Did You Know?

The following statements include facts and common misconceptions about 529 plans, as well as information about the value of an education and financing a college degree.

  • Funds in 529 savings plans can be used at virtually any accredited college or university in the U.S. and at some foreign schools. See eligible institutions at www.fafsa.ed.gov.
  • Earnings from 529 plans are not taxed when used to pay for qualified higher education college expenses.
  • The account owner of a 529 plan maintains control over the use of the account.
  • Some states offer matching grants and other benefits to participants in their 529 plans.
  • Your 529 plan contribution qualifies for the $15,000 per beneficiary annual gift tax exclusion ($30,000 for a married couple).
  • There are two varieties of 529 plans: college savings plans and prepaid tuition plans.
  • Savings in a 529 plan can be used to pay qualified higher education expenses such as tuition, room and board, fees, books, supplies, and equipment required for enrollment.
  • Many states offer a state income tax deduction or credit based on contributions into a 529 plan.
  • There are no income limitations on a person’s ability to contribute to an account.
  • You can participate in almost any 529 plan across the country, no matter what state you live in.
  • Most need-based financial aid comes in the form of student loans. Any amount you save today will help offset the need to take on debt to pay for school.
  • Since 1980, tuition, room and board adn other fees at four year public universities have more than doubled. Source
  • High school graduates are more likely to go on to college today than in the past. Sixty-eight percent of high school graduates of the class of 2014 had enrolled in college by the following fall, up from 52 percent of the class of 1970. (National Center for Education Statistics)
  • Individuals with a bachelor’s degree earn approximately 64% more each week than individuals with a high school diploma. Source
  • Millennial college graduates ages 25 to 32 who are working full time earn more annually—about $17,500 more—than employed young adults holding only a high school diploma. Source
  • In 1979 when the first wave of Baby Boomers were the same age that Millennials are today, the typical high school graduate earned about three-quarters (77%) of what a college graduate made. Today, Millennials with only a high school diploma earn 62% of what the typical college graduate earns. Source
  • Minimum contributions can be as little as $10.
  • In most states, you can contribute as much as $300,000 or more per beneficiary.
  • Prepaid plans are currently offered by 11 states and 1 not-for-profit organization.
  • More than $300 billion is invested in 529 plans across the country.
  • More than 13.6 million 529 accounts are open nationally.