0 COMMENTS | Ohio Tuition Trust Authority | April 10, 2014

Myth- Your child must attend an Ohio school in order for you to use CollegeAdvantage.

Many people think that if they save with CollegeAdvantage that their child must attend an Ohio college or university in order to use the funds. But that’s not true. In spite of this fact, sometimes the myth remains. Here are some reasons why this misunderstanding persists:

When CollegeAdvantage was established in 1989, as a prepaid tuition plan backed by the full faith and credit of the state of Ohio, the cost of the units that were available for purchase was based on the Weighted Average Tuition (WAT) of Ohio’s 13 public, four-year colleges and universities. CollegeAdvantage has always, from its inception, allowed families to use the value of their units at any accredited college in the nation. However, because the value of the units or credits at the time of withdrawal was based on the WAT of Ohio schools, the value withdrawn might not have covered as much at a non-Ohio school. Although the Guaranteed 529 Savings Plan remains closed since 2004 to new enrollments and contributions, families are still regularly withdrawing their investments to help fund their students’ college educations at colleges and universities throughout the country.

In 2000, CollegeAdvantage expanded its 529 program and began offering variable mutual fund investments for college savings accounts. This was the start of the CollegeAdvantage Direct 529 Savings Plan and the CollegeAdvantage Advisor 529 Savings Plan which is offered by BlackRock. These product offerings allow account owners to be more selective about their investments and portfolios based on their personal risk tolerances, desired earnings potential, and savings goals. Yet, this major shift in our college savings product offerings still didn’t eliminate the myth of Ohio-only schools.

Although families from across the country choose CollegeAdvantage because of our investment options, performance, and low fees, 84% of all Direct Plan accounts, and 38% of all Advisor Plan accounts, are owned by Ohioans. The main reason for this is that only Ohio taxpayers are eligible to take advantage of the state of Ohio income tax deduction for contributions to their CollegeAdvantage accounts. Tax-free earnings and the state of Ohio tax deduction are great reasons to open a CollegeAdvantage account, especially for Ohioans.

But no matter where you live, when you save with CollegeAdvantage, your kids can choose the school of their dreams. CollegeAdvantage can be used at any 529-eligible college or university in the nation!