• Fifth Third 529 CDs Rates Increase

    by Amy Lyle | Jun 18, 2018

    If you’d prefer to be more conservative with your college savings, especially if your child is getting close to college, you have options with Ohio’s 529 Plan, CollegeAdvantage.

    Fifth Third Bank, an investment partner of Ohio’s 529 Plan, is encouraging people to save for their children’s future college costs by increasing the rates of eight terms of 529 Certificates of Deposit (CDs). The new CD rates are effective as of Friday, June 15, 2018. Fifth Third is a member of the Federal Deposit Insurance Corporation (FDIC).
    cd-apys-as-of-06-15-2018-chart

    The rate for the 3-5 Month 529 CD is now 1.00% Annual Percentage Yield (APY), up from 0.25%. The interest rate for 12-23 Month 529 CD increased from 1.70% APY to 2.00% APY. The rate for the 24-35 Month 529 CD, 36-47 Month CD, 48-59 Month CD, 60-83 Month CD, 84-119 Month CD, and 120-144 Month CD, is now set at 2.50% APY, up from to 2.00% APY.

    This is the fifth time in less than a year that Fifth Third has increased the 529 CD rates. Previous increases occurred in April 2018January 2018October 2017, and August 2017.

    The minimum contribution is $500 for a CD. You cannot purchase a CD with payroll deduction or automatic recurring contributions.

    Current CollegeAdvantage Direct 529 Plan account owners can purchase a CD online. Log in to your Direct Plan account and make a one-time electronic contribution of $500 or more from your bank account to buy a CD. After logging in, you can also go to “Change Your Investment Options” section to exchange a current investment with a $500 minimum to buy a CD. You can also download an Additional Contribution Form and mail it with a check to purchase a CD. When selecting to purchase a CD, choose what the term of maturity would best fit your family’s needs.

    Two business days are required to complete the transaction to open a Fifth Third 529 CD. Accordingly, it will receive the APY in effect on the business day following the receipt of a contribution, which is received in good order before 4 p.m. on any given business day.

    Once the CD reaches the end of its term, the balance will automatically transfer to a Fifth Third 529 Savings Account. At this point, you can make a withdrawal, or exchange the funds to another Fifth Third 529 CD or other ​Ohio's 529 Plan investment options. You can also opt to leave the money in the savings account to earn interest. If the 529 CD is liquidated prior to its date of maturity, penalties will be assessed.

    Federal regulations for qualified 529 programs limit the number of times account owners can reallocate investment options for the same beneficiary. Currently, the limit is two exchanges of assets per calendar year, per beneficiary. Please refer to the CollegeAdvantage Direct Plan Offering Statement and Participation Agreement for additional details.

    Both the Fifth Third 529 Savings Account and the Fifth Third 529 CDs are FDIC-insured investment options to certain limits.

    Purchase a CD with these higher interest rates and start saving for your child’s future higher education expenses today! If you haven’t opened a CollegeAdvantage Direct 529 Plan, it’s easy to enroll online and purchase a Fifth Third 529 CD at that time. Ohio’s 529 Plan, CollegeAdvantage, has tools to help you determine how much to save for future college costs as well as age-based savings strategies. Remember, it’s far cheaper to save for college now and earn interest in an 529 account than pay off students loans with accumulated interest later. Ohio’s 529 Plan, CollegeAdvantage is your plan, your way.

  • New Age-Based 529 Investments Available

    by Amy Lyle | Jun 13, 2018

    Ohio’s 529 Plan, CollegeAdvantage, offers updated ready-made age-based portfolios that reflect college-savings industry standards of smoother glide paths. A glide path determines the asset allocation mix within an investment option.

    For an age-based 529 portfolio, the asset allocation mix is achieved through age bands. When the beneficiary is young, there is more stocks (equity) in the portfolio. Why? Stocks are affected by market volatility; so if there is an economic downturn, there will be more time for the college savings plan to recover. As the beneficiary grows older, the mix adjusts with each new age band, reducing the amount of equity and increasing the amount of more conservative investments such as fixed-income and cash preservation options.

    The Advantaged Age-Based Portfolios (AABP) and the Vanguard Ready-Made Age-Based Portfolios now include additional age bands. This change will allow the asset allocation mix to rebalance more frequently. Originally, Ohio’s 529 Plan ready-made age-based portfolios had larger age bands of three to four years. This kept the investment in one asset allocation mix for a long period in which to weather any positive or negative fluctuations in the stock market.

    Advantaged Age-Based Portfolios

    Advantage Age-Based Portfolios (AABP), a blend of active management and passive-index based portfolios, adopted new age-based funds based on the beneficiary’s year of college enrollment. This approach allows the 529 account to stay in a single fund the entire time as the beneficiary heads toward their higher education. Within the portfolio, the asset allocation will rebalance quarterly.

    Every two years, Ohio’s 529 Plan will add a new fund to the AABP. In August, the 2038 year of college-enrollment-date fund will be introduced as the age-based investment option for beneficiaries born between August 1, 2018 and July 31, 2020.

    Vanguard Ready-Made Age-Based Portfolios

    The Vanguard Ready-Made Age-Based portfolios, passive index-based investment options, increased the number of age bands within each of the three risk tracks — aggressive, moderate, and conservative.

    Previously, the Vanguard portfolios included five age bands. Now, these investments have nine age bands, which will rebalance the asset allocation mix more often to create a smoother step-down glide path. There is greater amount of equity in the younger age bands that methodically moves towards being more conservative as the beneficiary nears college. However, each of the three risk tracks — aggressive, moderate, and conservative — will decrease the amount of equity in the portfolio differently. For example, the aggressive age-based portfolio will retain more equity in the older age bands as compared to the conservative track. ​

    “We believe these changes will continue to make the CollegeAdvantage Age-Based Portfolios the most popular investment options in our lineup. Research shows account owners like the simplicity the aged-based options offer. The idea that the portfolio reduces risk the closer a child gets to college is very appealing,” said Tim Gorrell, executive director of Ohio Tuition Trust Authority, the state agency that administers Ohio’s 529 Plan.

    These investment options were updates May 18-20, and were available effective May 21, 2018. For additional information, please review newly updated ​ready-​made ​age-based portfolios on the Investment Option Choices chart.

    To learn more about all the investment options available with Ohio’s 529 Plan, please visit CollegeAdvantage.com. Visit us online to open a 529 plan and start saving for future higher education expenses. Even small amounts can add up to big amounts over time by saving regularly. Ohio's 529 Plan, CollegeAdvantage, is your plan, your way.

  • Ohio's 529 Plan, CollegeAdvantage, Has A New Look

    by Amy Lyle | Jun 01, 2018

    CollegeAdvantage is launching a new logo, which reflects that CollegeAdvantage is Ohio’s 529 Plan and is the best choice to save for higher education costs nationwide and especially for Ohioans.

    After eighteen years of CollegeAdvantage, research showed that Ohioans were faster to act and begin saving for their children’s future college costs when they recognized CollegeAdvantage as “Ohio’s 529 Plan.” A study also showed that the new logo helped a vast majority of participants to correctly associate Ohio’s 529 Plan as a college savings organization. Effective today, CollegeAdvantage’s brand has been officially changed to “Ohio’s 529 Plan, CollegeAdvantage.”

    “We’re still the same trusted tax-advantaged college savings plan which over the last seven years has received silver rating and best-in-class honors from Morningstar as well as a Five (5)-Cap Rating from Saving for College.com. Just as 401(k) is readily associated with retirement savings, we want everyone to have similar recognition of 529 and specifically Ohio’s 529 Plan, as the best way to save for whatever education or training comes after high school,” said Tim Gorrell, executive director. 

    Named after Section 529 of the Internal Revenue Code, Ohio’s 529 Plan offers a tax-advantaged way to save for future college costs. Funds saved in Ohio’s 529 Plan are tax-free when used to pay higher education expenses such as: tuition, general fees, books, computers, and room and board. Ohio’s 529 Plan (like all other 529 plans) was created to help families save for higher education costs and reduce the need for student loans.

    In Ohio, any Ohio taxpayer including parents, grandparents, family members and friends who contribute to an Ohio 529 account can claim a deduction of up to $4,000 in contributions per beneficiary, per year on their state of Ohio taxable income. The yearly maximum allowable deduction is $4,000, but contributors can invest even more. Ohio allows contributions in excess of $4,000 per beneficiary, per year, to be carried forward to future tax years until fully deducted. Funds saved in Ohio’s 529 Plan can be used to pay higher education expenses at any accredited college, university, or degree program in the country. 

  • Giving And Receiving The Gift Of Higher Education

    by Amy Lyle | May 25, 2018

    It’s the time of the year when parents, grandparents, and loved ones burst with pride as they watch the graduating seniors, clad in their mortar boards and robes, cross the stage to receive their high school diplomas. It took everyone working with one goal in mind to reach this pinnacle in their students’ education.

    And these joyous events aren’t just for high school students. Don’t forget graduation ceremonies for preschoolers and eighth-graders.

    That teamwork can continue by asking for gifts to your 529 college savings plan to support your students’ higher education. Thank them for all of their support of your child and share that a college education or post-secondary vocational training can bring your children more opportunities in life. Your loved ones will want to give a gift that has a lasting impact in your student’s life. Their gift contribution to a 529 college savings account can do just that.

    How Others Can Contribute

    So when loved ones ask what gifts your soon-to-be high school graduate might like, talk to them about giving a gift to their higher education. A college savings account with Ohio’s 529 Plan, CollegeAdvantage, makes it easy. There are a variety of ways to contribute.

    The simplest, though, is through Ugift. As the CollegeAdvantage Direct 529 Plan account owner, log in to your account and click on Ugift to receive a unique code for each of your accounts. With this code, loved ones can make online contributions to your Direct 529 plan without needing the actual account number or your child’s Social Security number. Also, the code has no time constraints so they can continue to contribute to the same beneficiary at any time.

    If the gift giver prefers to write a check, it needs to be payable to Ohio Tuition Trust Authority and includes the 11-digit account number. Then, you would mail it the check with this form to the listed address on it.

    If a loved one would like to make a substantial 529 plan contribution, they can invest up to $15,000 ($30,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. You can even contribute up to $75,000 per beneficiary in a single year ($150,000 for married couples) and take advantage of five years’ worth of tax-free gifts at one time. For more information, please have them consult their tax adviser or estate-planning attorney.

    Tax Benefit for Ohio Gift Givers To Ohio’s 529 Plan

    As the 529 account owner, you already know that there are tax advantages for saving for college in Ohio’s 529 Plan, CollegeAdvantage, such as tax-free earnings and tax-free withdrawals for qualified higher education expenses. Ohio residents are eligible to deduct up to $4,000 of their CollegeAdvantage contributions per beneficiary, per year, from their state taxable income. However, they can contribute even more! Contributions over $4,000 per beneficiary, per year, can be carried forward to deduct from future tax years until all of their contributions are fully subtracted from their state taxable income.

    This tax deduction is also available to any Ohio resident who makes a contribution to Ohio’s 529 Plan. So, let your loved ones who are Ohio residents know that their gifts made directly to your child’s CollegeAdvantage account can be deduced their Ohio state taxable income.

    Loved ones want to support your child now and in the future. A gift contribution to their college savings account is a great way to do so. If you haven’t stared to save with CollegeAdvantage yet, it’s easy to open an account online. Ohio’s 529 Plan, CollegeAdvantage, is your plan, your way.

  • Ohio’s 529 Plan Closed For Memorial Day

    by Amy Lyle | May 23, 2018

    The office of Ohio’s 529 Plan, CollegeAdvantage, will be closed on Monday, May 28, in observance of Memorial Day.

    Our Customer Service department (1-800-AFFORD-IT) will be closed on this day. Customer Service representatives are available to assist you on any regular business day from 8:30 a.m. to 6 p.m. ET before or after this holiday. You also always have access to your 529 account online 24/7 if you need to access account information or make a contribution.

    Please note that the New York Stock Exchange (NYSE) will also be closed in observance of Memorial Day. Any transaction requested on a holiday, weekend, or after the NYSE closes will be processed on the next business day.

    Additionally, here are a couple relevant links in recognition of the day:

  • Ohio's 529 Plan Announces Enhancements To Age-Based Options

    by Amy Lyle | May 22, 2018

    Effective May 21, Ohio’s 529 Plan now offers updated ready-made age-based portfolios that reflect college-savings industry standards of smoother glide paths. These changes were implemented May 18-20. 

    These updates will smooth out the larger age steps found in the glide paths of Ohio’s 529 Plan ready-made age-based portfolios. A glide path determines the asset allocation mix within an investment option. In an age-based portfolio, the mix is achieved through step-down age bands. As the beneficiary gets older the age bands allocation adjust to reduce the amount of riskier investments to more conservative ones. This smooth glide path is similar in concept to retirement target-date funds.

    After these updates, CollegeAdvantage ready-made age-based portfolios will offer two variations on smoother glide paths.

    First, the Advantage Age-Based Portfolio (AABP) will use a glide path based on the beneficiary’s college enrollment date, based on the beneficiary’s birth date. This enrollment date-based investment option will automatically reduce risk in the portfolio in small increments as the beneficiary ages.  This change will more regularly reduce the risk within the college enrollment date funds, which allows the portfolios to better weather any market fluctuations.

    The Vanguard Age-Based Portfolios will adopt a smoother glide path by increasing the number of age bands within each of the three risk tracks: aggressive, moderate and conservative. The age bands will increase from five to nine. The new bands consist of smaller age ranges, which will rebalance the asset allocation mix more frequently thus making a smoother glide path.

    “We believe these changes will continue to make the CollegeAdvantage Age-Based Portfolios the most popular investment options in our lineup. Research shows account owners like the simplicity the aged-based options offer. The idea that the portfolio reduces risk the closer a child gets to college is very appealing,” said Tim Gorrell, executive director of Ohio Tuition Trust Authority, the state agency that administers Ohio’s 529 Plan.

    These changes affect all account owners with age-based investment portfolios. However, there’s nothing for the account owner to do as their portfolio will automatically be mapped in the corresponding new option. For the 529 account owners in AABP track, they will be moved into a new fund based on the targeted year of college enrollment of their beneficiary. For those in the Vanguard Ready-Made Age-Based portfolio, they will be shifted into the correct age band based on their beneficiary’s age in their current risk track.

    “Our goal is to make this transition seamless… our account owners need not worry about what to do, it’s all being done for you. It’s also good to know that this exchange does not count toward the twice-a-year exchange limit,” said Gorrell.

    These updates only affected the ready-made age-based portfolios offered by Ohio’s 529 Plan. To learn more about all the investment options available with CollegeAdvantage, please visit CollegeAdvantage.com. Visit us online to open a 529 plan and start saving for future higher education expenses. Even small amounts can add up to big amounts over time by saving regularly. Ohio's 529 Plan, CollegeAdvantage, is your plan, your way.

  • Ohio's 529 Plan Age-Based Portfolios To Be Updated May 18-20

    by Amy Lyle | May 11, 2018

    Effective May 21, Ohio’s 529 Plan will offer updated ready-made age-based portfolios that reflect college-savings industry standards of smoother glide paths. These changes will be implemented May 18-20. In order to complete these adjustments, online access to accounts will not be available ​from 4 p.m. ET on Thursday, May 17, to 8 a.m. ET Monday, May 21​.

    These updates will smooth out the larger age steps currently found in the glide paths of Ohio’s 529 Plan ready-made age-based portfolios. A glide path determines the asset allocation mix within an investment option. In an age-based 529 portfolio, the mix is achieved through step-down age bands. When the beneficiary is younger, the asset allocation mix includes more stocks. Equity is more heavily used in the beneficiary’s younger years as stocks are more readily affected by market volatility and if there is an economic downturn, there will be more time to recover. As the beneficiary grows older, the asset allocation mix adjusts with each new age band, reducing the amount of equity and increasing the amount of more conservative investing vehicles such as fixed-income and cash preservation options. A large age band keeps the portfolio in one asset allocation mix for a long period to weather any fluctuations in the market. This smooth glide path is similar in concept to retirement target-date funds. 

    After these updates, CollegeAdvantage ready-made age-based portfolios will offer two variations on smoother glide paths.

    First, Advantage Age-Based Portfolios (AABP), a blend of active management and passive-index based portfolios, will adopt an enrollment date-based progressive glide path based on the beneficiary’s year of college enrollment. This approach allows the 529 account owner to stay in a single fund over the entire time horizon before the beneficiary heads to college. This enrollment date-based investment option will automatically reduce risk in the portfolio in small increments as the beneficiary ages. When the beneficiary is younger, there is a greater amount of equity in the AABP’s asset allocation mix. The closer the time comes for the beneficiary to head off to college; the asset allocation mix becomes more conservative with a greater focus on cash preservation. Within the portfolio, the asset allocation will be rebalanced quarterly, smoothing out this progressive glide path. The CollegeAdvantage customer will not see changes in their AABP option as they will stay in the same year-to-fund enrollment.

    For your additional information, we have included the birth date ranges for each of the year of enrollment options. Please examine these ​Ready-​Made ​College-​Enrollment-Date ​​Portfolios on the Investment Option Choices chart. These ranges are predefined and the beneficiary’s date of birth automatically determines the year of enrollment fund.

    Second, Ohio’s 529 Plans also offers Vanguard ready-made age-based portfolios, which are passive index-based investment options. These portfolios will adopt a smoother glide path by increasing the number of age bands within each of the three risk tracks — aggressive, moderate, and conservative.

    The current Vanguard glide path includes five age bands that range in length from three to four years. With the new stepped-down approach, there are nine age bands, which reduce the larger allocation shifts between equities, fixed income and cash options in the larger age buckets. By adding these new age bands, the new glide path allows for smaller changes in the asset allocation mix as the beneficiary moves towards college. As with the AABP, there is greater amount of equity in the younger age bands that methodically moves towards being more conservative as the beneficiary draws closer to needing the funds for college. Each of the three risk tracks will decrease the amount of equity in the portfolio differently. For example, the aggressive age-based portfolio will retain more equity in the older age bands. ​P​lease review Investment Options Choices chart to see the new age bands in the Vanguard Ready-Made Age-Based Portfolios.

    These changes will be made for all account owners currently invested in an age-based portfolio. If your current investment portfolio includes a ready-made age-based portfolio, you will automatically be mapped into the corresponding new option. If you are invested in an AABP, you will be moved into a new fund based on the targeted year of college enrollment of your beneficiary. If you are currently in a Vanguard age-based product, you will be shifted into the correct age band, based on the beneficiary’s age, in your current risk track.

    This exchange is initiated by Ohio’s 529 Plan so it will not count towards your twice-per-calendar year limit on exchanges.

    To further review the new ready-made age-based portfolios, please ​go here. To ​read the 30-Day Notice letter sent to affected account owners, please visit here. A new Offering Statement reflecting these updates will be available on our website, CollegeAdvantage.com, on Friday, May 18, 2018.

  • Take Your Own First 529 Steps

    by Amy Lyle | May 10, 2018

    As you proudly watch your child learn to walk across the floor, you start thinking about how quickly she’s growing. And it hits you, college will be coming up quick, too! Start saving for her higher education expenses as soon as possible and use a 529 plan to place those funds for all the tax advantages it offers. Here are some of your own steps to take.

    Best sources for 529 information

    Need a place to start doing research on 529 college savings plans? Head over to an unbiased source of 529 college savings plan information – Savingforcollege.com. This site provides 529 plan rankings, calculators, and informative articles on college savings, scholarships, and financial aid. Additionally, Morningstar, an independent investment research company also evaluates the nation’s 529 college savings plans; here’s their most recent findings. Another resource, College Savings Plan Network, can help you to compare multiple state plans. You should always check out your state’s 529 plan, as there may be an added tax incentive to save in it.

    529 plan tax advantages

    For instance, with Ohio’s 529 Plan, CollegeAdvantage, Ohio residents who contribute to an Ohio 529 account can deduct up to $4,000 per beneficiary, per year, in contributions from their taxable state income. However, you can also contribute more than $4,000 in a year. Contributions over $4,000 per beneficiary, per year, may simply be carried forward to future tax years, until all of your contributions are fully deducted.

    What are the other tax benefits? Established by Section 529 of the Internal Revenue Code, these college savings plans encourage parents to save their children’s future higher education costs in a tax-advantaged manner. The tax benefits are:

    • Tax-free earnings, so all investment growth is yours to cover higher education costs.
    • 529 plan withdrawals cover qualified higher education expenses  at federally accredited programs tax-free. Check the school code search at FAFSA to see if the program qualifies. These expenditures include tuition; room and board (on and off campus) when the beneficiary is enrolled at least half-time; mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and classes; certain expenses for a special-needs student, and withdrawals up to $10,000 per student, per year, for K-12 tuition at a public, private, or religious elementary or secondary schools.

     

    What about financial aid?

    Don’t worry; saving in a 529 college savings plan has a minimal effect on financial aid. For parent-owned accounts, the assets in a 529 account will be included at a maximum of 5.64% for the Expected Family Contribution (EFC) calculations for the Free Application for Federal Student Aid (FAFSA). For lower-income families, this percentage rate may be even lower. As an example, if you, as a parent, save $10,000 in your child’s 529 plan, then only $564 of those college funds will be used in the calculations for financial aid.

    And what about scholarships?

    A 529 account is still an important component of your college-saving strategy even if your child earns a scholarship. Very few scholarships cover 100% of the costs; for instance, a scholarship may only cover the cost of tuition. A 529 plan is perfect for filling the gaps with other qualified higher education expenses. If you are fortunate and the scholarship does cover all qualified higher education expenses, hold onto the 529 plan for your child’s continuing education such as graduate, law, or medical school. You can also transfer the 529 plan funds to another beneficiary. The new recipient must be a family member to the original beneficiary — including siblings, stepsiblings, stepparents, cousins, grandparents, nieces and nephews — to avoid tax penalties. You can also hold onto the account for your grandchildren’s future college costs since there are no time limits for using 529 plans. You can even roll over the account to yourself to fund your own continuing education!

    Lastly, you have the option of withdrawing up to the same dollar amount as the scholarship from the 529 plan. This will be considered a non-qualified withdrawal and the earnings portion of the withdrawal will be subject to federal and state income taxes. Normally, there would be an additional 10% federal tax penalty on the earnings but there are three waivers for this penalty: if the student becomes disabled or dies; if the student attends a U.S. military academy; or if the student receives a scholarship. In this circumstance, since the withdrawal is for a beneficiary earning a scholarship, this federal tax penalty would not be imposed.

    Honors for Ohio’s 529 Plan, CollegeAdvantage

    If you looked at those unbiased 529 plan informational website, you may have discovered how well regarded Ohio’s 529 Plan, CollegeAdvantage, is within the college savings industry. In the most recent Savingforcollege.com quarterly analysis of 529 plan investment performances, Ohio’s 529 Plan is listed as first in the nation in the thee-year and five-year performance category. In the one-year performance category, Ohio’s Direct 529 Plan ranks at eighth in the nation. Additionally, Savingforcollege.com listed Ohio’s 529 Plan as one of its best-rated 529 college savings program across the U.S.

    Morningstar gave CollegeAdvantage Direct 529 Plan a silver rating for the seventh consecutive year. Furthermore, Morningstar upgraded the CollegeAdvantage Advisor 529 Plan to a bronze ranking. This makes Ohio one of only eight states that have both their Direct and Advisor 529 Plans placed in best-in-class investment options by Morningstar. Also, a recent Kiplinger report recognizes Ohio’s 529 Plan as having best age-based portfolio for conservative investors. Kiplinger drew special attention to two of Ohio’s 529 Plan individual investment options: Vanguard Wellington and Vanguard High-Yield Corporate. Additionally, Business Insider  ranked CollegeAdvantage as the third best college savings plan in the nation. Bezinga, a website that offers financial insight, has named Ohio’s 529 Plan, CollegeAdvantage, as best for performance of the nation’s college savings plans.

    Ohio’s 529 Plan tools and calculators

    If you haven’t started saving in 529 account, Ohio’s 529 Plan offers calculators and tools to build a 529 plan that best fits your family’s needs. The cost of waiting tool can determine how much more money you’ll need to save to reach your college savings goals if you aren’t able to maximize the power of compound interest by saving as early as possible. With the college savings planner, you can input your own figures to receive an estimated monthly savings amount needed to reach your savings goals. Use this tool to vary the amounts of monthly contributions to see how setting aside a little more money can really add up. The tax benefit tool can illustrate how the tax benefits of a 529 plan can build the account when compared to a taxable savings account. Your asset allocation strategy is one of the most important investment decisions to make. If you aren’t sure what level of risk you’re willing to take in your investment strategy, the risk tolerance questionnaire can determine your comfort level.

    An additional tool: CollegeAdvantage also provides 529 account strategies designated by life stages, what steps to consider as your child grows closer to needing the 529 funds for their higher education. Also, CollegeAdvantage Direct Plan offers a variety of investment options including ready-made, age-based or ready-made, risk-based portfolios if you like the asset allocation mix in your 529 account to auto-adjust as your child grows older by reducing equity and increasing more conservative investment vehicles.

    As your child takes her first steps, take your own first steps in setting up a 529 college savings plan for her future higher education. While researching 529 plans, make sure to check out the highly regarded Ohio’s 529 Plan. When you open a CollegeAdvantage account, you’re making an investment in your child. Every dollar saved today is a dollar that doesn’t have to be borrowed which makes Ohio’s 529 college savings plan an excellent alternative to student loan debt. Ohio’s 529 Plan, CollegeAdvantage, is your plan, your way.

  • Give The Littlest Grads The Gift Of College

    by Amy Lyle | May 07, 2018

    Pomp and Circumstance” swells as the sounds of rustling gowns and shuffling feet fill the air. The whole audience waits in eager anticipation with outstretched arms with cameras at the ready. Suddenly you see them, with tassels swaying on their paper plate “mortar boards,” crossing the stage to receive their mini diplomas. At the end of the ceremony, they are moving up to . . . kindergarten! Overwhelmed with pride, you think, “Wow, they are growing up so fast.” And then you realize, “Wow, they are growing up SO fast!”  

    They really do grow up in the blink of an eye. By starting early, a college savings fund can grow with them. It’s easy, too, with Ohio’s 529 ​Plan, CollegeAdvantage.

    What’s A 529 plan?

    Established by the Internal Revenue Code 529 in 1996, 529 plans are the tax-advantaged way to save for college through tax- free earnings and tax-free withdrawals for 529 qualified higher education expenses. Additionally, Ohioans who save in Ohio’s 529 Plan, CollegeAdvantage, can deduct 529 contributions up to $​4,000 from their Ohio taxable income per beneficiary, per year. But they are allowed to contribute even more! Contributions over $4,000 per beneficiary, per year, may be carried forward to deduct from future tax years until all of your contributions are fully deducted. By planning ahead for future college costs, a 529 account can grow through power of compound interest, regular contributions from not only the account owner but also family and friends, as well as all the tax benefits.

    Ask Others For The Gift Of A College Education

    You probably weren’t alone as you watched your preschooler graduate. Family and friends will want to give meaningful gifts for this and other important milestones in your child’s life. You can invite them to contribute to your child’s CollegeAdvantage account instead of giving traditional gifts for graduations, birthdays, holidays, achievements, and other special occasions. And it’s easy to arrange. You just need to log in to your CollegeAdvantage Direct Plan and click on Ugift to request a unique code, which will authorize gift givers to donate directly to a 529 plan online without needing the actual 529 account number. Once a gift giver has the code, they can continue to make one-time or recurring electronic gifts for college without fees. If the gift giver is an Ohio taxpayer, they too can deduct their own contributions from their Ohio taxable income. Their gift contribution just needs to be made payable directly to the account, not to the child.

    Disappearing Expenses Can Become 529 Contributions

    Also, with your child starting kindergarten this fall, you can add the money from disappearing preschool expenses to your child’s ​Ohio's 529 account. Disappearing expenses are those costs that are in your budget for a limited time span. And daycare/preschool is one of the largest disappearing expenses for families as their children grow. Once your child enters kindergarten, consider turning those dollars into regular contributions to your CollegeAdvantage 529 account. You won’t miss it and you will be continuing to support your child’s educational needs.

    Age-Based 529 Investment Strategies

    Also, take the opportunity to review your child’s time horizon to college and determine if some modifications need to be made to the 529 college savings plan. If your child just started kindergarten, you have more time to save even more as well as benefit from the power of compound interest. If your child is in middle or high school, you may want to accelerate your college savings. CollegeAdvantage also offers ready-made, age-based portfolios as well as ready-made, risk-based portfolios to tailor a 529 college savings plan to the individual needs of the beneficiary.

    Boost The 529 Account With Upromise

    Ohio’s 529 Savings Program has partnered with Upromise to help account save more for college. Upromise is a free loyalty program that offers its members cash back for their purchases from a wide variety of businesses partners, which include over 850 online retail stores and 10,000 restaurants where Upromise members can earn 5% cash back. Others organizations include over 20,000 grocery and drug stores, where Upromise members earn money back on purchases and earn additional rebates with eCoupons. By connecting debit and/or credit card to an Upromise account, account owners can start earning rewards with everyday shopping. When the account owners link their Upromise account to their CollegeAdvantage Direct 529 Plan, they can roll these rebates straight to the account.

    Curious how CollegeAdvantage Direct 529 Plan account owners used Upromise? Read this Saving Story from a family who used it to add to their 529 savings

    Ohio’s 529 Plan Can Be Used ​Nationwide

    Saving for college in Ohio’s 529 Plan does not mean that those funds can only be used in Ohio. 529 accounts can be used nationwide (and even overseas) at any accredited two-year, four-year, graduate or trade, or any other post-secondary schools that accepts federal financial aid. If the post-secondary school has a Federal School Code on the Free Application for Federal Student Aid (FAFSA), then the 529 plan can be used there to cover qualified higher education expenses. Basically, you can use the 529 account almost anywhere you’re comfortable sending both your student and your money. 

    As you’ll soon experience, ​your children go from preschool to college really fast! Your college savings can grow with them by using Ohio’s 529 Plan. If you are ready to start saving with CollegeAdvantage, it’s easy to open an account online here. For a good overview on what is a 529 plan, visit SavingForCollege.com for a quick video. A 529 savings plan is an excellent alternative to student loan debt. CollegeAdvantage is your plan, your way.


  • It’s Never Too Late To Save In A 529, Even During High School

    by Amy Lyle | May 02, 2018

    You know the saying, “It’s never too late…” Well, it’s never too late to save for your child’s college education in a 529 plan, even if it’s their senior year of high school. Why? 529 plans offer many benefits to enhance the growth of funds placed aside for future college costs.

    529 Plan Tax Benefits

    The first benefit is tax-free earnings. If you are saving for college in a regular saving account, then you’re doing a good thing to  support your child’s future. However, you’re missing the advantage of the tax-free earnings available with a CollegeAdvantage 529 plan. Earnings on a regular savings account will be taxed yearly but 529 investments grow tax-free at the federal and state level, ensuring that every dollar of growth is yours to use. Check out our online tax benefit tool at CollegeAdvantage.com to see the savings.

    The second tax benefit is tax-free withdrawals for qualified expenses, those costs that are required to attend a two-year or four-year college as well as a vocation school. These costs include tuition; room and board while the 529 beneficiary is enrolled for at least half of a full-time academic workload; mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and class schedule; and certain expenses for a special-needs student. Room and board costs can also include rent for off-campus residency and groceries (non-taxable items), provided these costs are equal or less than the same room and board allowances from the accredited educational institution.

    The third tax benefit of opening a 529 account is that Ohio residents receive a $​4,000 deduction from their state gross income for matching contributions made to a CollegeAdvantage 529 account. Those dollars saved in your savings account? As an Ohio resident you can use that money to open a CollegeAdvantage, and claim that $4,000 deduction. And, you can contribute even more! Contributions over $4,000 per beneficiary, per year, can be carried forward to deduct from future tax years until all of your contributions are fully subtracted from your state taxable income.

    Ask For Gifts Towards A College Education

    For your child’s high school graduation party, their birthday, or the holidays, you can ask for gifts towards their college education. You can provide loved ones a Ugift code for your child’s account. This code permits others to make online contributions to your CollegeAdvantage Direct 529 plan account without needing the actual account number. Once you provide the Ugift code, friends and family can visit Ugift529.com​ to make their electronic contribution securely from their bank account.

    If the gift giver prefers to write a check, make sure it’s payable to Ohio Tuition Trust Authority and includes the 11-digit account number.

    If you or another family member would like to make a substantial 529 plan contribution, you can invest up to $1​5,000 ($​30,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. You can even contribute up to $75,000 per beneficiary in a single year ($150,000 for married couples) and take advantage of five years’ worth of tax-free gifts at one time. For more information, please consult your tax adviser or estate-planning attorney.

    Any Ohioan who donates to a CollegeAdvantage 529 account is eligible to deduct the contribution from their Ohio state taxable income.

    Shop With Upromise To Add To Your 529 Account

    After you’ve opened a CollegeAdvantage Direct 529 account, you can continue to add to the plan with your everyday shopping by joining Upromise. Connected with hundreds of America’s leading companies, a free Upromise membership can earn you cash back from stores from which you normally shop, including over 850 online retail stores and over 20,000 grocery and drug stores.  

    When you connect your debit and/or credit card to Upromise, you’ll start to earn rewards with your everyday shopping. Once you reach a certain level of savings, you can then roll over these rebates to build up your CollegeAdvantage Direct 529 plan.

    Would you like to see how others used Upromise? Read this Saving Story from a CollegeAdvantage family who used it to add to their 529 savings.

    Online Tools And Life Stage Strategies

    ​Ohio's 529 Plan offers online tools to help you decide what saving strategy is the best fit for your family. The calculators include: College Savings Planner, Cost Of Waiting Tool, and Risk Tolerance Questionnaire. By working with these four tools, you can adjust the 529 account according to your college savings goals, time frame before college, and how comfortable you are with risk to determine the right asset allocation mix.

    Based on your child’s age, different 529 investment plan strategies should be considered. If they are close to needing the 529 account funds for college costs, you may want to adopt a more conservative asset allocation so the accrued funds aren’t susceptible to the volatility of the stock market.

    Ohio’s 529 Plan Can Be Used Across The Nation

    Your child may already know what school they’d like to attend. If they decide to go out of state, your college savings in Ohio’s 529 Plan can be used nationwide at any federally accredited educational institutions – whether for an associate, bachelor’s, graduate or vocational degree. So remember: just because you save in Ohio’s 529 plan does not mean your child can only attend a post-secondary education program in Ohio.

    Rolling Over Funds To A 529 Plan

    If you open an Ohio 529 Plan account with money transferred from another savings vehicle, please wait 4-7 business days before attempting to withdraw the newly deposited funds. This waiting period allows the money to clear the old account then to accumulate into the new 529 account. This time frame also holds true after you’ve made a 529 contribution: you’ll need to wait 4-7 business days before requesting the funds to pay for qualified college costs.

    Once this waiting period is over, you can make payments directly to the school from your 529 account via an online withdrawal process. Or you can reimburse yourself for qualified expenses that you’ve paid out of pocket.

    Even if you are getting late start with your college savings, CollegeAdvantage is how forward-thinking parents make college doable. Start your tax-advantaged college savings plan today at CollegeAdvantage.com. Ohio’s 529 Plan is an excellent alternative solution to student loan debt. Any funds you can set aside in a CollegeAdvantage account is money your child won’t have to borrow for their education. And that’s truly a gift. CollegeAdvantage is your plan, your way. 

  • Save For College Before Your Child Is Born

    by Amy Lyle | Apr 27, 2018

    We hear congratulations are due! What an exciting time for your growing family! As you’re waiting for your bundle of joy to arrive, there are steps you can take right now to secure their future, saving for their college costs in a 529 plan. Ohio’s 529 Plan, CollegeAdvantage, is here to help you reach your savings goal.

    Open A 529 Account Before Their Birth

    Did you know that you can establish a 529 college savings plan for your child before they’re even born? It’s simple. Every 529 account has an account owner, usually a parent, and the beneficiary, usually the child. To be named as the beneficiary, your child must have a Social Security number. Until that time, you can open a 529 plan and designate yourself as the owner and beneficiary. This way, you can contribute to your child’s future college plans before they even arrive. Once you have your baby’s Social Security number, you can easily change the account to make them the beneficiary.

    Baby Showers: Ask For The Gift Of College

    There will be many showers to celebrate the impending arrival for your baby. And there are many items you will need for your child. However, why not ask for the gift of college at these festivities? Loved ones want to give presents that have significance and what gift can last longer than a college education or technical training? A 529 gift contribution lasts a lifetime.

    Ohio’s 529 Plan has teamed up with Ugift to make receiving gift contributions simple. As the account owner of a CollegeAdvantage Direct 529 Plan, you can request a unique Ugift code, which allows the gift givers to donate online directly to your 529 plan without needing the account number. Gift givers use the Ugift code to contribute to the account at any time and as many times as they like.

    If the gift giver would prefer to write a check, make sure it’s payable to Ohio Tuition Trust Authority (the state agency which administers CollegeAdvantage) and includes your child’s CollegeAdvantage Direct Plan 11-digit account number.

    What if a loved one wants to jump-start your child’s college fund? Per federal 529 laws, an individual can give up to $15,000 or a married couple give $30,000 to each child annually without triggering a federal gift tax. Single filers can also make a one-time $75,000 contribution and married couples can give $150,000 per child to take advantage of five-year’s worth of tax-free gifts at one time. For more information, have them talk with their tax adviser or estate-planning attorney.

    Ohio gift givers also receive a tax break. For Ohio residents, contributions to CollegeAdvantage can be deducted from their Ohio taxable income in any amount up to $4,000 per year, per beneficiary, with unlimited carry forward. Therefore, their gift of college savings not only helps your child but it can help them, too.

    Necessary Nesting Needs For Your Newborn

    Car seats. Cribs. Baby bouncers. Baby clothes. Bottles. Baby shampoo. Diapers. Oh so many diapers. And the list goes on and on. When you are starting to buy all the needed items for your baby, shop with Upromise, a free loyalty program that offers its members cash back for their purchases from a wide variety of businesses. Participating partners include over 850 online retail stores from which Upromise members can earn 5% cash back. Others organizations include over 20,000 grocery and drug stores, where you can earn money back for your everyday purchases as well as earn additional eCoupon rebates.  

    When you connect your debit and/or credit card to your Upromise account, you can start earning rewards with your everyday shopping. By linking your Upromise account to your CollegeAdvantage Direct 529 Plan account, you can roll over these rebates to build up your 529 plan.

    Would you like to see how others used Upromise? Read this Saving Story from a CollegeAdvantage family who used it to add to their 529 savings.

    Compound Interest

    One of the reason to start a 529 college savings fund as early as possible for your child is to take full advantage of the power of compound interest. Compound interest is interest gained on contributions, earnings, and interest already accumulated in the 529 account. It’s one of the most dynamic tool to grow a 529 plan. The longer a college savings plan has time to develop, the longer compound interest can add the 529 account. Also, one of the tax benefit of investing in a 529 plan is tax-free earnings so every dollar of investment growth is yours to use, tax-free.

    While compound interest in a 529 college saving plan is a huge advantage, compound interest with student loans is a huge disadvantage. This is why 529 plans are a great alternative to student loan debt, which currently stands at $1.3 trillion held by 44 million borrowers in America. Saving now for your child’s post-secondary education or training is far cheaper than paying off student loans debt later in life.

    The Cost Of Waiting To Save For College

    Compound interest is essential for account growth; this is why we encourage you to start saving as soon as possible. However, it is never too late or too soon to start saving for your child’s future college cost. Ohio’s 529 Plan is here to help wherever you are on the saving path. CollegeAdvantage offer a Cost Of Waiting Tool, which can show what a difference saving early can make to the account.

    Long-Term 529 Investment Performance

    Another crucial component for growth in a 529 college savings account is its long-term investment performance. Saving​for​college.com provides unbiased research on 529 plans, financial aid, and scholarships as well as analyzes and rank the performance of the nation’s 529 plans on a quarterly basis. Ohio’s 529 Plan, CollegeAdvantage, consistently receives high marks for its long-term investment performance.

    As of ​June 3​0, 2017, CollegeAdvantage Direct 529 Plan is again ranked first across the nation for the best performance in five-year category. The Direct Plan ranked fourth overall in the nation in the three-year performance. In the ten-year performance category, the Direct Plan ​is now ranked second across the nation.

    Morningstar also highly regards CollegeAdvantage, giving Ohio’s 529 Direct Plan a silver ranking in 2016, making it one of the top 13 529 plans out of 63 reviewed. According to their analyst’s report, “Thanks to low fees and an impressive investment lineup, Ohio's direct-sold CollegeAdvantage plan remains a top choice for residents and nonresidents alike.” Additionally, the report states, “Results generally look attractive, with the majority of plan options earning 4 or 5 star ratings. Tax benefits create further incentive for Ohioans, as contributors can deduct up to $2,000 per beneficiary from their taxable income. The plethora of options may also appeal to out of state do-it-yourselfers.”

    Age-Based 529 Investment Options

    CollegeAdvantage offer a wealth of 529 investment options, from leading investment managers VanguardDimensional Fund Advisors, and Fifth Third Bank. The investments include ready-made age-based portfolios. This investment option is simple to use for each portfolio’s asset mix and allocations are pre-determined. Additionally, risk is automatically reduced as your child gets closer to college age.

    Not sure what investment options fit your investment personality best? Answer our risk tolerance questionnaire to determine with which asset allocation mix you would be most comfortable – conservative, moderate, or aggressive.

    529 Plan Tax Benefits

    So why use 529 plans to save for college? These accounts offer tax advantages other savings options don’t have, such as:

    • Tax-free earnings. A regular savings account will have taxes assessed yearly but a 529 investment plan grows tax-free at the federal and state level.
    • Tax-free withdrawals. Funds withdrawn from 529 plans are tax free when used for qualified higher education expenses — the necessary costs for enrollment or attendance at an eligible education institution like: tuition, mandatory fees, computer equipment to name a few.
    • State income tax deduction for contributions to Ohio’s 529 Plan. Effective Jan.1, 2018, Ohio residents can currently deduct 529 contributions up to $4,000 per beneficiary, per year from their state income tax. However, with unlimited carry forward, ​Ohio residents can continue to deduct a large 529 plan contribution from ​their state income tax until all of it has been deducted. For instance, if they contribute $12,000 to your beneficiary’s account, they can deduct $4,000 from ​their state income tax for the next ​three years.

    Ohio’s 529 Plan Can Be Used Nationwide

    And don’t worry; you don’t need to know where your baby will want to go to college when you’re using Ohio’s 529 College Savings Plan. CollegeAdvantage 529 account can be used at any two-year, four-year, graduate or technical schools nationwide (even some overseas) that accepts federal financial aid.

    Open a CollegeAdvantage before your child is born to plan to save for their future training and education. This way, the college savings account can grow from the maximum impact of compound interest and 529 tax advantages. 529 accounts are an excellent alternative to student loan debt. CollegeAdvantage is your plan, your way. 

  • What Are The Tax Advantages Of Ohio's 529 Plan?

    by Amy Lyle | Apr 24, 2018

    When thinking of your child’s future, you understand that a key to starting a successful career is a post-secondary education. Whether it’s a two-year, four-year, graduate, technical, or professional degree, you know it would be best to start saving now to decrease student debt later. As you research tips for how to save for college, you may keep coming across 529 plans and wonder, “What is a 529 plan?”

    Ohio's 529 ​Plan, CollegeAdvantage, was established by Section 529 of the Internal Revenue Code to encourage parents to save their children’s future ​higher education costs in a tax-advantaged manner. CollegeAdvantage is Ohio’s 529 college savings program. The tax benefits of opening a CollegeAdvantage Direct 529 Plan account are:

    1. Tax-free earnings
    2. Tax-free withdrawals
    3. State of Ohio tax deduction (for residents of Ohio only)



    1) Tax-free earnings 


    Fact1

    All of the money you contribute to a CollegeAdvantage 529 ​Plan will grow tax-free and you can withdraw all earnings tax-free, provided that the account is used for qualified higher education expenses. To see just how tax-free growth adds up with a 529 savings plan, use the tax benefit tool and immediately see the difference between a 529 plan account in comparison to a taxable account. Unlike a taxable account, a ​Ohio's 529 ​Plan ensures that every bit of investment growth is yours to use, tax-free. CollegeAdvantage has additional aids to help you set or adjust your college savings goals. If you’re curious about how much you’ll need to save or you want to double-check your risk tolerance, use these tools to gain better insights and to get questions answered. As you research, always remember that time is your best friend. Over time, every amount contributed, big or small, will help you reach your savings goal. 


    2) Tax-free withdrawals
      
    Fact2

    Not only does your CollegeAdvantage 529 plan grow tax-free, it also remains tax-free when the withdrawals are used for qualified higher education expenses. These expenses must be for eligible education institutions that have a Federal School Code through the Free Application for Federal Student Aid (FAFSA). The definition of a 529-qualified higher education expense is broad and includes many major costs, including: tuition, room and board costs during any academic period the beneficiary is enrolled at least half-time, computer equipment and related technology and services, mandatory fees, books, supplies, any equipment required for enrollment or attendance, and certain expenses for special-need students.

    Some of the costs that are not qualified as higher education expenses include: Transportation costs, insurance, fees and equipment which are not required for enrollment, parking tickets, library fines, and payment for student loans.

    To help create even more benefits to opening a college savings account, the U.S. Congress passed the Protecting Americans from Tax Hikes (PATH Act) of 2015. Signed by the president, this law allowed the sole account beneficiary enrolled in college to use their 529 account toward computers, educational software, and related expenses. Entertainment software, including gaming systems, do not qualify.


    3) State of Ohio tax deduction 

    graph--tax-break

    If you are an Ohio taxpayer, contributions to CollegeAdvantage may be deducted from your Ohio taxable income in any amount up to $​4,000 per year, per beneficiary, with unlimited carry forward. This means that $​4,000 per year is not a contribution cap.  Should you choose to contribute more than $​4,000 in a calendar year, any amounts above $4,000 may be deducted in future years, in increments up to $4,000 per year, until all contributions have been deducted. If you have an Ohio College Advantage 529 accounts for each of your children, you receive the deduction to your Ohio taxable income for contributions made to each beneficiary’s account. Non-account owners who are Ohio taxpayers qualify for this tax deduction when they give gifts for college directly to CollegeAdvantage accounts.

    A bottom line benefit of a 529 plan? It’s far cheaper to save money and earn interest in an account now than pay off students loans with accumulated interest later. With all the tax benefits offered with a 529 plan, your account can grow to reach your college savings goal. If you’ve made it this far and don’t have a CollegeAdvantage account, we have a tool to help you see how just how much it costs to wait to save for college. 

  • 529 Facts For Financial Literacy Month

    by Amy Lyle | Apr 20, 2018

    April is designated Financial Literacy Month. When you’re thinking of saving for your children’s future higher education costs, there’s a lot of information to sort through. To help, Ohio’s 529 Plan, CollegeAdvantage, answers the most frequently asked questions about these tax-advantaged college savings programs.

    529 plans can be used nationwide

    Just because you are placing your college savings in Ohio’s 529 Plan, CollegeAdvantage, that doesn’t mean your child must attend a post-secondary school in Ohio. The funds in your 529 account can be used at any federally accredited institution nationwide. If the school has a Federal School Code on the Free Application for Federal Student Aid (FAFSA), then withdrawals for the qualified higher education expenses at that school will be tax free. 

    529 plans are not just for four-year programs

    529 plans are created to be used at any federally accredited educational institutions – whether for a two-year, four-year, graduate or professional degree, or any other post-secondary credential. This list includes community colleges, vocational or trade schools, graduate schools, and even some study-abroad programs.

    529 minimally affects financial aid

    When filling in FAFSA, the 529 account is considered an asset. When owned by a parent, the funds in a 529 plan are only assessed at a maximum of 5.64% of its value. For lower-income families, this percentage rate could be lower.

    Federal student aid is available in a variety of forms. Need-based federal financial aid is typically offered in the form of grants, loans or work-study. With Pell Grants, this aid given to a student will not have to be repaid. Federally subsidized student loans and parental loans must be repaid after college with interest by either the student or you. Work-study programs allow enrolled students to work part-time to earn money for some college costs. Make sure you understand what type of aid is being offered to see whether or not you will have to repay it with accrued interest.

    Another reason to fill out FAFSA: Other organizations — like states, universities, colleges, and private organizations — also use it to determine what institutional scholarships or loans to offer to students interested in attending their school.

    529 plans designed to work with scholarships

    Your Ohio’s 529 Plan account is still an important component of your college-saving strategy even if your child does earn a scholarship. Very few scholarships cover 100% of the costs; for instance, a scholarship may only cover the cost of tuition. A 529 plan is perfect for filling any gaps with other qualified expenses such as: room and board during any academic period the beneficiary is enrolled at least half-time; mandatory fees; computer equipment and related technology and services; books; supplies; and equipment required for enrollment or attendance; and certain expenses for a special-needs student.

    And if my child decides not to go to college?

    You always have access to the money you have saved in a 529 plan. Hold onto to the account to see if your child rethinks the decision. There are no time limits for when a 529 account must be used. Let the 529 plan sit and watch the tax-free earnings continue to grow. If not, you can transfer the funds to any member of the family of your beneficiary, including yourself, without any tax consequences.

    What are the tax benefits of 529 college savings plans

    First, all earnings in a 529 plan are tax-free, so all investment growth is yours to spend on higher education costs. To see how tax-free growth can build your 529 account, use the tax benefit tool to see how the funds in a 529 grow compared to a taxable savings account.

    Second, 529 plan withdrawals to pay for qualified higher education expenses are tax-free at federally accredited programs. 

    Third, Ohio offers deductions from taxable state income to in-state residents who contribute to the Ohio’s 529 Plan. Effective Jan. 1, 2018, Ohio’s state tax deduction was doubled to $4,000 per year, per beneficiary, with unlimited carry forward. Unlimited carry forward means that $4,000 is not an annual contribution cap. As an Ohioan, if you contribute more than $4,000 in one year, you can continue to subtract $4,000 per year, per beneficiary, from your State of Ohio taxable income until all the 529 contributions are deducted.

    Open an Ohio 529 Plan today to start saving for your children’s future higher education costs. Every dollar saved today is a dollar that doesn’t have to be borrowed which makes a 529 college savings plan an excellent alternative to student loan debt. If you need help determining how much to put aside each month to reach your college savings goal, fill in the College Savings Planner to receive personalized saving estimate. Please note that this is an example for illustrative purposes only. For additional advice, consult with your legal, financial, tax, or other advisor.

    Ohio’s 529 Plan, CollegeAdvantage, is your plan, your way.

  • Let The Power Of Compound Interest Help Your 529 Plan Take Off

    by Amy Lyle | Apr 17, 2018

    If you’ve been to the movies, or watched a multitude of TV series recently, you’ve seen many, many superhero stories. These champions always stretch themselves to overcome obstacles and to come to others’ aid. There’s a superhero in the financial world as well, a college savings superhero – compound interest. Its super powers can really make your Ohio 529 college savings plan soar!

    Able to leap over simple interest in a single bound, compound interest is dynamic powerhouse that can grow a 529 account. Here’s how.

    Simple interest vs. compound interest

    Simple interest is the interest on the principal only. Compound interest is the interest on the principal as well as any other accrued interest. For Ohio’s 529 Plan, CollegeAdvantage, compound interest is accumulated on the original as well as any additional 529 contributions, any earnings from the 529 investment options, and any accrued interest.

    For sake of simplicity, let’s use the same numbers to create examples for a college savings account with simple interest and one with compound interest. You have contributed $10,000 to a 529 plan. The principal — or the original contribution — could grow at 5% over the next 5 years. With these examples set, we can contrast the total interest accumulated in a simple interest account to a compound interest account.

    With the simple interest example, the original contribution of $10,000 with 5% will earn $500 in interest each year. Over five years, the account will total $2,500 in a simple interest account.  

    With compound interest example, the original contribution of $10,000 could earn 5% for a total of $500 in interest in the first year. In the second year with compound interest, the new starting point includes the interest from the first year added to the original contribution for a total of $10,500. With 5% interest, the total interest in the second year would be $525. In the third year, the new opening amount could be $11,025, which could grow an additional $551.25 assuming 5% interest. For the fourth year, the starting amount in the example is $11,576.25. At the end of the year assuming 5% interest, the amount could grow by $578.81. In the fifth year of this example, we have an opening amount is $12,155.06. Assuming 5% interest, the account could grow by $607.75. So over five years in this scenarios, the compound interest account could grow to $2,762.81.

    So, the compound interest account could earn an additional $262.81 over five years in this scenario when compared to the simple interest account. And who wouldn’t like to have those extra funds in their 529 account as they prepare to cover their student’s future higher education costs?

    Compound interest with a 529 plan

    For a 529 college savings plan, the compound interest is accrued not just on the original contribution but every contribution as well as the earnings from the 529 investment options and the already accumulated interest.

    If you’d like to see the power of compound interest, use this calculator from U.S. Securities and Exchange Commission to input your information to see how compound interest can build up your college savings account.

    The effect of compounding is especially powerful over a long period of time as the amount of earned interest grows larger and larger. This is an excellent reason to start as 529 fund as early as possible for your child – to maximize the effects of compound interest in the account. Whether you’ve started saving for your child’s higher education before they are born or if you are getting a later start, Ohio’s 529 Plan, CollegeAdvantage, offers account strategy suggestions based on your child’s age. These life milestones are the perfect opportunity to start, ramp up your saving, and take advantage of Ugift and Upromise. Based on your child’s age — baby to toddler, kindergarten to elementary school, middle school, high school, and college — review the appropriate guidance and choose for yourself the best path for your 529 account.

    Loans: Where compound interest can become a villain

    In a 529 plan, compound interest works for your best interests. On the flip side, accrued interest on a student loan debt can set back financial success as the interest will grow on the amount borrowed as well as unpaid accumulated interest. Taking into the consideration of the above simple vs compound interest example, imagine how accrued compound interest on a loan can accumulate. So it’s never too late or too early to start saving for your child’s future higher education costs. Any funds you can set aside in a 529 account is money your child won’t have to borrow for their education.

    Additional tax benefits for saving in a 529 plan

    Ohio’s 529 Plan, CollegeAdvantage, was established by Section 529 of the Internal Revenue Code to encourage parents to save their children’s future higher education costs in a tax-advantaged manner. The tax benefits of a CollegeAdvantage Direct 529 Plan account are:

    1. All earnings in a 529 plan are tax-free, so all investment growth is yours to cover college costs.
    2. 529 plan withdrawals to cover qualified higher education expenses are tax-free at federally accredited programs. These expenditures include tuition; room and board (on and off campus) when the beneficiary is enrolled at least half-time; mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and classes; and certain expenses for a special-needs student.
    3. Ohio residents who contribute to Ohio’s 529 Plan, CollegeAdvantage, can deduct their contributions from their taxable state income. Effective Jan. 1, the deduction amount is $4,000 per year, per beneficiary, with unlimited carry forward. However, $4,000 is not a contribution cap. If an Ohio taxpayer contributes more than $4,000 in one year, they can continue to subtract $4,000 per year, per beneficiary, from their State of Ohio taxable income until all the 529 contributions are deducted.

    Ohio’s 529 Plan Tools and calculators

    Want to crunch the numbers yourself? CollegeAdvantage has its own tools and calculators to see how your 529 savings can add up. With the college savings planner, you can input your own figures to receive an estimated monthly savings amount needed to reach your savings goals. Use this tool to vary the amounts of monthly contributions to see how setting aside a little more money can really add up. The tax benefit tool can illustrate how the tax benefits of a 529 plan can build the account when compared to a taxable savings account. The cost of waiting tool can determine how much more money you’ll need to save to reach your college savings goals if you aren’t able to maximize the power of compound interest. Your asset allocation strategy is one of the most important investment decisions to make. If you aren’t sure what level of risk you’re willing to take in your investment strategy, the risk tolerance questionnaire can determine your comfort level.

    Continue to be your child’s superhero; open an Ohio’s 529 Plan account for them today for their future higher education costs. An investment in a 529 plan is an investment in your child. Every dollar saved today is a dollar that doesn’t have to be borrowed which makes Ohio’s 529 college savings plan an excellent alternative to student loan debt. Ohio’s 529 Plan, CollegeAdvantage, is your plan, your way.

  • Fifth Third Raises 529 CD Rates Again

    by Amy Lyle | Apr 13, 2018

    Fifth Third Bank, an investment option partner with Ohio’s 529 Plan, ​has increas​ed the rates on five terms of 529 Certificates of Deposit (CDs) as of Thursday, April ​12, 201​​8. Fifth Third Bank is a member of the FDIC.

    cd-apys-as-of-04-5-2018-chartThe rate for the 6-11 Month 529 CD will be raised from 1.00% Annual Percentage Yield (APY) to 1.50%, an increase of 0.50%. The interest rate for 12-23 Month 529 CD will increase from 1.25% APY to 1.70% APY, an increase of 0.45%. For the 24-35 Month 529 CD, the rate will increase from 1.55% APY to 2.00% APY, an increase of 0.45%. The APY for the 36-47 Month CD will rise from 1.65% to 2.00% for an increase of 0.35%. The increased rate for the 48-59 Month CD is now 2.00%, up from 1.75% for an increase of 0.25%.

    This is the fourth time in less than a year that Fifth Third has increased the 529 CD rates; the other times were in January 2018, October 2017, and August 2017.

    If your student is starting their higher education soon and you want to be more conservative in your 529 saving plan, you have options. The minimum contribution to add a CD to your 529 investments is $500. Current CollegeAdvantage Direct 529 Plan account owners can purchase a CD online. Log in in to your Direct Plan account and make a one-time electronic contribution from your bank account to buy a CD. After logging in, you can also go to “Change Your Investment Options” section to exchange a current investment with a $500 minimum to buy a CD. You can also download an Additional Contribution Form and mail it with a check to purchase a CD.

    Once the CD reaches maturity, the balance will transfer to a Fifth Third 529 Savings Account. At this point, you can withdraw the funds, exchange the funds to another Fifth Third 529 CD, or to other CollegeAdvantage investment options, or leave the money in the savings account to earn interest. Please remember that federal regulations for qualified 529 programs limit the number of times account owners can reallocate investment options for the same beneficiary. The 529 account owner is allowed to make two exchanges of assets from one investment option to another per calendar year, per beneficiary. Please refer to the CollegeAdvantage Direct Plan Offering Statement and Participation Agreement for additional details.

    If the 529 CD is liquidated prior to its date of maturity, there are penalties assessed. Both the Fifth Third 529 Savings Account and the Fifth Third 529 CDs are FDIC-insured investment options.

    Go here to purchase a CD with these higher interest rates and start saving for your child’s future higher education expenses today! If you haven’t opened a CollegeAdvantage Direct 529 Plan, it’s easy to enroll online and purchase a Fifth Third 529 CD at that time. Ohio’s 529 Plan, CollegeAdvantage, has tools to help you determine how much to save for future college costs as well as to see the cost of waiting to save. Remember, it’s far cheaper to save for college now and earn interest in an 529 account than pay off students loans with accumulated interest later. CollegeAdvantage is your plan, your way.

  • Blue Jackets & CollegeAdvantage College Savings Assist Winners Announced!

    by Amy Lyle | Apr 11, 2018

    CollegeAdvantage's first College Savings Assist Giveaway with the Columbus Blue Jackets ended recently. This giveaway ran from Feb. 26 to March 25, 2018. During that time, we received almost 14,500 entries!

    Our grand prize winner, TJ Woods, won the $10,000 college savings award! TJ and his family were presented the award Tuesday, April 3, 2018, during the Blue Jackets victory over the Detroit Red Wings. He plans to use the college savings award to add to his three children’s CollegeAdvantage 529 accounts.

    The second-place winner, Robert Stalter, is the lucky winner of a visit from Stinger to an area school.

    Eight runners-up will receive autographed Blue Jackets memorabilia.

    Here’s the list of the 10 lucky people who were randomly selected as winners:

    Grand prize winner: TJ Woods

    Second place winner: Robert Stalter

    Runners-Up: Autographed Blue Jackets Memorabilia*

    • Archie Zantopulos
    • Kelley Paul
    • Chris Bata
    • Kira Redinger
    • Alan Scaia
    • Patrick Newton
    • Donald Parks
    • Kristin Bailey

    Congratulations to all our winners! Thank you to everyone who participated, and good luck to the Blue Jackets in the Stanley Cup Playoffs!

    Please note that the list of winners is subject to change.

  • Do 529 Plans Affect Financial Aid? No!

    by Amy Lyle | Apr 09, 2018

    You contributed to your Ohio’s 529 Plan account for years, starting early to take advantage of the CollegeAdvantage 529 tax benefits as well as the power of compound interest. Now, your child is now finishing high school and wants to continue their education, whether at an accredited two-year, four-year, graduate or professional, or any other post-secondary schools that accepts federal financial aid.

    Your next step is to submit the Free Application of Federal Student Aid (FASFA) to see if your child qualifies for federal student aid. As you’re reporting your 529 plan as an asset on FASFA, you wonder, “Are all my years of saving for college going to negatively affect our chances of receiving financial aid?” The answer is, “No”, according to a recent study by the Center for Social Development at Washington University in St. Louis. Here’s why.

    Federal and state financial aid

    Federal student aid is available in a variety of forms, typically offered in the form of grants, loans or work-study. With Pell Grants, this aid given to a student will not have to be repaid. Federally subsidized student loans and parental loans must be repaid after college with interest by either the student or you. Work-study programs allow enrolled students to work part-time to earn money for some college costs. Make sure you understand what type of aid is being offered to see whether or not you will have to repay it with accrued interest.

    Other organizations — like states, universities, colleges, and private organizations —also use the FAFSA to determine what institutional grants or loans to offer to students interested in attending their school.

    Expected Family Contribution (EFC)

    You will need to submit what your incomes and assets are as well as your student’s assets and income on the FAFSA. This information is added to a formula to determine your Expected Family Contribution (EFC). The EFC represents what a family can expect to cover for higher education expenses. The difference between the total cost of enrollment and the EFC represents the remaining amount that may subsidized through federal student aid, based on need.

    Income and assets are the largest component of the EFC formula. There are income allowances for basic living expenses, taxes, and family size; this equation will weigh parental income on a sliding scale of 22 - 47%. Students’ income will be assessed at 50%, except for two exclusions found in the simplified EFC formula and automatic zero EFC. The next part of the EFC formula is assets. There are many exclusions and allowances in this part of the equation.

    Simplified EFC formula

    If you and your spouse make less than $50,00 in adjusted gross income and also 1) have received federal public assistance in the previous two years; or 2) have filed a1040a or 1040EZ; or 3) are considered a dislocated worker, then your child qualifies for the simplified EFC formula. With this equation, your and student’s assets are not used to formulate the EFC.

    Automatic zero EFC

    If you and your spouse’s income is under $25,000, then your child is qualified for the automatic zero EFC. This sets your family’s income contribution in the EFC formula to zero, and as well as the assets. Your child’s assets also will not be included in determining the EFC.

    With these two provisions, the students who need the most need-based financial aid will not have their parents’ income and assets, as well as their own, counted in their EFC. This increases their monetary assistance funding.

    Additional EFC exclusions

    For families who don’t qualify for the simplified EFC or automatic zero EFC formulas, there are additional EFC exclusions for savings that are held in qualified retirement assets, such as 401(k)s and IRAs; home equity; family businesses; and insurance annuities.

    Allowances for college savings and asset protection

    Lastly, if you have been setting aside asset protection reserves, like an emergency fund, and savings for your children’s college educations— in 529 plans and other savings vehicles, there’s an allowance up to certain level of savings. This allowance will increase as your age increase.

    All the exclusions and allowances greatly reduce the impact that parental assets have on receiving financial aid.

    Remaining assets

    If there are any assets you own that are not listed in these provisions, only a small percentage of it will be included in the EFC. The assets can calculated up to the maximum of 5.64% of its value. For lower-income families, this percentage rate will be lower.

    Center for Social Development’s study shows that with the simplified EFC and automatic zero EFC formulas and the additional exclusions for certain parent-owned assets, then the low​- and moderate-income families who need federal and state financial aid will not penalized for taking steps to save for college expenses.

    Saving for college is a forward-thinking action plan. Your 529 plan has a minimal effect on federal and state financial aid. There are additional tax benefits for saving in a 529 account for your child’s future college costs. With investing in a 529 college savings plan, all of the money you contribute will grow tax-free and you can withdraw all earnings tax-free, provided that the account is used for qualified higher education expenses. When investing in Ohio’s 529 Plan, residents of Ohio receive an additional tax advantage of deducting their 529 plan contributions to CollegeAdvantage from their taxable state income in any amount up to $​4,000 per year, per beneficiary, with unlimited carry forward. This means that $​4,000 per year is not a contribution cap. Should you choose to contribute more than $4,000 in a calendar year, any amounts above $2,000 may be deducted in future years, in increments up to $2,000 per year, until all contributions have been deducted.

    If you have a 529 account, keep on saving. The funds you’re investing today to cover their future college costs is an investment in your child. And remember, your 529 plan will have a minimal effect on their chances of receiving need-based federal financial aid.

    If you haven’t started saving in 529 account, Ohio’s 529 Plan offers calculators and tools to build a 529 plan that best fits you and your beneficiary’s needs. CollegeAdvantage also provides 529 account strategies designated by life stages. The CollegeAdvantage Direct Plan offers a variety of investment options including ready-made, age-based or ready-made, risk-based portfolios.

    Open a CollegeAdvantage 529 plan to save for your child’s future training and education. 529 accounts are an excellent alternative to student loan debt. CollegeAdvantage is your plan, your way.

  • Fact: Multiple 529 Plans Work Best For Multiple Kids

    by Amy Lyle | Apr 05, 2018

    Families with more than one child may wonder if they need more than one 529 plan to save for their children’s future college costs. While it’s not necessary, the benefits of a 529 plan customarily can be amplified best if each child has their own 529 account. Why? Here are a few reasons.

    Maximize All The Tax Benefits Of Ohio’s 529 Plan

    529 plans allow for college savings to grow in a tax-advantaged manner. Separate 529 plans for each child would maximize these benefits which include tax-free contributions and earnings and tax-free withdrawals when used to pay qualified higher education expenses.

    For Ohio residents with an Ohio's 529 Plan, CollegeAdvantage, account, there’s an additional tax advantage. Ohioans can deduct their 529 contributions from their Ohio taxable income, up to $​4,000 per year, per beneficiary, with unlimited carry forward. In other words, an Ohio resident can take up to a $​4,000 deduction ​from their state income taxes for each 529 plan with a different beneficiary. So if an Ohioan account owner has three Ohio 529 plans for three children, they can maximize this tax benefit up to $​12,000 per year. Because of the unlimited carry forward for the state income tax deduction, it means that $​4,000 per year is not a contribution cap. The taxpayer can continue to subtract $4,000 per year, per beneficiary, from their Ohio taxable income until all the Ohio 529 Plan contributions have been deducted.

    Take Advantage Of 529 Plans Tax-Free Withdrawals

    To open a 529 college savings plan, it’s started by one account owner for one beneficiary. A family can choose to have only one 529 account which contains all the college savings for their children; however, only the named beneficiary will be able to take advantage of tax-free withdrawals from the 529 account to cover their qualified higher education expenses. For the other non-beneficiary children whose funds are included in the same account, any account distributions made for their college costs would be subject to a 10% federal penalty as well as federal, state, and local taxes. In addition, these funds could only be sent to the account owner or the named beneficiary in these circumstances. The 529 withdrawal cannot be directly sent to the school for an individual that is not the named beneficiary.

    With Ohio’s 529 Plan, CollegeAdvantage, there is no fee to open a Direct 529 Plan account or multiple Direct 529 Plan accounts so families don’t have to pay first to start saving for college.

    Follow Different 529 Investment Plans For Different Ages

    Based on a child’s age, different 529 investment plan strategies should be considered. For instance, if a child still has a long time before attending college, then a 529 plan could include a more aggressive asset allocation, in order to potentially reap higher returns with the increased risk. Additionally, the longer the time period before college, the longer the 529 account can grow with the power of compound interest. On the flip side, if a child is close to needing the 529 account funds for college costs, then a more conservative asset allocation can be adopted so the accrued funds aren’t susceptible to the volatility of the stock market. However, if all the college savings funds for multiple children are kept in a single 529 plan, it may be difficult to modify the investment risk in the account according to the age of each child.

    Ohio's 529 Plan, CollegeAdvantage offers ready-made age-based portfolios as well as ready-made risk-based portfolios to tailor a 529 college savings plan to the individual needs of the beneficiary.

    Benefit From Gift Tax Rules

    Individual 529 accounts for each child also allow family members to maximize federal gift tax benefits. 529 plan contributions are considered gifts to the beneficiary. Per federal 529 laws, individuals can invest up to $1​5,000 ($​30,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. Additionally, an individual can even contribute up to $7​5,000 per beneficiary in a single year ($1​50,000 for married couples) and take advantage of five years’ worth of tax-free gifts at one time. By having multiple accounts for multiple children, an account owner can avoid triggering the federal gift tax. For grandparents who are considering gift tax implications ​while evaluating their estate planning, 529 plans can be smart way to insure that a gift is used for a highly valuable asset — a college education with the least amount of student loan debt. For further information, consult a tax adviser or estate-planning attorney.

    Lessen The Impact On Financial Aid

    529 plans are considered an asset when filing the Free Application for Federal Student Aid and are a component in determining the Expected Family Contribution (EFC). The EFC represents what a family can be expected to cover for higher education expenses. The difference between the total cost of enrollment and the EFC represents the remaining costs that might be subsidized through need-based federal student aid. Current federal guidelines state that if a student is a dependent and the 529 account is owned by a parent, then the 529 plan account will be considered the parent’s asset and will be calculated up to 5.64% of its value when determining the EFC. Pooling college savings for multiple children in one 529 plan will make this account bigger; therefore, it will have a larger impact on EFC. By spreading the college savings through multiple 529 accounts for each child, the asset will be smaller and have a smaller effect on the EFC.

    Easy Transfer Of 529 Funds

    Another benefit of having multiple 529 accounts for multiple children is the ease of transference of the funds from an individual 529 account. If a child finishes their post-secondary education without using all the funds in a 529 plan, the account owner has the option of changing the current beneficiary to another member of the family. The 529 funds already set aside for one child’s college expenses can readily be used by another. 

    By the way, saving for college in Ohio’s 529 plan does not mean that those funds can only be used in Ohio. 529 plans can be used nationwide (and even overseas) at any accredited two-year, four-year, graduate or professional, or any other post-secondary schools that accepts federal financial aid.

    Interested in opening an Ohio 529 plan? Visit CollegeAdvantage online to start saving for future college expenses today. Even small amounts can add up to big savings over time by saving regularly through automatic contributions or payroll deduction. And always, a 529 college savings plan is an excellent alternative to student loan debt. For a good overview on what is a 529 plan, visit SavingForCollege.com for a quick video. CollegeAdvantage is your plan, your way.

  • Learn About 529 Plans During Financial Literacy Month

    by Amy Lyle | Apr 02, 2018

    This story from our Executive Director, Tim Gorrell, originally ran March 27, 2017, on College Savings Plans Network (CSPN) website, collegesavings.org. As their website states, “the College Savings Plans Network (CSPN) was formed as an affiliate to the National Association of State Treasurers (NAST). Established to make higher education more attainable, the network serves as a clearinghouse for information among state-administered college savings programs. Additionally, CSPN monitors federal activities and promotes legislation that will positively affect Section 529 plans.”

    April Is Financial Literacy Month

    April has been designated Financial Literacy Month to focus on increasing the public’s comprehension of basic monetary concepts. Many banking institutions and credit union offer financial wellness seminars. Additionally, university extension offices may provide financial literacy classes. By doing a little research, people can find many free resources available to improve their understanding of how to best use, as well as save, their money.

    For the 529 college savings industry, progress has been made in educating the public about the abundant advantages of these college savings plans and it must continue.

    While student loan debt nationally has risen to $1.48 trillion, there has also been a marked increase over the past ten years in saving for college, which indicates a measure of thoughtful financial literacy. According to the Salle Mae report, “How America Saves For College 2017,” parents covered 31% of college costs. The report also found that families who use 529 college savings plans have saved more than other college savers. A takeaway from the report is people are learning about the added tax benefits and values of 529 college savings plans and are using them.

    Adults Can Use 529 Plans For Their Own Education

    There is still more for the public to understand about 529 plans, including one that many people don’t recognize – that 529 accounts aren’t just for children. If an adult would like to head back to college to finish their degree, hone their professional skills, or start a new career path, then they should consider opening a 529 college savings account for their own college expenses and tax benefits.

    Traditionally, 529s have been used to fund children’s future college costs; however, there are no age restrictions on who can use these college savings accounts and no time limits on when the account must be used. Furthermore, 529 plans were created to be used at any federally accredited educational institution, which includes two-year, four-year, graduate, professional or post-secondary degree programs. For working adults who want to continue their college education to advance their career, they should check with their human resource department to see if tuition reimbursement is a part of the employee benefits. This benefit combined with 529 savings could significantly reduce higher education costs.

    All the tax advantages associated with a child’s 529 account would also apply to an adult’s account. The 529 college savings plan will grow with tax-free earnings on contributions. Withdrawals from 529 plans are also tax free, provided the funds are used for qualified higher education expenses, which includes many large costs like tuition, mandatory fees, and computers. With Ohio's 529 Plan, CollegeAdvantage, Ohio residents can deduct up to $​4,000 from their state taxable income based on contributions made to 529 plans per beneficiary, per year. However, the $​4,000 is not a contribution cap. With unlimited carry forward, the Ohio taxpayer can continue to subtract to subtract $4,000 per year, per beneficiary, from their Ohio taxable income until all the 529 contributions have been deducted.

    An additional benefit to 529 plans: If there is money left over in a child’s plan, the account owner can transfer the remaining funds to the another child's or their own 529 account. No tax penalties will be accessed with the transfer as long as the new beneficiary is a family member. By rolling over these 529 plan assets, the account owner can use the money already set aside for college expenses for their own continuing education.

    People want to understand their finances and make informed fiscal decisions. As they learn more about the multiple benefits of 529 accounts, the use of these college savings plans will continue to grow.

    Consider opening an accou​nt with Ohio's 529 ​Plan to save for future ​higher education costs. Remember, 529 accounts are an excellent alternative to student loan debt. Go online learn more about College Advantage. The Ohio’s college saving program offers calculators and tools to estimate college savings goals, approximate the cost of waiting, determine risk tolerance, and compare the benefits of placing college savings in a tax-advantaged account. Additionally, CollegeAdvantage provides guidance on 529 account strategies by life stage. Partnered with leading investment managers VanguardDimensional Fund Advisors, and Fifth Third Bank, CollegeAdvantage Direct 529 Plan offers a variety of investment options to build a 529 plan that best fits the account owner’s needs. As always, CollegeAdvantage is your plan, your way. 

  • Can Others Contribute To A 529 Plan?

    by Amy Lyle | Mar 30, 2018

    You work hard to save money for your child’s future college costs. But did you know that there is more than one way to save in a CollegeAdvantage Direct 529 plan? You can visit the CollegeAdvantage Direct 529 plan website and follow the life stage guide to calculate the best ways to optimize your account​. You can also contribute to your tax return as well as add some disappearing expenses (i.e. costs that are in a family’s budget for a limited time span) to the account. Another way to benefit from contributing to a 529 plan is by joining Upromise. With this membership, you’re earning cash back as you shop online, dine out, fill your gas tank, buy groceries, book hotels, and more. By linking your Upromise account to your CollegeAdvantage Direct Plan, your earnings are automatically transferred on a periodic basis, subject to a $25 minimum. If you sign up for automatic recurring contributions, you could transfer money from your bank account to the Ohio 529 plan.

    After considering every potential option available when opening a 529, you may even begin to wonder how others can help contribute to your child’s 529 savings plan. For example, after celebrating your child’s first birthday, you may look around to find toys scattered, some of which haven’t even been used. This brings up the question: Is there a better way to celebrate this milestone? The answer: Yes. Instead of receiving unnecessary toys from family members, consider asking for the gift of college by having loved ones contribute to your child’s 529 plan.
    Fact_Post2CAnOthersContribute

    Family and friends want to give meaningful gifts for your child’s milestones. By asking them to consider gifts for college in lieu of gifts at baby showers, birthdays, holidays, graduations, and many other special occasions, your child’s future will only continue to benefit. The first, and easiest, option for CollegeAdvantage Direct 529 plan gift contributions is through Ugift. Ugift makes it easy for an account owner to set up a code which will authorize gift givers to donate directly to a 529 plan online without needing the actual account number. They can even check to make sure their electronic contribution is securely transferred from their bank account by visiting Ugift529.com. It's that easy. Once a gift giver has the code, they can continue to make one-time or recurring electronic gifts for college without fees. Plus, if the gift giver is an Ohio taxpayer, they can also deduct up to $​4,000 in contributions per beneficiary, per year, from their state taxable income. Their gift contribution must be made payable directly to the account, not to the child.

    Have gift givers who may prefer paying by check? Simply encourage them to write a check payable to the Ohio Tuition Trust Authority, rather than the beneficiary, and give them the 11-digit account number to add to the memo line. ​You can then mail it with an Additional Contribution Form to the listed address and it will be added to your CollegeAdvantage Direct 529 Plan account. Again, if the gift giver is a taxpayer in Ohio, they can deduct their own gift contributions from their state taxable income.

    Another option to consider? Having heart-to-heart conversations with your child’s grandparents. It has been shown that a large number of 529 plan gift givers are grandparents who place a high value on higher education. After you talk with them, they may wish to make a gift to your existing 529 plan or they may want to establish their own account for your child. As the account owner, the grandparents will oversee the account and determine when to make withdrawals to pay for your child’s higher education expenses. They also control transfers between accounts, which is especially flexible if there is a need to transfer surplus funds from one grandchild to another. Or they can transfer their 529 account funds into an account that you’ve already established as college approaches.

    Grandparents who are Ohio taxpayers can take the deduction from their state income tax for gift contributions to CollegeAdvantage accounts of up to $​4,000 in contributions per beneficiary, per year. Make sure that your grandparents are aware that there are gift tax considerations that may come into play depending on the amount of the gift contributions. The current annual gift tax exclusion is up to $1​5,000 per person to each beneficiary, per year, but that amount is inclusive of all gifts to a beneficiary, not just gifts to a 529 account. Additionally, your child’s grandparents can use 529 plans as part of their estate-planning strategy. As this is a complicated area of tax law and strategies vary from person to person, please have them consult with a tax or financial advisor for information on this option.

    As the next celebration approaches, when family and friends ask what they can give, encourage them to give the gift of college by contributing to your CollegeAdvantage Direct 529 Plan.

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