• Can Others Contribute To A 529 Plan?

    by Amy Lyle | Oct 21, 2016

    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.

    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 $2,000 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 $2,000 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 $14,000 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 future 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.

  • Sit, Stay, Or Rollover Your 529

    by Amy Lyle | Oct 19, 2016

    Whether you’ve moved from another state and want to take advantage of your new home’s state-tax deduction for 529 contributions, or you want to change to a lower-cost or currently better performing 529 plan (but as you know, past performance is not indicative of future results), you can roll over your previous 529 account to a new one. You are allowed one tax-free rollover in a 12-month period per beneficiary, according to federal tax law.

    Be aware: A 529 plan rollover that does not meet the 12-month time period per beneficiary will be considered a non-qualified withdrawal by the Internal Revenue Service (IRS); therefore, it will be subject to tax consequences. For instance, if another account owner rolls over a different 529 plan for your beneficiary in a 12-month period before you do, but you still choose to do the rollover, there will be federal, state, and local taxes assessed on the 529 account’s earnings as well as 10% federal tax penalty.

    Here at CollegeAdvantage, Ohio’s 529 Savings Program, we try to simplify this rollover process for you. As you start a new account, there is a section on the application which shows the choices for the contribution method. Along with more traditional means of funding the account, you have the option to select a direct or indirect rollover from another 529 plan.

    Direct rollovers involve the transfer of money from one 529 plan directly to another. To request a direct rollover from another 529 plan to your CollegeAdvantage one, complete an Incoming Rollover Form and send it in. CollegeAdvantage will request the funds from the other 529 plan. This form is also applicable if you are doing a rollover from Coverdell Education Savings Account (ESA). If you are rolling over from another 529 plan to CollegeAdvantage and you already have online account access, you have the ability to complete the form within your secure log-in and mail it directly to your other 529 plan. This will help to cut down on the time needed to mail then process your rollover. The steps to complete this process are quite simple. Once you are logged in, you select the account for which you want to complete the Incoming Rollover with CollegeAdvantage, and then you select the menu item called “Rollover from another 529.” The system will walk you through the remainder of the steps through the end of the process.

    Please note for direct rollovers, there are a number of requirements in order to process this type of transaction. The account owner and beneficiary on both 529 plans must match. In addition, the account type must be the same (Individual, UGMA/UTMA, Trust). 

    Indirect rollovers involve the transfer of money from an account in another state’s 529 plan to yourself, and then you would contribute the money to an account in the CollegeAdvantage Direct Plan. Indirect rollovers also apply to qualified U.S. Savings Bonds and Coverdell ESAs. To avoid penalties and federal income tax consequences, the rollover money must be contributed to a CollegeAdvantage Direct Plan account within 60 days of withdrawal from the original 529 plan. CollegeAdvantage has no responsibility to, and does not, monitor the timing of indirect rollovers, and will not accept or reject indirect rollovers based on timing. You must ensure your compliance with the timing that is required under federal law to avoid tax consequences.

    Please note, for indirect rollovers, if the amount of the check is greater than $10,000, you must deposit the check, and mail us a check made payable to Ohio Tuition Trust Authority and include a copy of the principal and earnings statement from the other 529 plan, U.S. Savings Bonds, or Coverdell ESA. If the check is $10,000 or under, you may endorse the back of the check and sign it over to Ohio Tuition Trust Authority as well as include the principal and earnings statement.

    No matter whether you choose to a direct or indirect 529 rollover to fund your CollegeAdvantage 529 plan, you will need to provide a principal and earnings statement from the distributing 529 plan, which will show the earnings portion of the contribution. If CollegeAdvantage does not receive this documentation within 60 days of receipt of the contribution, the entire amount of your contribution will be treated as earnings per IRS rules governing 529 plans.

    If you are rolling over assets held in a Coverdell ESA or a qualified U.S. Savings Bond, you will need to provide the following documentation:

    • For assets from a Coverdell ESA: An account statement or other documentation from the custodian financial institution showing the total amount contributed and the proportion of the assets that represent earnings.
    • For assets obtained by redeeming a qualified U.S. Savings Bond: An account statement, a Form 1099-INT, or other documentation from the financial institution that redeemed the bond showing how much of the proceeds represented interest and how much represented Principal. Qualified bonds are generally Series EE or I, and have multiple restrictions; see www.treasurydirect.gov under “Individuals,” “Planning & Giving,” “Education Planning” for more information.

    An additional note: A transfer of assets from the CollegeAdvantage Advisor Plan or the CollegeAdvantage Guaranteed Plan to the CollegeAdvantage Direct Plan will be considered an exchange of assets, not a rollover. As such, it is subject to the twice per calendar year limitation placed on exchanges by IRS rules governing 529 plans.

    Be sure to speak with a tax professional prior to completing any rollover to understand if there are other tax implications associated with the transaction. 

    With CollegeAdvantage, it’s your plan, your way. As you set up the rollover of the assets, you can select from ready-made, age-based portfolios, ready-made, risk based portfolios, or build your own investment portfolios by selecting from international equity options, U.S. equity options, balanced options, fixed-income options, capital preservation options and banking options. Are you looking at the investment options and are wondering what your risk tolerance is? We can help you determine it. There are also tools available to help set and meet your savings goal. If you need help determining how much to put aside each month, use our College Savings Planner to receive personalized saving information. After inputting your college savings goals and examining your total projected costs, you will receive an estimated monthly amount needed to meet your savings objective. Please note that this is an example for illustrative purposes only. For additional advice, consult with your legal, financial, tax, or other advisor.

    If you’re already putting money aside in an Ohio 529 Plan, you can track your investment performance, see if you need to change your saving strategy as your child grows, or perform regular maintenance on your 529 account.

    CollegeAdvantage strives to keep the 529 plan rollover as simple as possible. By following the above guidance, and preparing the correct forms and documents, you can soon receive all the tax benefits of a CollegeAdvantage Direct 529 Plan.

  • Our 13 Years Of College

    by User Not Found | Oct 17, 2016

    In 2015, CollegeAdvantage celebrated its 25th anniversary. In honor of this milestone, many longtime account owners shared their Saving Stories and how using CollegeAdvantage helped them achieve their goals. We are fortunate to have these encouraging stories of how families prioritized their children’s higher education and are sharing them again. 

    CollegeAdvantage has worked wonderfully us. We started saving when our two sons were very young (perhaps age 4 and age 2). We ended up having enough saved for the full four years of college through the years of investing. Any money the boys received for birthday or holidays went into their CollegeAdvantage fund. As the boys grew up this did two things: let them know that we were urging them to go to college and that we were saving to make it happen. As a result, they took their studies at the public schools they attended seriously. Their grades ended up giving them each nice scholarships and the CollegeAdvantage fund helped pay a good portion of the balance.

    Our oldest graduated from Ohio Northern University with BS in Mechanical Engineering and then three years later graduated with a law degree from the same university. He is currently a patent examiner at the US Patent & Trademark office in Alexandria, VA.

    Our other son also graduated from Ohio Northern University with a Doctor of Pharmacology degree. He went on to complete a one-year residency at the Cleveland Clinic and is currently a clinical pharmacist at the Cleveland Clinic in Cleveland, OH.

    Between the combined 13 years of college, we were very fortunate that they never had to get a school loan and graduated debt free. We are so thankful the CollegeAdvantage program worked out so well for us. 

    We are expecting our first grandchild this July and already thinking about starting a new account. My biggest hope is that the federal government will maintain the law that these 529 plans continue to be allowed to grow tax free. It is a huge incentive for families to save money for college.

    Thank you for helping our family.

    Roy & Cynthia Anderson

    Madison, Ohio

    This story was originally published on April 2​0, 2015.
  • Direct Plan’s “Top Ten” Investment Options

    by Amy Lyle | Oct 14, 2016

    CollegeAdvantage Direct 529 Plan offers a diverse range of investment options, from ready-made age-based portfolios, ready-made risk-based portfolios, individual investment options, and FDIC insured banking options. Wondering which ones are the most popular with Direct Plan account owners? We’ve gathered that data into a “Top Ten” list so you can see which investment options hold the largest balances of customer’s Direct Plan accounts.

    Here are the 10 investment options with the highest value of assets under management (fund balances in millions, as of Sept. 30, 2016):

    1. Vanguard Aggressive Age-Based Portfolio (ready-made age-based portfolio), $986.39
    2. Vanguard Moderate Age-Based Portfolio (ready-made age-based portfolio), $632.03
    3. Advantage Age-Based Portfolio (ready-made age-based portfolio), $511.61
    4. Vanguard 500 Index Option (individual investment option), $433.03
    5. Vanguard Aggressive Growth Index Portfolio (ready-made risk-based portfolio), $358.98
    6. Vanguard Growth Index Portfolio (ready-made risk-based portfolio), $230.69
    7. Vanguard Extended Market Index Option (individual investment option), $196.71
    8. Vanguard Wellington Option (individual investment option), $184.13
    9. Vanguard Moderate Growth Index Portfolio (ready-made risk-based portfolio), $167.17
    10. Fifth Third Savings Account (FDIC-insured bank option), $148.47


    The total balance of all 24 investment options offered in the CollegeAdvantage Direct Plan as of Sept. 30, 2016, was $4.747 billion.

    Learn more about our investment options and review their performance. After you do so, it might be time to review your college savings goals or open an account!

    Please Note:

    CollegeAdvantage is a 529 college savings plan offered and administered by the Ohio Tuition Trust Authority, an office within the Ohio Department of Higher Education. Before investing, please read the Offering Statement and all Supplements carefully and consider risks, fees, your investment objectives, and other relevant factors, before investing. If you are not a taxpayer in the State of Ohio, you should consider whether your home state offers any state tax or other benefits for investing in its 529 Plan.  Other than the Fifth Third Investment Options (Banking Options), money contributed to an Account is not a bank deposit and is not insured by the FDIC or guaranteed in any way. Except for contributions invested in Banking Options, participants assume all investment risk related to the CollegeAdvantage Direct Plan, including the potential loss of Principal. Contributions invested in Banking Options are an obligation of Fifth Third Bank and are insured by the FDIC, subject to certain limitations. 

  • Why It’s Important To Select A Successor Owner

    by Amy Lyle | Oct 12, 2016

    You’re opening a CollegeAdvantage 529 plan for your child and you come across a section on the account application about successor owner information. What’s a successor owner, you wonder, and do I really need one? The recommendation is yes, as the account owner, you should choose a successor owner to ensure your plans will be followed if you are unable to make decisions for the 529 account.

    Simply put, a successor owner is a person you designate that, in the event of your death or inability to physically or mentally continue the administration of 529 account, to become its new owner and assume all management of it. Having a successor owner should allow for an easy transfer of ownership of the 529 account and the continuance of the saving strategy you established for your child.

    You may have discovered as you were filling in the account application that there can only be one 529 account owner. With married couples, usually the spouse who is not the account owner will be designated as the successor owner so the account management stays within the family.

    A successor owner must be at least 18 years old. You should select someone who you absolutely trust will follow your preferences on the use of the account. Once the successor owner has control of the account, they will have the managerial powers and so can choose to change the beneficiary to a different member of the family of the preceding beneficiary, request a withdrawal, and switch the investment options in which the 529 is invested. Account ownership will be transferred to the successor only when the submission of documentation of death or disability has been accepted by Ohio Tuition Trust Authority. If you do not elect a successor owner for your 529 account, a probate court may end up designating one. If you do not select a successor owner, or if the successor owner does not survive the account owner, the assets will pass to the beneficiary, or if the beneficiary is not 18 years of age at the time, the person designated in the account owner’s will or by operation of law.

    Since laws vary from state to state, you may wish to consult a probate lawyer to determine the precise effect of such a designation.

    You may revoke or change your successor owner at any time. If a situation arises that you need to adjust this designation, you can fill in the appropriate section of the Account Management Change Form.

    No one wants to consider a worst-case scenario but you’ll discover to that having the successor owner framework in place can only ease your mind that your 529 account will be directed as you would wish.

  • The Dreams Of Generations Before Them

    by User Not Found | Oct 11, 2016

    Like all parents of each succeeding generation, we have always wanted our children to have more opportunities and a better life than we've had. Many of our grandparents were immigrants who came to this country with little more than the clothes on their backs and a pocketful of optimism. If they were lucky, they learned how to read and write with the help of a few years of grade school. They struggled in difficult jobs in order to make a good life for their children.

    Our parents' generation had high school and maybe trade school education, and survived the Great Depression and World War II. They worked at blue collar jobs and impressed on us to go to college and "make something" of our lives.

    We were the first in our families to have college educations. We both worked long hours at hard jobs to earn enough to pay our tuition at Cleveland State University during the 1960s, in its second freshman class, crammed to the seams in temporary quonset hut classrooms. We delivered mail, flipped hamburgers, raked hot tar onto roofs, ran drill presses, and photographed weddings. We were constantly sleep-deprived, working late hours, putting in a little studying, even less sleep, then off to classes. We started our married life a year after graduation, relieved that we had no college debt hanging over our heads, and continued to be frugal and work hard to get one of us through four years of law school, also at CSU. We were building for the future of our family.

    We wanted our two daughters to attend college without having to work as hard as we had, and to receive their degrees and begin their careers without being burdened with debt. A program called the CollegeAdvantage made that dream possible.

    When our girls were little, we were building a home and business, and there was no extra money to set aside as we struggled from paycheck to paycheck. We were grateful for the U.S. savings bonds that older family members gave the girls for birthdays and Christmas. "These are for your education," we'd explain when they would tell us they'd rather have a Barbie Dream House. We knew those few bonds and the contents of their piggy banks wouldn't be nearly enough when the time came.

    When our oldest was in middle school, we heard about CollegeAdvantage. We carefully paid into the program regularly, and asked the older family members to contribute in lieu of other gifts. Both girls worked very hard to earn good grades, participated in extra-curriculars such as chorus, band, sports, and service organizations. Both volunteered in the community as well.

    Our oldest decided to attend Miami University to major in finance, and during her four years she headed the co-ed business fraternity, Delta Sigma Pi, and ran the school's credit union. She also sang in the chorus, which performed throughout the U.S. and Europe. She spent a semester studying in Luxembourg. Without the help of CollegeAdvantage, these opportunities would not have been possible for us to afford. She now works as a trust advisor for a major bank.

    Our other daughter decided to attend Muskingum College. She used her CollegeAdvantage funds and won scholarships. She majored in speech/communications with an emphasis on Spanish. She studied in Spain for one semester, and returned to Spain after her 2003 graduation to teach English at the university level for one year. She has since earned a Masters in Teaching English to Speakers of Other Languages (TESOL) from Western Carolina University. She teaches English as a Second Language at the junior high level.

    We now have four grandchildren, whose moms and dads understand the importance of a college education. The minute our grandchildren were born, we set up CollegeAdvantage 529 accounts for each one. We contribute to each account on birthdays and other holidays, and have recruited the other grandparents, aunts and uncles to do so as well. Both the girls and their husbands contribute each payday to their children’s accounts. They know how important it is to get a college degree, and how difficult it is to pay for it without having a plan.

    It takes discipline and sometimes sacrifice to prioritize the budget to include contributions to CollegeAdvantage, but it's an investment in the children's future. They are carrying on the dreams of the generations who have gone before them. There is no more important goal.

    Ed and Diane Ryder

    Chagrin Falls Ohio

  • College Savings Month Winners Announced

    by Amy Lyle | Oct 07, 2016

    CollegeAdvantage recently celebrated September as College Savings Month, which emphasized the importance of saving now for your child’s future college education. By planning ahead for higher education expenses, you can take full advantage of long-term savings, tax benefits, and the power of compound earnings with a 529 plan.

    To celebrate College Savings Month, we gave away $529 college savings awards to ten lucky people! Our giveaway, which ran from Aug. 15 to Sept. 30, was open to account owners and non-account owners alike.

    Here’s the list of the 10 participants randomly selected Oct. 3*:

    1. Oscar Ancalmo of Cincinnati, Ohio
    2. Ken Baehr of Columbus, Ohio
    3. Fabienne Bohon of Oxford, Ohio
    4. Mary Hall of McMurray, Pa.
    5. Mary Inkrot of Pennington, N.J.
    6. Gail Kovacs of Strongsville, Ohio
    7. Kirk Lawson of Austin, Tex.
    8. Jane Lieman of Perrysburg, Ohio
    9. Paul Novelli of Tallmadge, Ohio
    10. Steve Yeoman of Columbus, Ohio

    Winners who already own CollegeAdvantage Direct Plan accounts will use the awards to boost their ongoing savings. Those winners who are not current account owners, will open accounts and use their awards to get a jump start on their college savings!

    If you don’t see your name here, you could enter our Kickoff College Savings Giveaway with the Bengals. One lucky winner will receive a $10,000 College Savings Award. Complete contest rules can be found here.

    Thank you to everyone who participated. Congratulations to all our winners!

    *If your name is listed here as a winner and you have not yet contacted CollegeAdvantage, please do so now so that you don’t risk forfeiting your award. Email Amy Lyle at alyle@CollegeAdvantage.com to claim your prize as soon as possible. Please note that the list of winners is subject to change
  • Want to Make 529 Re-Contribution? No Problem!

    by Amy Lyle | Oct 05, 2016

    As the season drifts into fall, college is in full session. You’ve already covered your child’s qualified higher education expenses, including tuition, through payments from your CollegeAdvantage 529 Plan. However, your child has now decided to drop a class. Because it’s too late to join a new course, the college has sent you a refund check. As you took the money out of your Direct 529 plan, you would like to place the refund into it to continue the 529 tax advantages as well as to avoid any potential tax ramifications as the returned funds could now be considered part of your income if not re-deposited. Additionally, you are concerned that the original transaction could now be treated as a non-qualified withdrawal because the funds are no longer being used to cover qualified higher education expenses.

    Thanks to new regulations established by the Protecting Americans from Tax Hikes (PATH) Act in 2015, you can recontribute those funds to your Direct 529 account. There are some guidelines to follow including: 1) The refunded amount must re-deposited within 60 days of the issuance of the refund; and 2) it must be deposited into a qualified 529 account. As the account owner, you must keep track of all the records showing the date of the refund from the eligible educational institution and then its re-contribution into the 529 plan. Additionally, you will need to maintain all documentation linking the re-contribution to the refund from the eligible educational institution. You are responsible to make sure this transaction meets the Internal Revenue Service (IRS) requirements and is in good order.

    As you deposit the refund, you must notify OTTA that it is a re-contribution of previously withdrawn funds and the refunded amount is compliant with 60-day deadline. The notification to OTTA must include a letter of instruction signed by you detailing the account number of the 529 account from which the withdrawal was initiated along with the date and amount of the withdrawal. If these steps are not followed, the amount will be treated as a normal contribution and thus the original withdrawal may be considered a non-qualified withdrawal by the IRS. You should consult your tax advisor regarding the tax implications of any refunds and/or re-contributions.

    Here are the steps to follow:

    Direct 529 Plan Re-contribution

    You must mail in a check as the re-contribution. Make sure to include the account number.

    1. If under $10,000, you can endorse the schools refunded check and make it payable to OTTA.
    2. If great than $10,000, you will need to cash the refund check, and then send OTTA a personal check for the re-contribution.

    Guaranteed 529 Plan Re-contribution

    The refund from the school CANNOT be re-contributed into the Guaranteed 529 account, because this plan has been closed to contributions since the end of 2003.Therefore, the refund must be deposited into a College Advantage Direct 529 Plan or College Advantage Advisor 529 Plan.

    You must mail in a check as the re-contribution. Make sure to include the original Guaranteed account number as well as the already established Direct or Advisor account number.

    1. If under $10,000, you can endorse the schools refunded check and make it payable to OTTA.
    2. If great than $10,000, you will need to cash the refund check, and then send OTTA a personal check for the re-contribution.

    If you do not have a CollegeAdvantage Direct 529 Plan, you can use your re-contribution from the Guaranteed 529 account to establish a Direct 529 account with OTTA.

    Again, remember that the re-contribution must be deposited back into the 529 plan account within 60 days of the refund being issued. Otherwise, the IRS may consider the refund to be part of your income and there may tax consequences. The IRS could also treat the original withdrawal as a non-qualified withdrawal and there could be tax consequences on the first transaction as well. Consult with your tax advisor regarding the tax implications of any refunds and/or re-contributions.

  • CollegeAdvantage: Peace Of Mind

    by User Not Found | Oct 04, 2016

    It has been a pleasure to have participated in the CollegeAdvantage program for over 25 years. I have two children and started saving in the program when my oldest son was born and then set up an account for my daughter when she was born.

    My son went to the University of Toledo for one year and decided to open his own business (a gym). Since then, he has grown it in to an 8,000 square foot facility called Renegade Fitness in Sylvania, Ohio and is doing extremely well running the business with his wife.

    The nice thing about the CollegeAdvantage program is that I was able to rollover the funds in his account in to my daughter’s account for her future education. My daughter went to the University of Toledo for her freshman year and is now in her sophomore year at Middle Tennessee State University pursuing a music business degree. Another great aspect of participating in CollegeAdvantage is that these funds can go toward out-of-state tuition, which has helped out a lot since the out-of-state tuition is much higher than in-state.

    When my son and daughter in-law have children of their own, I will help them start a CollegeAdvantage savings account for my grandkids to help them plan for the future. I really appreciate that this plan was available for us. It has allowed me to have peace of mind knowing that I had funds to draw upon when my children were ready to go off to college. It has been much appreciated!

    Bradley E. Rhoades

    Canton, Michigan

  • $529 College Saving Award Winners Announced

    by Amy Lyle | Sep 30, 2016

    To promote saving early for your child’s future college costs, CollegeAdvantage sponsored a $529 college saving awards giveaway with several media partners. Our giveaway was open to account owners and non-account owners alike.

    Here are the winners of the $529 college savings awards:

    • Rhonda Robert of Dayton, Ohio
    • Murk Buchanan of Cleveland, Ohio
    • Mylie Durham of Cincinnati, Ohio

    The winners who already own CollegeAdvantage Direct Plan accounts will use the awards to boost their ongoing 529 savings. Those winners, who are not current account owners, will open 529 accounts and use their awards to get a jump start on their college savings!

    Thank you to everyone who participated. Congratulations to all our winners!

    If you don’t see your name here, you could enter our Kickoff College Savings Giveaway with the Bengals. One lucky winner will receive a $10,000 College Savings Award. Complete contest rules can be found here.

    If your name is listed here as a winner and you have not yet contacted CollegeAdvantage, please do so now by emailing Amy Lyle at alyle@CollegeAdvantage.com so that you don’t risk forfeiting your award.

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

  • Score Big As The Bengals And CollegeAdvantage Team Up

    by Amy Lyle | Sep 29, 2016

    Since 2012, the Cincinnati Bengals and CollegeAdvantage have teamed up each season to present one lucky family with $10,000 to help reach their college savings goals.

    This season, the grand-prize winner will receive their $10,000 College Savings Award before kickoff of the Bengals’ Dec. 18 home game, against the Pittsburgh Steelers.

    In addition, the second-place winner will win a visit by a Bengals’ player to their child’s school! Ten runners-up will win a piece of autographed Bengals memorabilia and three additional runners-up winners will receive other Bengals prizes.

    To enter to win, all you have to do is visit us on Facebook. You can enter once per day, per e-mail address. This giveaway will run until 11:59 p.m. Sunday, Dec. 4. For complete rules, visit https://www.collegeadvantage.com/docs/default-source/sweepstakes-rules/16bengalsgiveawayrules.

    Don’t wait to enter. The clock is ticking down to score a touchdown for your college savings. We hope to see you at the 50 yard line of Paul Brown Stadium Sunday, Dec. 18!

  • Feed Your 529 Account Through Other Savings

    by Amy Lyle | Sep 28, 2016

    Being a saver, you completed your bargain hunting at the back-to-school sales. Maybe you live in a state that has a sales tax holiday and you took advantage of those savings too. Being a savvy saver, you deposited those savings into your child’s 529 plan account. Now, you’re looking for other means to reach your college savings goals.

    Here are some ideas to boost the balance in your 529 plan.

    1. Build Your Savings With Disappearing Expenses

    Add the money from disappearing expenses to your child’s 529 plan. Disappearing expenses are those costs in your budget for a limited time span. For instance, preschool is a large disappearing expense for families. Once your child starts kindergarten, consider rolling over your former preschool or day care costs into regular contributions to your 529 account. You won’t miss it and you are continuing to support your child’s educational needs.

    Other disappearing expenses can include paying off a car loan, medical or dental bills, credit card debt, or even your own student loans. Once you have a zero balance on those obligations, you can roll those budgeted dollars into your child’s 529 plan instead. Again, these items have been part of your budget so you aren’t losing any additional income by transferring those dollars to a 529 account. And as you know from paying off those bills, it’s far cheaper to save now than pay off loans later.

    Speaking of additional income, many account owners will also contribute a portion of an annual raise, bonus, or even their tax return refund towards a 529 plan.

    2. Build Your Savings With Help From Others

    Family and friends want to give meaningful gifts for the milestones in your child’s life. You can ask them to consider contributing to your child’s 529 plan in lieu of gifts for baby showers, birthdays, holidays, graduations, and other special occasions. Most people would rather give the gift of college than another toy, which will be soon forgotten. The gift of college is a legacy that will always be treasured and appreciated.

    3. Build Your Savings While Shopping With Upromise

    With no cost to join, you can save even more money for college through Upromise. Connected with hundreds of America’s leading companies, your Upromise membership can earn you cash back as you shop as you normally would. By linking your Upromise account to your 529 plan, your earnings can be automatically transferred on a periodic basis, subject to a set minimum dollar amount.

    4. Build Your Savings With Automatic Contributions

    This is a tried and true savings method. Simplify your life and savings by setting up automatic recurring contributions from your bank account or paycheck. Many 529 plan account owners say the easiest way to save is to automatically transfer the money before you have a chance to spend it elsewhere.

    You can align your automated 529 plan deposits with your paydays or set a monthly contribution schedule. Even if you’re putting away a minimum amount, it can add up!

    This article originally ran on College Savings Plans Network (CSPN) blog on Aug. 29, 2016. 

  • Now We Help Save For A Grandchild

    by User Not Found | Sep 26, 2016

    When the CollegeAdvantage program first started, I knew that contributing to this program was something that I just had to make a priority. My parents helped me with funding for my college education, and I knew it was something that I wanted to do for my children as well. To have my children come out of school debt-free of any student loans was a goal I set for myself. I started by investing $25 per week to each of their accounts through payroll deductions . . . it made it so simple to save. And as time went on, I continued to increase the weekly contributions to their accounts. I even became a volunteer Ambassador for the Ohio Tuition Trust Authority, and I spent time helping other parents understand the importance of the program. 

    As our girls went through college, using the program was so simple and the tax benefits it provided to us were also a great benefit! By utilizing the program, both of our girls graduated on time and they came out of school 100% debt-free. 

    Our oldest daughter attended The University of Akron, and she was a member of the Honors College. She received an academic scholarship, so the money we had invested in CollegeAdvantage was able to be applied to cover a portion of her tuition, along with the cost of her books, fees and housing costs while living on campus. She also had the opportunity to study abroad while she attended U of A. Today, she is working as the Director of Human Resources at 1 EDI Source. She also went on to complete her Master’s Degree at the Weatherhead School of Management at Case Western Reserve. She missed her graduation ceremony at Case as she gave birth to her first son. We gave her a special surprise graduation ceremony at Summa Hospital in Akron instead! 

    Our youngest daughter attended The Ohio State University and received her degree in Human Resources from the OSU's Fisher Business School. She is working as a recruiter and lives in Columbus. 

    Our oldest daughter and her husband are now saving for our grandson’s college education. They established a 529 account with CollegeAdvantage shortly after his birth. For every holiday or birthday, they suggest gift contributions to his college fund . . . and all of the grandparents make this a priority.

    Thanks CollegeAdvantage for helping our family to achieve our educational goals! 

    Jami Dunphy

    Mogadore, Ohio   

  • Coming Soon: Redesigned Pages After Account Log In

    by Amy Lyle | Sep 23, 2016

    ​You will soon notice new UNITE secure web pages after you log in to your CollegeAdvantage Direct 529 Plan account. These enhancements are designed to optimize the use of these secure pages.

    The layout of the secure web pages has changed, and there are a number of enhanced features available. You will now have the ability to complete electronic contributions from one screen for multiple accounts as well as the ability to search by date for account values. To enhance the ease of using the new pages, a process diagram providing the number of steps to complete the request and where you are in the process has been added. Lastly, you will notice there are links on the main page for the most frequently completed transactions.

    We are excited about the changes to the secure webpages, and encourage you to review your accounts.

  • Apply For FAFSA Starting In October!

    by Amy Lyle | Sep 21, 2016

    You’ve been saving for your child’s future college education in a 529 plan over the years. Now, it’s finally time to start preparing for them to head off to college in 2017. You’ve taken family trips to scout out campuses. You’ve researched where are the best post-secondary educational institutions for your child’s chosen career path. The next step: filling out the Free Application for Federal Student Aid (FAFSA).

    FAFSA is the form you and your child must complete to apply for need-based federal financial support in attending four-year colleges and universities, community colleges, vocational schools, and graduate schools. This assistance can include grants, which don’t have to be repaid; federal low-interest loans, which will need to be repaid; and work-study programs. The financial aid is offered on first-come, first-serve basis; so the sooner your child submits a FAFSA, the better the chances are to receive federal monetary assistance. Remember, your CollegeAdvantage account can be used in conjunction with financial aid and scholarships.

    At the end of 2015, the federal U.S. government made significant changes to FAFSA to simplify this process for students and their families. These permanent adjustments are in effect for the 2017-18 school year.

    First, your child will be able to start the financial-aid application in October 2016, for the 2017-18 school year. The FAFSA form will be released three months earlier than previously distributed. Beforehand, the earliest a FAFSA could be completed was the first day of January of the year in which a student planned to start college. By moving forward the FAFSA start date, the timing of the financial-aid process is now more closely aligned with that of college applications. By submitting FAFSA earlier, college-bound students may receive speedier notification of what level of federal financial assistance they may receive. With this information, you and your child can better determine what school offers the best financial fit. As the 529 plan account owner, knowing the level of monetary assistance will allow you to better determine your child’s out-of-pocket expenses to attend the chosen eligible education institution, and how to best manage the accrued savings in your 529 account.

    Additionally, states, universities, colleges, and private organizations will use FAFSA to determine what grants or loans to offer to eligible students interested in attending their school system. So you and your student may learn earlier if there will be any additional state and college financial assistance.

    Second, for the 2017-18 school year, your child will be able to fill in FAFSA with your 2015 income tax return. The use of the income tax return from two years ago is known as “prior-prior year.” With the “prior-prior year” tax return, your child can complete the application with most up-to-date financial information. Previously, FAFSA was filled out with the tax return information from the prior year. For example, if your child filed a FAFSA for the 2016-2017 school year, it would have contained your 2015 tax return information. Typically, most families weren’t able to start their tax returns until well after the January release of FAFSA. This slowed down the financial assistance process. If the application was turned in later because of delayed tax return filings, then the chance of receiving federal financial aid could be lower. Now, with the use of the “prior-prior year” tax return, you can more readily fill in the FAFSA starting in October, and therefore, potentially increase the chance to receive financial assistance.

    The ability to use the “prior-prior year” tax return on FAFSA also benefits universities and colleges because it can reduce the amount of time needed to verify asset information as the IRS already has it. Potentially, the schools can then more quickly determine and distribute their financial aid to students.

    Third, with the use of “prior-prior year” tax return, your child can now take advantage of the IRS Data Retrieval Tool (DRT). DRT electronically imports accurate IRS information to the FAFSA form. This can reduce the amount of errors entered on the application as well as reduce your and your child’s time needed to complete the FAFSA. Again, the use of DRT will help colleges and universities to speed up their approval process as there will be less need to authenticate the financial information.

    Even if you don’t think your child will qualify for any need-based financial aid, don’t neglect to fill out the FAFSA in October. You never know for what financial assistance your child might qualify to use in conjunction with your CollegeAdvantage account. If you wait until your child is accepted at a higher education institute before applying, you could miss out on some monetary support, because, as you now know, federal financial aid is offered on first-come, first-serve basis.

    For more tips on how to file the FAFSA, visit here. For an estimate of how much financial aid you might receive before doing the FAFSA paperwork, start by providing the necessary information to this form. Or you can read this article from the U.S. Department of Education to learn more about the changes for the 2017-2018 FAFSA.

    Now you know — collect your paperwork and get ready to fill out the FAFSA on Oct. 1!

  • Team Effort To Savings

    by User Not Found | Sep 19, 2016

    Sometime in early 1990, I attended an Ohio Tuition Trust Authority seminar in Lakewood, Ohio. We decided that an early savings plan would be the only way that we could afford to send three children to college, virtually at the same time. For the next dozen years, we took no vacations etc., and put any extra money that we had into the CollegeAdvantage plan. Additionally, our children started with paper routes and worked through high school, and that extra money also went toward college. It was genuinely a team effort.

    Both of our daughters graduated from The Ohio State University. One has a degree in Occupational Therapy and is currently an operations manager with a contract rehab service company in Toledo. Our other daughter graduated with a degree in Psychology and then a Psychology Doctorate. She is part of the psychology staff at the VA Center in Louisville, Kentucky. Our son went another direction, but is very successful in his own right.

    We have two suggestions for families: save early and do your best to get your children out with as little debt as possible and with a meaningful degree that leads to good career opportunities.

    We’re pleased to have this opportunity to tell our story and to help others.

    Robert and Cynthia Forest

    Estero, FL 

  • What Are The Tax Advantages Of A 529?

    by Amy Lyle | Sep 16, 2016

    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?”

    The Ohio 529 plan was established by Section 529 of the Internal Revenue Code to encourage parents to save their children’s future college 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 


    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 forqualified 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 CollegeAdvantage 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 tosave 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

    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 


    If you are an Ohio taxpayer, contributions to CollegeAdvantage may be deducted from your Ohio taxable income in any amount up to $2,000 per year, per beneficiary, with unlimited carry forward. This means that $2,000 per year is not a contribution cap.  Should you choose to contribute more than $2,000 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 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. 

  • What Qualified Costs Do 529 Plans Cover?

    by Amy Lyle | Sep 14, 2016

    529 plans are a great, tax-advantaged way to save for your child’s future college costs.

    One of the major benefits of a 529 plan is that when you withdrawal funds for a qualified higher education expense, the money will not be taxed at the federal or state level. So what exactly are 529-qualified higher education expenses? They are the costs involved with attending a federally accredited educational institute to earn a two-year, four-year, graduate or professional degree.

    The breadth of what is considered a 529-qualified higher education expense is broad. Eligible expenses include tuition, mandatory fees, computer equipment and related technology and services, books, supplies, and equipment required for enrollment or attendance; room and board costs or off campus housing during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student.

    What makes an expense qualify? The key is if it is related to enrollment or attendance at an eligible educational institute. For example, tuition is a mandatory expense; books, fees, supplies that are required for classes are necessary cost; and room and board if your beneficiary is living on or off campus is a qualified cost. What are some costs that aren’t qualified higher education expenses? Transportations costs, insurance, fees and equipment which are not required for enrollment, parking tickets, library fines, and payment for student loans.

    Thanks to the Protecting Americans from Tax Hikes (PATH Act) of 2015, computers, software, related equipment and internet access expenses, used by the account beneficiary while enrolled in college, are all now considered qualified higher education expenses. Related equipment and software must for educational purposes, not for entertainment. That means gaming systems do not qualify.

    As is the case with all college savings 529s, the burden of proof for tax purposes for qualified expenses and withdrawals is on the Account Owner. Pleas retain all documentation of all 529-qualifed expenses.

    If you are wondering how to make a 529 withdrawal to pay tuition or room and board, please read this article. This blog offers some tips on how to be reimbursed from your 529 account for other qualified higher education expenses. If you want to avoid making mistakes on your withdrawal, this blog offers some suggestions.

  • One Of The Best Decisions We’ve Made

    by User Not Found | Sep 12, 2016

    It's hard to believe it has been over 25 years! I am an elementary school teacher and first heard about the program from a coworker. After doing a little research, my husband and I decided to open an account for our son. Six years later, when our daughter was born, we also enrolled her in the program.

    We had always hoped for our children to attend college. The CollegeAdvantage plan helped make this dream a reality. I regularly deposited a portion of my paycheck into our children's accounts. By making this a routine part of our budget, it was a relatively painless and effective way to help our children afford a college education. In addition, monetary gifts from family and friends were also deposited into these accounts. From an early age, both of our children knew that they would attend college and often heard us say, "An education is something that can never be taken away from you."

    Our son graduated from The Ohio State University where he received a bachelor's degree in international studies. He later obtained a business degree from Governor's University. He is currently employed as a manager with FedEx in Reynoldsburg, Ohio.

    Our daughter also attended The Ohio State University. While on campus, she was employed part time at the Digital Union, helping staff and students with technology projects. She also acquired a few academic scholarships. With the bulk of her college expenses being covered by her CollegeAdvantage savings, she was able to attend OSU for five years. During this time, she earned two degrees. She received a marketing degree from the Max Fisher College of Business and also earned a BA in communication technology. In 2010, she graduated magna cum laude from The Ohio State University. As an added bonus, she was awarded an internship with AESU, an alumni travel group, and spent five weeks traveling with and videotaping the group in Europe. She is currently employed as an associate consultant at HMB, a business technology firm in Columbus, Ohio.

    Dennis is now retired, and I will retire in June after 35 years in education. We do not yet have grandchildren, but plan to open CollegeAdvantage accounts in the future. Enrolling our children in this plan was one of the best decisions we've made.

    I certainly recommend CollegeAdvantage to others.

    Diana and Dennis Copp

    Kenton, Ohio

  • Unique Non-Qualified Withdrawals Lead To Unique Exceptions

    by Amy Lyle | Sep 07, 2016

    529 plans offer many tax benefits to help you save over time for your children’s future college costs. These benefits include: tax-free earnings; tax-free withdrawals, provided that the account is used for qualified higher education expenses; and State of Ohio tax deduction for Ohio residents.

    You can request funds from the 529 plan for non-qualified withdrawals, but the earnings will be taxed on the federal, state, and local level. Additionally, like other tax-advantage saving programs   there is a 10% federal tax penalty assessed for withdrawing money from the 529 plan for costs that aren’t considered qualified higher education expenses. However, there are three specific exceptions to this federal tax penalty:

    1. Scholarships
    2. Attendance in a U.S. military academy
    3. Death or permanent disability of the 529 plan’s beneficiary

    1) Scholarships. If the 529 plan beneficiary earns a scholarship, you can withdraw up to the same dollar amount as the scholarship from the 529 plan within the same calendar year. It’s a non-qualified withdrawal because it’s not used to pay 529-qualfied higher education expenses such as tuition, mandatory fees, computer equipment and related technology and services, books, supplies, and equipment required for enrollment or attendance; room and board costs during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student. However, since the scholarship covered these qualified costs, only the earnings portion of the withdrawal will be subject to federal, state, and local income taxes. Please note that any amount withdrawn to cover qualified higher education expenses over and above the amount of the scholarship would be considered a qualified withdrawal.

    2) Attendance at a U.S. military academy. You may make a non-qualified withdrawal up to the estimated cost of attendance within the same calendar year at a military academy without incurring the additional 10% federal tax penalty. Again, the earnings portion of such withdrawal will be subject to federal and state income taxes.

    3) Death or permanent disability of beneficiary. In the unfortunate event where the beneficiary has passed away, you may elect to choose a new beneficiary (who must be a member of the family of the previous beneficiary) for the 529 plan account without penalty. Another option is that you can authorize a payment to the estate of the beneficiary. The earnings portion of a payment to the beneficiary’s estate will not be subject to the additional 10% federal tax penalty, but will be subject to federal,  state, and local income taxes. If the beneficiary of the 529 plan becomes permanently disabled, then you may select a new beneficiary or withdraw all or a portion of the account. The earnings portion of any withdrawal will not be subject to the additional 10% federal tax penalty, but will be subject to federal, state, and local income taxes.

    There is one another unique circumstance where the 10% federal tax penalty may not be assessed on a withdrawal: Rollover withdrawals to another 529 plan. If you withdraw funds to roll them over to another qualified 529 plan for the same beneficiary, then the earnings portion of such withdrawal would not be subject to federal, state, and local taxation, nor the additional 10% federal tax penalty, provided it has been more than 12 months since any previous rollover was done for that same beneficiary, and the funds must be deposited to another 529 plan within 60 days of the withdrawal.

    You also may withdraw funds and roll them out to an account in another state’s 529 plan at any time without federal tax consequences when the account beneficiary is changed, provided that the new beneficiary is a member of the family of the previous beneficiary. The funds must be deposited to another 529 plan within 60 days of the withdrawal. A CollegeAdvantage 529 plan rollover withdrawal to another state’s 529 plan will be subject to recapture of any State of Ohio tax deductions claimed in prior years.

    Again, a 529 plan rollover that does not meet these criteria in these two circumstances will be considered by the IRS to be a non-qualified withdrawal; therefore, the 529 plan rollover will be subject to taxation at both the federal and state level and is subject to recapture of any State of Ohio tax deductions claimed in prior years.

    You always have access to all the funds saved in a 529 plan. It is the intended use of the withdrawal that determines if there will be federal and state tax applied and/or a 10% federal tax penalty assessed on the earnings in the withdrawal, Before making a qualified or non-qualified withdrawal, you should consult your financial advisor or tax consultant.

    If you haven’t signed up for a CollegeAdvantage Direct 529 Plan yet, are you ready to become a an account owner for one of your loved ones? Visit here to sign up today. To help you monitor your investments and make investment decisions that are right for your savings strategy, there are online reports, tools, and calculators. These resources are provided for informational purposes only, so you should again consult your financial advisor or tax consultant about your personal situation and savings goals.

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