need to spend all the cash that comes into their hands. 

Setting aside a third of their gift money for college can help them establish a savings habit. Make it easy by setting aside money for investing before you take them to the store to buy a new toy.

Boost Your Automatic Savings Rate If You Can

The elementary years are a great time to boost your automated savings rate if your cash flow has recovered. 

Moving from $10 per pay period to $25 or $50 can help you to make meaningful progress towards your college savings goals. The amounts are small enough that they allow you to save for retirement and enjoy life today, but large enough to make some difference in the future.

Put ‘Found Money’ Into The 529 Account

Tight monthly budgets make it difficult to contribute large amounts of money to college savings. But you can use “found money” to put into the account. 

This can include unexpected gifts, larger-than-expected tax refunds, stimulus money (if that happens again), and more.

Investing More During Middle and High School

With college costs looming, parents often get serious about savings during middle and high school years. This is also a great time to help your student take more ownership of their college savings too.

Put Award Money Into The Account

Starting in middle school, students may start to stumble across college scholarship opportunities. These might include micro-scholarships (ranging from $20-$100) for community service, academic excellence, winning a competition, and more. 

You can even earn a scholarship for side hustling. Though these are designated as scholarships, the award is often cash or a check that doesn’t have to be put toward college. Push your kids to invest this money in their 529 accounts. 

Incentivize Saving With A Match

Students in middle and high school can have after-school jobs or side hustles that bring in extra funds per month. 

At this phase of life, consider matching their college savings up to a certain level each month. As your child starts to take an active part in their savings, they are likely to take more ownership of the entire college process (including identifying more scholarship opportunities or considering community college to keep costs down).

Keep The Automatic Savings Going

As your child becomes a teen, the costs of college continue to grow. You’re unlikely to figure out a way to cover the full cost of college in the next six to seven years, but steady savings will help. Combining these steady efforts with college scholarships, your child’s savings, and gifts from others, you may see a low five-figure investment account.

If you're in a better financial position than you were during your child’s elementary years, consider boosting these savings to $100 per pay period or more. The more you save, the fewer loans your child may need.

Adjust Asset Allocation As You Get Closer To College

As your child gets closer to college, take a look at the 529 account and assess where you are in terms of growth. Your investing focus will shift from growth to maintaining the amount of money in the account. That focus will come with adjustments to your asset allocation. 

During our child’s high school years, a large portion of your college funds should be in cash or bonds to cut back on volatility. You may want to keep some amount in stocks to facilitate some growth. After all, you should have four years to spend the money, so dips in the stock market may have time to recover.

Robo-advisors like Wealthfront will adjust the allocation in your 529 plan on your behalf, but some other companies expect you to do that on your own.

How Will You Start Your College Fund?

Paying for college is a daunting task, but you can tackle it by starting your college fund today. 

With regular contributions from both you and your kids, you may be surprised by how much you can save by the time college rolls around.

Hannah is a wife, mom, and described personal finance geek. She excels with spreadsheets (and puns)! She regularly explores in-depth financial topics and enjoys looking at the latest tools and trends with money.

Editor: Claire Tak Reviewed by: Robert Farrington

The ability to seamlessly track all of your financial accounts in one place helps you take control of your current situation.

For some, it’s a game changer

The ability to seamlessly track all of your financial accounts in one place helps you take control of your current situation.

For some, it’s a game changer and platforms like Buxfer allows you to track your budget, investments, and plan for retirement in one place. The expansive platform operates in more than 150 countries in over 100 currencies. 

If you are looking for a new tool to manage your money, Buxfer is a fairly comprehensive option. Let’s explore the details of Buxfer so you can decide if it’s the right fit for your situation. 

Quick Summary

What Is Buxfer?

Buxfer is a financial app that aims to help users take control of their financial future. 

The guiding principles of the product include easy-to-use flexibility, real-time advice, and proactive planning for the future. With an impressive array of analytics, you can glean interesting insights about your money habits.

What Does It Offer?

Here’s a closer look at what Buxfer has to offer. 

Visual Spending Tracker

A core component of any financial platform is its budgeting capabilities. Within the Buxfer platform, you can link your bank accounts from a network of 20,000+ financial institutions. Once the accounts are linked, your transaction details are pulled into the platform. 

The Buxfer platform makes it easy to see how much you are spending in each category. If you’ve overspent in a category, you’ll easily spot this on the dashboard. You can break down your budget categories into nestled sub-categories. For example, you might break down the main category of food into restaurants and grocery stores. 

Forecasted Projections

Through the Buxfer platform, you’ll be able to check in on your current net worth anytime. But Buxfer takes things a step further by offering a forecast of your future net worth. 

The projection is based on your current spending behavior. For example, if you are consistently earning more than you spend, Buxfer might map out projections for a growing net worth. If you are spending more than you earn, then the reverse might hold true. 

The forecasting tool is helpful to see how long you can stay afloat at your current trajectory. If you are spending less than you earn, this forecasting tool can encourage you to stick to consistent spending. You can see a forecast for up to 12 months into the future. 

Precise Controls

If you like to have complete control over your financial platform, Buxfer delivers a nice level of control. You’ll have the ability to set up rules for your spending. This makes for easy categorization of tricky expenses. 

For example, if you do your grocery shopping at Walmart, you might tag that as grocery spending within the food category. Once you set up the rule, Buxfer will automatically categorize these transactions.

Monitor Progress Toward Long-Term Goals

Long-term financial goals are a healthy part of a money plan. One of the biggest money goals we all share is the ability to fund a happy and healthy retirement. While saving for this major goal isn’t always easy, Buxfer makes it easy to keep track of your progress. 

Are There Any Fees?

Buxfer is a paid platform that offers three different tiers, ranging from $3.99 to $9.99 per month. Before you dive into the paid platform, you can take a test drive in through the free demo. Within the demo, you can zoom around to see if you like the layout. 

Unfortunately, the company doesn’t offer a free trial. However, the website claims “We have a very easygoing refund and cancellation policy.”

How Do I Contact Buxfer?

Buxfer offers support via email. If you need to get in touch, shoot an email to support@buxfer.com. 

How Does Buxfer Compare?

Buxfer isn’t the only option for monitoring your financial picture. In fact, there are a slew of options out there. Here’s how Buxfer stacks up to two of our favorites.

Longstanding budgeting platform Mint is similar to Buxfer in that it pulls in your transactions across multiple accounts. But unlike Buxfer, Mint makes it difficult to customize your transactions to fit into the right slot of your budget. Keep in mind that Mint is free but comes with ads that Buxfer users can avoid. 

Header
Rating
Pricing	$3.99/month to $9.99/month	$14.99/mo or $99/yr	Free
Free Trial	N/A	34 Days	N/A
Platform	iOS, Android, Web	iOS, Android, Web, Alexa, and more	iOS, Android, Web
Cell	Cell	READ THE REVIEW	READ THE REVIEW

How Do I Open An Account?

Creating an account is as simple as adding your email and password. From there, you’ll start connecting your bank account details from Buxfer’s sync providers, Yodlee and SaltEdge. 

Once the account is set up, you can make customizations to your heart’s content.

Is It Safe And Secure?

Buxfer puts a big emphasis on keeping your information secure. The site uses 256-bit encryption to protect your information.

Additionally, the company pays for daily scans and audits from independent security firms to pinpoint any network vulnerabilities. All of this work means your information is likely safe with the platform.

Is It Worth It?

The ability to make significant customizations to your money management platform on Buxfer is ideal for those who are enthusiastic about keeping up with the nitty-gritty of their personal finances. With Buxfer, you’ll have a tool that can help you keep track of funds across different accounts, countries, and currencies. 

If you already have a personal finance tracking system that works for you, then Buxfer might not be worth the switch.

But if you are looking to upgrade to a customizable option at a relatively affordable price point, Buxfer might be worth it. 

Buxfer Features

Buxfer Review: A Budgeting Tool For The Detail-Oriented

Overall

Summary

 Buxfer allows you to track your budget, investments, and plan for retirement in one place. It’s more comprehensive than Mint so you can streamline your categories and spending more accurately.

Pros

Cons

Sarah Sharkey is a personal finance writer covering credit cards, mortgages and student loans. She has written for numerous finance publications, including MagnifyMoney, Business Insider and ChooseFI. Her blog, Adventurous Adulting, helps young adults get a handle on their finances.

Editor: Claire Tak

A Multigenerational 529, also known as a Dynasty 529 Plan, is a way of using one

A Multigenerational 529, also known as a Dynasty 529 Plan, is a way of using one or more 529 plans to leave a legacy of education for future generations. A Dynasty 529 Plan can be set up by parents, grandparents, or other relatives. 

With a Dynasty 529 Plan, high net-worth parents save more than is required for their children’s college education, meaning, they can continue to save in the plan even after their kids have graduated. A Dynasty 529 Plan benefits from years of tax-free growth before parents tap into it to pay for the costs of college. 

However, passing on a 529 plan to future generations may result in gift taxes and generation-skipping transfer taxes. The 529 plans may also affect eligibility for need-based financial aid. 

Depending on the number of descendants and increases in college costs, a Dynasty 529 Plan might not be enough to pay for the college costs of all future generations. 

529 Plan Basics

529 plans are specialized savings accounts that are used to save for education expenses. Contributions are made with after-tax dollars and earnings accumulate on a tax-deferred basis.

 Two-thirds of states offer a state income-tax deduction or tax credit based on contributions to the state’s 529 plan. 

Distributions for qualified education expenses are entirely tax-free. 

The earnings portion of a non-qualified distribution is subject to income tax at the recipient’s rate, plus a 10% tax penalty and possible state income tax breaks.

Qualified expenses include:

Contributions to a 529 plan are exempt from gift taxes up to certain limits.

Contribution Limits And Super-Funding

529 plans do not have an annual contribution limit.

Contributions are subject to the annual gift tax limit of $17,000 (2023) per contributor per beneficiary. A couple can give twice this amount, or $34,000. 

529 plans offer five-year gift-tax averaging, also called super-funding, in which a contributor can give a lump sum of up to five times the annual gift tax exclusion. One fifth of the contribution is removed from the contributor’s estate each year. 

A key benefit of super-funding is it allows a lump sum contribution to earn money for longer than a series of annual contributions.

529 plans do have aggregate contribution limits, which vary by state. The aggregate contribution limits are per beneficiary and include all 529 plans for the beneficiary in the same state. 

Once the 529 plan account balance reaches the limit, no further contributions may be made, but the 529 plan can continue to appreciate in value. There is no limit on how large the 529 plan can grow.

Families Can Have 529s Across States

A family can have 529 plans in multiple states and use them to pay for college in any state. The aggregate contribution limit in one state’s 529 plan does not consider amounts saved in 529 plans in other states.

If a family invested to the limit in all the states, the total contributions could be as much as $23.3 million per beneficiary.

529 plans do not have age limits, unlike Coverdell education savings accounts. Coverdell education savings accounts require contributions to end when the beneficiary reaches age 18. The account must be fully distributed by the time the beneficiary reaches age 30. 

There are exceptions to this rule, including if the beneficiary has special needs. In contrast, contributions may be made to a 529 plan regardless of the age of the beneficiary, and there is no requirement to ever take a distribution.

4 Strategies For A Multigenerational 529 Plan

There are several key ways to for continued funding and growth for a multigenerational 529 Plan.

1. Think long-term: You can continue making contributions to a 529 plan even after the beneficiary has graduated from college. Since 48 is the median age of parents of college-age children, this suggests that you could continue making contributions for another 35 to 40 years. 

2. Change the account owner to your wife: You may want to make the woman (wife) the account owner and continue to make contributions, since women tend to live longer than men. 

3. Name another family member as the beneficiary: This is a work-around for the annual gift tax exclusion and contribution limits. (See more below in the Change in Beneficiary section.) 

4. Open multiple 529s in various states: When the 529 plan’s aggregate contribution limit is reached, you can open a 529 plan in another state for the same beneficiary. You can also make contributions to the 529 plans in multiple states simultaneously, subject to the limits of annual gift tax exclusions and lifetime gift tax exemptions. 

There is no aggregate contribution limit on rollovers in most states. So, you can rollover an out-of-state 529 plan and another family member’s 529 plan into the child’s in-state 529 plan. 

However, some states consider an outbound rollover to be a non-qualified distribution and subject to state income-tax. 

See the map below—these states include: Alabama, Arkansas, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Montana, Nebraska, New Mexico, New York, Ohio, Oklahoma, Rhode Island, Utah, Virginia, Washington DC, and Wisconsin. 

See the map below—these are states that don’t treat outbound rollovers as non-qualified distributions: Arizona, Connecticut, Kansas, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, North Dakota,  Oregon, Pennsylvania, South Carolina, Vermont and West Virginia. 

Be Aware Of The Annual Gift Tax Exemption

The main limitation on contributions to a 529 plan is the annual gift tax exemption, which is $17,000 per contributor per beneficiary. 

If you contribute as a couple to a Dynasty 529 Plan for 40 years, that’s a total of $1.36 million. This does not count any increases in the annual gift tax exclusion, any appreciation of the investment or any distributions to pay for college costs. If you are willing to use up part of their $12.92 million lifetime exemption ($25.84 million for a couple), you can contribute more. 

It is best to front-load the contributions through five-year gift-tax averaging or using up part of the lifetime gift tax exemption. This is to ensure contributions are made before the 529 plan balance exceeds the contribution limit. 

Examples Of Growth In A 529 Plan Account 

If the 529 plan averages a 4% annual return on investment, it will double in value every 18 years. If the 529 plan averages a 6% annual return on investment, it will double in value every 12 years. This can lead to significant growth in the 529 plan balance. 

The number of children per generation, the amount of initial funding and tuition inflation rates, exponential growth in the number of family members paying for college may eventually exhaust all of the funds in the Multigenerational 529 Plan. 

The Dynasty 529 Plan will generally experience 20 years of growth before the next generation needs help paying for college costs.

Change In Beneficiary

The account owner can change the beneficiary of a 529 plan to a member of the family of the previous beneficiary at any time, without limit. 

The account owner can also transfer funds from one 529 plan to the 529 plan of a new beneficiary. This includes a partial transfer, not just a transfer of the full balance. Such rollovers are limited to once per 12-month period per beneficiary. 

Members of the beneficiary’s family include the beneficiary’s spouse, as well as:

Change In Account Owner

Many states allow a change in the account owner. Some limit a change in the account owner to the death, incapacitation or divorce of the current account owner. Others allow a change in account owner in any situation. Some 529 plans allow the account owner to specify a contingent account owner when the account is set up.

The new account owner does not need to be related to the old account owner. There are no tax consequences for a change in account ownership. Changing the account owner does not result in income, gift, or transfer taxes. 

Parents should choose a state 529 plan that allows flexible changes in account owners, as the account owner of a Dynasty 529 Plan may eventually change. 

What To Know About Gift Taxes 

There is an annual gift tax exclusion of $17,000 per donor per recipient in 2023. This gift tax exclusion is adjusted periodically for inflation. A couple can give twice this amount, or $34,000, when giving together.

There’s also a $12.92 million lifetime exemption for gift and estate taxes. For a husband and wife, the combined lifetime exemption is $25.84 million.

However, the lifetime exemption will drop roughly in half in 2026, when it reverts to where it was in 2017 ($5.6 million) adjusted for inflation since 2017, unless Congress acts. 

Based on inflation as of January 2023, that would yield a lifetime exemption of $6.9 million. The lifetime exemption in 2026 will be at least this amount. But, it will most likely be about $7.8 million based on estimates of inflation over the next three years.

Generation-Skipping Transfer Taxes

In addition to gift taxes, there’s also the Generation-Skipping Transfer Tax (GSTT). The Generation-Skipping Transfer Tax applies if the new beneficiary is at a lower generation than the current beneficiary. 

Transfers include a change in the beneficiary of a 529 plan and a rollover from one 529 plan to another. 

If the new beneficiary is at the same generation level as the current beneficiary, there will be no gift or transfer tax consequences. For example, a change in beneficiary to a cousin of the current beneficiary (e.g., from a niece or nephew of the account owner to a child of the account owner), there will be no gift or generation-skipping transfer taxes. 

If you contribute to a 529 plan of a niece or nephew and later transfer funds to your child’s 529 plan or change the beneficiary to your child, wait a few years to avoid step-transaction concerns.

If the beneficiary is changed to someone who is one or more generations below the current beneficiary, that may be treated as a taxable gift. Likewise, a rollover to a 529 with a beneficiary that is one or more generations below the current 529 plan’s beneficiary may be treated as a taxable gift. 

The IRS has not issued regulations that specify whether this is treated as a taxable gift from the account owner or from the old beneficiary to the new beneficiary. However, proposed regulations from 1998 specified that the transfer is treated as a taxable gift. 

How Are Generations Defined?

People often get confused by what it means for a beneficiary to be one or more generations lower than the current beneficiary. A child is one generation lower than the parent and two generations lower than the grandparent. 

Generations are defined by the Internal Revenue Code of 1986 at 26 USC 2651 as the number of generations between an individual who is a lineal descendant of an ancestor and the ancestor. 

A change in the account owner is not considered to be a transfer and is not subject to gift taxes and transfer taxes. 

There’s an annual exclusion for the generation-skipping transfer tax that is the same as the annual exclusion for gift taxes. Likewise for the lifetime exemption. 

Changes in the 529 plan beneficiary are unlikely to result in the payment of gift or transfer taxes for typical families. 

However, as the size of the Dynasty 529 Plan grows, it may become subject to gift and transfer taxes, especially if the family is very wealthy or if a transfer is made upon death of the current beneficiary.  

Possible Risks

Changes in the laws concerning 529 plans are unlikely, since abuse of the rules is rare, but there are several risks associated with a Multigenerational 529 Plan that may reduce their effectiveness. 

Congress could change the rules associated with gift and transfer taxes, or the annual exclusion and lifetime exemptions, leading to a large tax burden.

State 529 plans could change their rules to no longer allow rollovers when they exceed the aggregate contribution limit. 

Aggregate Contribution Limits (2023)

Mark Kantrowitz is an expert on student financial aid, scholarships, 529 plans, and student loans. He has been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. Mark has written for the New York Times, Wall Street Journal, Washington Post, Reuters, U.S. News & World Report, MarketWatch, Money Magazine, Forbes, Newsweek, and Time. You can find his work on Student Aid Policy here.

Mark is the author of five bestselling books about scholarships and financial aid and holds seven patents. Mark serves on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and is a member of the board of trustees of the Center for Excellence in Education. He previously served as a member of the board of directors of the National Scholarship Providers Association. Mark has two Bachelor’s degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master’s degree in computer science from Carnegie Mellon University (CMU).

Editor: Robert Farrington Reviewed by: Claire Tak