By Delaware State Treasurer Colleen Davis

November 14, 2023

When we think of saving for college and 529 accounts, we typically think about new parents starting the saving process early, or perhaps parents of older children starting to save as much as they can in a shorter period of time. But rarely do we think about adults using funds from a long-standing 529 account or even adults opening accounts for themselves. As we come off this year’s Veterans Day celebration, let’s think about how 529 plans can benefit those who have bravely served our country.

As we know, a 529 account is a tax-advantaged investment vehicle designed to help families save for the future educational expenses of their children or other beneficiaries. While 529 accounts are typically associated with saving for college, there are potential benefits for military veterans and their families in using these accounts.

Some might think, “I don’t need a 529 account because of the GI Bill.” While generous, the GI Bill often falls short of what is needed for a college education. According to the Federal Register, for the 2023–2024 academic year, the GI Bill covers the full cost of tuition and fees for in-state students at public colleges or universities. Tuition and fees for private or foreign schools are capped at $27,120.05 per year. The GI Bill also provides a $1,000 annual stipend for books and supplies and a monthly housing allowance based on the cost of living where the school is located. Most veterans who have served at least 36 months are eligible for 36 months of college or career training. 

While the GI Bill provides valuable educational benefits, it may only cover some of the educational expenses a veteran or their family might incur. A 529 account can be used in conjunction with the GI Bill to cover additional costs, ensuring that the family has financial support for their educational goals. 529 accounts allow for changes in beneficiary designations. If a veteran decides to use their GI Bill benefits for education, they can designate themselves as the beneficiary and use the 529 account to cover additional expenses. However, they can switch the beneficiary to a child or other family member if plans change. The accounts are also portable. Suppose a veteran’s family relocates frequently due to military assignments. In that case, they can maintain their 529 account and use it for qualified educational expenses in any state, not just the one where the account was opened. 

Possibly the most significant benefit of a 529 account is peace of mind. By using a 529 account, veterans and their families can engage in long-term financial planning to ensure they have the necessary funds for education expenses. This can help reduce the financial stress associated with pursuing higher education.

Keep in mind that individual states administer 529 plans, and some states offer additional benefits to military veterans and their families. These benefits can include matching contributions, reduced fees, or special programs tailored to military families. It’s important to research the specific 529 plans your state offers and any military-related benefits they may provide.

About the author: 

Colleen Davis is the State Treasurer for Delaware. Her office oversees the DE529 Education Savings Plan and is a member of the Plans Management Board, the body legislatively charged as the sponsor of the plan managed by Fidelity Investments. Treasurer Davis also serves as a member of the Executive Board of CSPN.