College Corner Newsletter

College Corner | Educational Savings

Every parent and grandparent we work with wants the same thing: the brightest future possible for their child or grandchild—and for many, that includes some form of Higher Education funding. As you know, we believe every dream is worth supporting with a sound financial strategy and guidance. That's why we created this College Corner newsletter: to spark a conversation with you or your young learners about the vast array of options they may want to consider.

Speaking of options, let's look at one of the most commonly used educational saving tools: 529 Plans.

Understanding 529 Plans

A 529 Plan, or "qualified tuition plan," per Section 529 of the Internal Revenue Code, offers you a tax-advantaged way to save for your child or grandchild's future education costs.

Essentially, we have two options when it comes to 529 Plans.

Educational Savings 529: This option lets you open an investment account for your beneficiary's future education expenses, including tuition, mandatory fees, and room and board. A unique advantage of these saving plans is their broad usage scope, covering any college, university, and even certain non-U.S. institutions.

Prepaid Tuition 529: These plans allow you to purchase units or credits at present-day prices for your beneficiary's future use at participating colleges and universities. However, they may offer flexibility that differs from an education savings plan.

Before committing, be aware that residency requirements differ from state to state, which can influence your plan eligibility and benefits.

Rules to Remember

A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. The state tax treatment of 529 plans is only one factor to consider before committing to a savings plan. Also, consider any fees and expenses associated with a particular plan. Whether or not a state tax deduction is available will depend on your state of residence. State tax laws and treatment may vary. State tax laws may be different from federal tax laws. Earnings on nonqualified distributions will be subject to income tax and a 10% federal penalty tax.

Can a 529 Impact Financial Aid, Grant, or Scholarship Eligibility?

While different educational institutions treat assets held in a 529 account differently, investing in a 529 plan could impact a student's eligibility to receive need-based financial aid for college. It's best to check with your chosen educational institution to learn their specific policies.

Ready to Learn More?
We're poised and ready to hit the books on your behalf. Go ahead and hit reply if you want to chat about anything. And remember, the earlier we engage in strategic saving for the future, the more time your money has to grow.

Critical Dates & Deadlines

• The SAT/ACT Anticipated 2024–25 Test dates begin August 24, 2024, and close June 7, 2025. You can find the exact dates soon at collegeboard.org.¹
• The 2024–25 Free Application for Federal Student Aid (FAFSA®) form is available for submission from July 1, 2024, to June 30, 2025. However, States and schools can also have their own FAFSA deadlines. Be sure to check those deadlines by contacting your chosen institution's Office of Financial Aid.²
• College fairs and visits can be a wonderful resource when deciding on your institution. Many institutions offer guided tours or attend fairs for future students. For the most up-to-date information bookmark: www.nacacattend.org
• Early decision deadlines vary slightly from school to school, but most fall on November 1 or November 15. Always check the deadlines of your top schools before applying.
• Other deadlines differ drastically depending on the institution of your choice. Bookmark the most recent deadline page offered and check it often.

The College Navigator on NCES.ed.gov is an ideal resource for starting your college search. This interactive tool helps tailor your college search using specific criteria relevant to you, such as majors, costs, and location.

Using the Compare Colleges feature, you can evaluate colleges based on numerous factors, including costs and earning potential for different fields of study, using the College Scorecard.

The Map Your College feature provides the geographical context of your preferred institutions. Enter a state or zip code to locate colleges and gain access to their IPEDS data and official websites, consolidating important information for your decision-making process.

<sup>1. Edvisors.com, November 2023
2. Studentaid.gov, 2024</sup>