• Score A College Savings Goal with Crew SC and CollegeAdvantage

    by Amy Lyle | Sep 19, 2017

    CollegeAdvantage is proud to partner with Columbus Crew SC for the 2017 Starting 11 Sweepstakes!

    The grand-prize winner will receive $529 college savings award and a marquee Crew SC prize pack which includes a customized Crew SC jersey, a personalized Crew SC prize pack VIP tickets to the Crew SC home match on Saturday, Sept. 30! Use the college savings award to start your 529 college savings account or score a goal for an already established 529 plan.

    The ten runners-up will receive Crew SC prizes including one autographed item and tickets to the Crew SC home match, Saturday, Sept. 30.

    To enter to win, visit our giveaway on Facebook. You can enter once per day, per e-mail address. Here are the complete sweepstakes rules. This sweepstake will end at 11:59 p.m. ET on Sunday, Sept. 24.

    Don’t wait to enter! There won’t be extra time to score this goal for your college savings!

  • Ohio’s 529 Plan Is Your Solution To Student Loan Debt

    by Amy Lyle | Sep 13, 2017

    While driving, have you seen the bumper sticker that proclaims, “My kid and my money to go (insert the name of school here)?” Does it make you smile or does it make your heart beat a little quicker? Whether college is right around the corner or you’re still dealing with diapers, Ohio’s 529 Plan — CollegeAdvantage — is here to help you save for your child’s future college costs.

    “The credit card debt in the US has reached $1 trillion whereas the student loan debt stands at $1.4 trillion and growing.  This is alarming and action must be taken to reverse the direction of student loan debt,” said Tim Gorrell, executive director of Ohio’s 529 Plan. “Planning for whatever comes after high school - college, trade school, technical school, etc. - and participating in a sound savings and investment plan will make these goals a reality. Going into a new career debt free should be the norm as opposed to entering the workforce with years of debt repayment ahead.”   

    Ohio’s 529 Plan is your solution to student loan debt. The recent news about Ohio’s student loan indebtedness may be disconcerting but forward-thinking parents can make college doable with Ohio’s 529 Plan, CollegeAdvantage. Here’s how:

    529 Plan Tax Benefits

    529 accounts are tax-advantaged college savings plans. What are these tax benefits?

    1. 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. To see how tax-free growth adds up with a 529 savings plan, use the tax benefit tool to show the savings in taxes between a 529 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. 
    2. Tax-free withdrawals. Funds withdrawn from 529 plans are tax free when used for qualified higher education expenses. What are these expenses? Costs that are necessary for enrollment or attendance at an eligible education institution like: 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 in which the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student.
    3. State income tax deduction for contributions to Ohio’s 529 Plan. As a resident of Ohio, you can currently deduct 529 contributions up to $2,000 per beneficiary, per year from your state income tax. However, with unlimited carry forward you can continue to deduct a large 529 plan contribution from your state income tax until all of it has been deducted. For instance, if you contribute $10,000 to your beneficiary’s account, you can deduct $2,000 from your state income tax for the next five years.

    Many 529 Investment Options

    The CollegeAdvantage Direct Plan offers a variety of investment options. Before creating your asset allocation strategy, fill out the online risk tolerance questionnaire to determine your investment profile. You can also use our tools and calculators to determine your savings goals. After reviewing this information, you can start to build a 529 investment portfolio that best fits your family’s needs. The CollegeAdvantage Direct Plan offers ready-made, age-based or ready-made, risk-based portfolios; individual investment vehicles; and FDIC-insured banking options. Ohio’s Direct 529 plan has partnered with leading investment managers VanguardDimensional Fund Advisors, and Fifth Third Bank to provide these 529 investment options. Fifth Third recently increased the annual percentage yield on two terms of the 529 Certificates of Deposits (CDs) offered through Ohio’s 529 Plan.

    Long-Term 529 Investment Performance

    A crucial component for growth in a 529 college savings account is its long-term investment performance. Saving​for​college.com provides 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.”

    The Gift That Keeps On Giving – Compound Interest

    It’s never too late or too early to save for your child’s future college costs. However, if you set aside college savings in a 529 plan early in your child’s life, the 529 account will benefit from compound interest through investing over the years. Compound interest is a saving powerhouse as it is the “interest computed on the sum of an original principal and accrued interest,” according to Merriam-Webster Dictionary. For 529 plans, compound interest is based on contributions, earnings, and interest already accumulated in the account.

    Compound interest in a 529 college saving plan is a huge advantage; yet, 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 post-secondary education or training is far cheaper than paying off student loans debt later in life.

    Ohio’s 529 Plan Can Be Used Nationwide

    Saving for college in Ohio’s 529 Plan does not mean your child is limited to only attending Ohio schools. 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.

    Get To Know Ohio’s 529 Plan

    For more than 25 years, Ohio Tuition Trust Authority (OTTA) has been helping families save for college. OTTA is the state agency that sponsors Ohio’s 529 program, CollegeAdvantage. Currently, Ohio’s 529 Plan is the sixth largest college savings program in the nation. With assets under management valued over is $10.7 billion, Ohio’s 529 Plan has been entrusted with 630,000 college savings accounts.

    No matter the age of your child, CollegeAdvantage is how forward-thinking parents make college doable. Use our online tools and calculators to build the 529 plan that suits your family’s needs. Start your tax-advantaged college savings plan today at CollegeAdvantage.com. And remember, Ohio’s 529 Plan is the solution to student loan debt. 

  • Ohio’s 529 Plan Remains First In Nation For Five-Year Performance

    by Amy Lyle | Sep 12, 2017

    Long-term investment performance is a key growth factor in a 529 college savings plan. Savingforcollege.com, a trusted college-savings industry resource, provides research on 529 plans, financial aid, scholarships, and tools to estimate college expenses. Savingforcollege.com also analyzes the performance of the nation’s 529 plans on a quarterly basis and ranks them based on that performance. Ohio’s 529 Plan, CollegeAdvantage, consistently received high ranks for its long-term investment performance.

    As of June 30, 2017, CollegeAdvantage Direct 529 Plan retained first place nationwide for the best performance in five-year category. The Direct 529 Plan ranked fourth overall in the nation in the three-year performance category. In the ten-year performance category, the Direct 529 Plan moved up one position to second overall.

    The performance score is determined by comparing seven similar asset-allocation categories between all the nation’s 529 plans, the historical performance of each selected portfolio category, and then averaging the score of all the groupings.

    Long-term investment performance is a crucial component in building a 529 account. Other key elements that contribute to a 529 plan’s growth are 529 tax advantages, regular contributions, and compounded interest.

    529 plan tax advantages

    CollegeAdvantage, Ohio’s 529 Savings Program, helps families across the nation save money for their children’s future college, trade, or technical school costs with tax-advantaged benefits. First, all contributions and earnings grow tax-free in a 529 plan. This means that all investment growth is yours to use to cover college costs. Second, a 529 withdrawal is tax free when used to pay qualified higher education expenses, those costs that are mandatory to attend the school. Third, a CollegeAdvantage account owner who is an Ohio resident can deduct their 529 contributions from their Ohio taxable income. Currently, the amount is up to $2,000 per year, per beneficiary, with unlimited carry forward. This means that $2,000 per year is not a contribution cap. If an Ohio taxpayer contributes $10,000 in one tax year, they will continue to subtract $2,000 per year, per beneficiary, from their state taxable income until all the 529 contributions have been deducted.

    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 at any accredited two-year, four-year, graduate or professional, or any other post-secondary schools that accepts federal financial aid.

    Automatic 529 account contributions

    Study after study proves that automatic recurring contributions are one of the easiest ways to save for college. The funds are regularly invested in the 529 plan before there is a chance to spend it elsewhere. Automated 529 plan deposits can be aligned with paydays or a monthly contribution schedule. Just log in to your 529 account and select “Automatic Investments” from the Asset Management menu to schedule recurring contributions. Even small investments can add up to big savings over time through regular automatic contributions or payroll deduction.

    529 plan growth through compound interest

    It’s never too late or too early to start saving for your child’s future college costs. The earlier a 529 account is established, the longer it can build with compound interest. Compound interest is a saving powerhouse as it is the “interest computed on the sum of an original principal and accrued interest,” according to Merriam-Webster Dictionary. For 529 college savings plans, compound interest is based on contributions, earnings, and interest which accumulated in the account.

    Compound interest in a 529 plan is a huge advantage; however, compound interest in student loans is a huge disadvantage. This is one of many reasons why 529 plans are a great alternative to student loan debt, which currently stands at $1.4 trillion held by 44 million borrowers in America. Saving now for post-secondary education or training is far cheaper than paying off student loans debt later in life.

    Ohio’s 529Plan, CollegeAdvantage, is proud to receive these rankings from Savingforcollege.com. The CollegeAdvantage Direct Plan has a variety of investment options — from ready-made, age-based or ready-made, risk-based portfolios; individual investment vehicles to build your personalized portfolio, and FDIC-insured banking options. We’ve partnered with leading investment managers VanguardDimensional Fund Advisors, and Fifth Third Bank to provide these 529 plan investment options.

    To help you build the 529 account that best fits your family’s college savings goals, Ohio’s 529 Plan offers calculators and tools. The college savings planner can assess the projected college costs and provide you an estimated monthly saving goal to be placed in a 529 plan. The cost of waiting tool can show approximately how much more money may be needed if you don’t start soon. The tax benefit tool shows the long-term advantages of tax-free growth in a 529 plan compared to a taxable savings account.

    CollegeAdvantage also provides 529 account strategies that are shaped by your child’s life stage. When a child is a baby to toddler, it is a fantastic time to start saving for future college expenses to take advantage of compound interest. During kindergarten through elementary school, disappearing expenses like day care costs can be shifted to fund the 529 account so you’re still supporting your child’s education. When your child enters middle school and high school, you may need to step up your college savings. Even if your child is getting to start or has even started college, the tax-free earnings, tax-free withdrawals, and the state tax deduction for Ohioans can still build up the 529 account.

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

    *The performance data shown represents past performance, which is not a guarantee of future results.

  • Celebrate College Savings Month With A $529 College Savings Award!

    by Amy Lyle | Sep 11, 2017

    Not only is September back-to-school season, it’s also College Saving Month. The two go hand-in-hand, as a good education is highly valued asset. Whether you’re watching your little one board the school bus for their first year of elementary school or you’re watching your future college graduate board the school bus for their last year of high school, it’s never too late or too early to save for their future post-high school training or educational costs. Ohio’s 529 Plan, CollegeAdvantage, can help forward-thinking parents make college doable. We have information, tools, and calculators to share with parents as develop their post-secondary school savings strategy.

    529 Plan Tax Benefits

    With Ohio’s 529 Plan, you can maximize your savings with 529 tax benefits, which include:

    • tax-free earnings so all investment growth is yours to use;
    • tax-free withdrawals for qualified higher education expenses, those costs  — tuition, room and board, computers, mandatory fees — which are required for enrollment at a post-secondary educational institute;
    • state income tax deduction for Ohioans for CollegeAdvantage 529 account. The current eligible amount for deduction is up to $2,000 per year, per 529 account beneficiary. However, with unlimited carry forward you can continue to deduct a large 529 plan contribution from your state income tax until all of it has been deducted. For instance, if you contribute $10,000 to your beneficiary’s account, you can deduct $2,000 from your state income tax for the next five years.

    Tools To See Your 529 Savings Add Up

    CollegeAdvantage offers tools and calculators so you can build the 529 investment plan that’s right for your family. Start by answering the risk tolerance questionnaire to determine with which asset allocation mix you’d be most comfortable – conservative, moderate, or aggressive. Use the college savings planner to estimate the cost of your child’s college education, then set goals for how much you want to save toward the total expense. If you’ve started to save for college in a regular savings account, work with the tax benefit tool to see tax-free growth in a 529 plan really adds up. And if you haven’t started to save yet, the cost of waiting tool can illustrate the advantages of saving early with the power of compound interest growing in the 529 account.

    Ohio’s 529 Plan Can Be Used Nationwide

    Saving for college in Ohio’s 529 Plan does not mean your child can only attend Ohio schools. 529 plans can be used nationwide at any accredited two-year, four-year, graduate, professional, or any other post-secondary school that accepts federal financial aid.

    Back-To-School College Savings Awards

    Ohio’s 529 Plan, CollegeAdvantage, is celebrating September as back-to-school time and College Savings Month by giving away five $529 college savings awards. Anyone can enter; you can use the award to start a 529 college savings plan or add to your already established account. Enter here today. The giveaway runs Monday, Sept. 11, until 11:59 p.m. ET on Sunday, Oct. 8.  Read the rules here. Don’t miss out on this chance to start or add to your 529 account.

    529 plans are a great alternative to student loan debt. Use our online tools and calculators to build the 529 plan that suits your family’s needs. Start your tax-advantages college savings plan today at CollegeAdvantage.com. CollegeAdvantage is your plan, your way. 

  • OSU Football Ticket Winners Announced

    by Amy Lyle | Sep 08, 2017

    Four lucky Ohio State football fans won tickets to see their favorite college team play at home in CollegeAdvantage’s 2017 College Savings Kickoff with the Buckeyes Giveaway. Held through our Facebook page, this ticket giveaway was open to CollegeAdvantage 529 plan account owners and non-account owners.

    The winners were randomly selected. They are:

    • Grand prize winner  — Erin Butler of Leipsic, Ohio. This prize includes a pair of season tickets to all 2017 OSU home games. Go Bucks!
    • Second-place winner — Bryan Roman of Solon, Ohio. This prize includes two tickets each (6 tickets total) of the following football games: tomorrow night’s home opener against the University of Oklahoma; University of Nevada, Las Vegas on Sept. 23; and the University of Maryland on Oct. 7.
    • Third-place winner — Val Chulskiy of Macedonia, Ohio. This prize includes two tickets each (6 tickets total) of the following football games: Army on Sept. 16, Penn State University on Oct. 28, and University of Illinois on Nov. 18.
    • Fourth-place winner — Robert Negri of Beavercreek, Ohio. This prize includes two tickets to the Nov. 11 game against Michigan State University.

    Don’t see your name on this list? Starting Sept. 11, visit CollegeAdvantage to win one of five $529 college saving awards during our celebration of September as College Savings Month and the Back-To-School season! The giveaway runs until 11:59 p.m. ET on Sunday, Oct. 8. You can enter once per day, per email address. Read the rules here. Don’t miss out on this chance to start or add to your CollegeAdvantage 529 account.

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

  • Score BIG For Your 529 As The Bengals & Ohio’s 529 Plan Team Up

    by Amy Lyle | Sep 06, 2017

    Since 2012, the Cincinnati Bengals and Ohio’s 529 Plan, CollegeAdvantage, have teamed up annually to present one lucky family with $10,000 to reach their college savings goals. Use it to kick off your 529 college savings account or score big for an already established 529 plan.

    To enter to win, visit our giveaway on Facebook. You can enter once per day, per e-mail address. This giveaway will run until 11:59 p.m. Sunday, Nov. 26. Here are the complete contest rules.

    For the 2017 season, the grand prize winner will receive their $10,000 college savings award before kickoff of the Bengals’ Dec. 10 home game against the Chicago Bears.

    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.

    Don’t wait to enter! The clock is ticking down to score big for your college savings. We hope to see you at the 50-yard line of Paul Brown Stadium Sunday, Dec. 10!

  • Ohio’s 529 Plan Two-Factor Authentication Policy Now Mandatory

    by Amy Lyle | Sep 01, 2017

    For Direct Plan account owners, two-factor authentication process is now mandatory to access your 529 plan online. This practice protects valuable college savings account information from phishing attacks and identity theft and is standard for most financial institutions.

    Many financial institutions, including the Social Security Administration, have already adopted two-factor authentication process, which enhances the security of online access to monetary accounts. Log in passwords only (one-factor authentication) are no longer considered strong enough protection to withstand a security breech. The two-factor authentication process protects valuable account information by allowing financial institutions to double-check their online account users’ identities. 

    What Is Two-Factor Authentication?

    So what exactly is two-factor authentication? It is a multi-level identification process that allows a customer access to information only after they prove their identity in these two categories: Knowledge (something they know), and possession (something they have).

    Most people already use two-factor authentication. When withdrawing money from an ATM, customer must first have the card (possession – something the customer has) and then the customer must enter the PIN (knowledge – something the customer knows). Most financial service providers already require two-factor authentication when accessing your accounts from a new desktop or other secure device.

    How To Get Started

    A CollegeAdvantage Direct 529 account owner will to take two steps to verify their identity. The first step will be to log in as normal with the account number and password from a private computer or other secure device. This first step would be possession – something they have. The second step will occur when they enter the PIN. This second step is knowledge – something the account owner alone would know.

    The account owner will then select how to receive the PIN (Personal Identification Number) – either by text, by phone, or by calling CollegeAdvantage’s Customer Service Department themselves. Upon receipt of the PIN, you will have five minutes to enter the code. Once the PIN has been entered from your computer or other secure device, there’s an option to mark the device as trusted. In order to keep the account secure, this process will be repeated during the life of the account. Again, this is an extra layer of security to protect your college savings.

    Beginning the week of August 27, the two-factor authentication process will be permanently required for all account owners.

    Have more questions? Find answers on this Two-Factor FAQ page or call our Customer Service Department from 8:30 a.m. – 6 p.m. EST Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734). Additionally, when an account owner logs into their Direct 529 Plan account, there is a video for you to watch, describing the steps involved with the two-factor authentication.

    CollegeAdvantage is your plan, your way.

  • Office Closed For Labor Day

    by Amy Lyle | Aug 29, 2017

    The CollegeAdvantage office will be closed on Monday, Sept. 4, in observance of Labor Day. CollegeAdvantage Customer Service department (1-800-AFFORD-IT) will also be closed on this day.

    Customer Service representatives are available to assist you on regular business days from 8:30 a.m. to 6 p.m. ET before or after this holiday. Please be aware that you can make an account contribution or access accounts online 24/7.

    Also, the New York Stock Exchange (NYSE) will close in observance of Labor Day. Any transaction requested on a holiday, weekend, or after the NYSE closes will be processed on the next business day.

    In recognition of the holiday, the Ohio History Connection will be hosting events around the state during the weekend to celebrate Labor Day. Ohio Village will be hosting the Ohio Cup Vintage Base Ball Festival Sept. 2-3. Additionally, there are many celebrations scheduled around Ohio during the long Labor Day weekend. 

  • Win OSU Football Tickets From Ohio’s 529 Plan!

    by Amy Lyle | Aug 28, 2017

    Hey Buckeye fans! Do you want to see your favorite football team in action at Ohio Stadium this fall? Ohio’s 529 Plan, CollegeAdvantage, is giving away four football ticket packages to the fans of both the Buckeyes and saving for college.

    The grand-prize winner will receive a pair of season tickets (14 tickets total) for each of 2017 Ohio State University football home games. The second-place winner will collect two tickets to three games (6 tickets total) — the Sept. 9 game against the University of Oklahoma; the Sept. 23 game against University of Nevada, Las Vegas; and the Oct. 7 game against University of Maryland. The third-place winner will receive two tickets each (6 tickets total) of the following football games: Army on Sept. 16, Penn State University on Oct. 28, and University of Illinois on Nov. 18. Finally, the fourth-place winner will receive two tickets to the Nov. 11 game against Michigan State University.

    To enter, visit Ohio’s 529 Plan today on Facebook. You can enter once per day, per person. But don’t wait; this giveaway ends at 11:59 p.m. ET Aug. 31, 2017. This ticket sweepstake is open to CollegeAdvantage 529 Plan account owners and non-account owners. Here are the complete contest rules.

  • Fifth Third Bank Increases Ohio’s 529 Plan CD Rates

    by Amy Lyle | Aug 18, 2017

    Beginning Aug. 17, 2017,  Fifth Third Bank, an investment option partner with Ohio’s 529 Plan, will offer higher rates on two FDIC-insured 529 Certificates of Deposit (CDs): Those with terms of 6 - 11 months and those with terms of 12-23 months. The Annual Percentage Yield (APY) is now set at 1.00% for both CD terms.  (Previously, the APY was set at 0.30% for the 6-11 Month CD and 0.50% for the 12-23 Month CD.)

    cd-apys-as-of-8-17-2017-chartCDs require a minimum $500 contribution and anyone — parents, grandparents, friends and other loved ones – can purchased a CD to help cover your child’s future college costs. 

    Current CollegeAdvantage Direct 529 Plan account owners can purchase a CD online. Log in to your Direct Plan account and make a one-time contribution electronically from your bank account to buy a CD. You can also download an Additional Contribution Form and mail it with your minimum contribution of $500 to purchase 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.  

    If you haven’t opened a Direct 529 Plan, it’s easy to enroll online and purchase a Fifth Third 529 CD at that time.

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

    Are you interested in getting this new CD interest rate? Go here to purchase your CD and start saving for your child’s future college expenses today! If you are wondering how much to save or the cost of waiting to save, visit here for tools to gain a better understanding on the power of investing.

    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.

    Fifth Third Bank is a member of the FDIC.

  • Ohio’s 529 Plan Ranks First In Nation For 5-Year Performance

    by Amy Lyle | Aug 14, 2017

    Saving​for​college.com, a trusted college-savings industry resource, recently released their nationwide 529 direct plan performances for the first quarter of 2017. CollegeAdvantage Direct 529 Plan has been ranked first overall in the nation at the five-year performance category; fourth overall in three-year performance; and third overall in 10-year performance.

    Long-Term 529 Investment Performance

    A crucial component for growth in a 529 college savings account is its long-term investment performance. Saving​for​college.com provides researched articles on 529 plans, financial aid, scholarships, and tools to estimate college expenses. Savingforcollege.com also analyzes the performance of the nation’s 529 plans on a quarterly basis and rank them based on that performance. Ohio’s 529 Plan, CollegeAdvantage, consistently received high ranks for its long-term investment performance.

    As of March 31, 2017, CollegeAdvantage Direct 529 Plan ranked first across the nation for the best performance in five-year category; the previous ranking was second. The Direct 529 plan ranked fourth overall in the nation in the three-year performance, up from sixth place. In the ten-year performance category, the Direct Plan remained at third overall.

    Saving​for​college.com determined the performance score by comparing seven similar asset-allocation categories between all the nation’s 529 plans, the historical performance of each selected portfolio category, and then averaging the score of all the groupings. The rankings were then based on one-year, three-year, five-year and ten-year performance scores.

    Ohio’s 529Plan, CollegeAdvantage, is proud to receive these rankings from Saving​for​college.com. The CollegeAdvantage Direct Plan offers a variety of investment options — from ready-made, age-based or ready-made, risk-based portfolios; to investment vehicles to build a portfolio based on an individual’s risk tolerance, investing preferences, and savings goals; to FDIC-insured banking options. Ohio’s Direct 529 plan has partnered with leading investment managers Vanguard, Dimensional Fund Advisors, and Fifth Third Bank to provide these 529 plan investment options.

    Long-term investment performance is a key factor in building a 529 account. Other key elements that contribute to a 529 plan’s growth are compounded interest, 529 tax advantages, and regular contributions.

    Compound Interest – A 529 Plan Powerhouse

    By setting aside college savings in a 529 plan early in a child’s life, the 529 account will benefit from compound interest through investing over the years. Compound interest is a saving powerhouse as it is the “interest computed on the sum of an original principal and accrued interest,” according to Merriam-Webster Dictionary. For 529 plans, compound interest is based on contributions, earnings, and interest already accumulated in the account.

    Compound interest in a 529 college saving plan is a huge advantage; however, compound interest in student loans is a huge disadvantage. This is one of many reasons 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 post-secondary education or training is far cheaper than paying off student loans debt later in life.

    529 Plan Tax Advantages

    CollegeAdvantage, Ohio’s 529 Savings Program, helps families across the nation save money for their children’s future college, trade, or technical school costs with tax-advantaged benefits. First, all contributions and earnings grow tax-free in a 529 plan. Second, when a 529 account withdrawal is requested to cover qualified higher education expenses, the amount taken out will be tax-free. Third, a CollegeAdvantage account owner who is an Ohio resident can deduct 529 contributions from their Ohio taxable income, up to $2,000 per year, per beneficiary, with unlimited carry forward. This means that $2,000 per year is not a contribution cap. The taxpayer can continue to subtract $2,000 per year, per beneficiary, from their Ohio taxable income until all the 529 contributions have been deducted.

    Automatic 529 account contributions

    This is a tried and true savings method. Account owners say that the easiest way to save the most is through automatic recurring contributions. This way, the funds are regularly invested in the 529 plan before there is a chance to spend it elsewhere. Automated 529 plan deposits can be aligned with paydays or a monthly contribution schedule. Just log in to the 529 account and select “Automatic Investments” from the Asset Management menu to schedule recurring contributions. Even small investments can add up to big savings over time through regular automatic contributions or payroll deduction.

    Ohio’s 529 Plan offers calculators and tools to build a 529 plan that best fits the account owner’s needs. The college savings planner can assess the projected college costs and provide an estimated monthly saving amount to be placed in a 529 plan to reach a saving goal. The cost of waiting tool can show approximately how much more money will need to be set aside if saving for college is postponed. Again, the earlier a 529 plan is started, the sooner the account can grow by taking advantage of compound interest. The tax benefit tool illustrates the long-term advantages of tax-free growth in a 529 plan compared to a taxable savings account. CollegeAdvantage also provides 529 account strategies designated by a beneficiary’s life stage. When a child is a baby to toddler, it is a fantastic time to start saving for future college expenses. During kindergarten through elementary school, disappearing expenses like day care costs can be shifted to fund the 529 account. When a student has entered middle school and high school, college savings may need to be accelerated. Even if a child is getting to start or has started even college, the tax-free earnings, tax-free withdrawals, and the state tax deduction for Ohioans can still build up the 529 account.

    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.

    Open an Ohio 529 plan to save for future training and education. An investment in a 529 plan is an investment in your child. Remember, 529 accounts are an excellent alternative to student loan debt. CollegeAdvantage is your plan, your way.

    *The performance data shown represents past performance, which is not a guarantee of future results.

  • Ohio’s Direct 529 Plan Earns 5-Cap Rating Once More

    by Amy Lyle | Aug 07, 2017

    Savingforcollege.com is a trusted website about college-savings industry. It provides analysis and informational articles on 529 plans, financial aid, and scholarships, as well as tools to estimate college expenses. On July 12, 2017, Savingsforcollege.com released their latest 5-Cap Rating rankings. Ohio’s Direct 529 Plan, offered by CollegeAdvantage, once again earned the top 5-Cap Rating for both in-state and out-of-state residents.

    5-Cap Rating Criteria For 529 Plans

    The 5-Cap Rating is awarded to college savings plans that “offer outstanding flexibility, attractive investments, and additional economic benefits (such as generous tax incentives) that for some people, at least, will provide a substantial boost to their savings. There are few, if any, weaknesses in these programs.”

    The rating is based on five criteria:

    • The performance of the 529 plan;
    • The costs of running the college-savings plan including expense ratios, administration and managerial fees;
    • Special features such as a variety of age-based and risk-based investment portfolios as well as FDIC-insured options, contribution restrictions, and participation in programs like Upromise and Ugift which encourage account owners to boost their college savings;
    • Reliability signals such as plan disclosure statements, the ease of making account changes, and the caliber of outside program managers; and
    • Extra advantages like tax benefits for any account owner as well as additional tax breaks* for state residents.

    Ohio’s 529 Plan ranking

    CollegeAdvantage’s Direct 529 Plan is one of only three college savings plans nationwide to receive the 5-Cap Rating for both in-state and out-of-state residents in the most recent ratings. Ohio’s 529 Saving Program has earned this recognition multiple times for the Direct 529 Plan’s attractiveness for Ohioans as well as non-residents.

    Earlier this year, SavingForCollege.com analyzed the long-term investment performance of the nation’s 529 plans and ranked them. For the first quarter of 2017, CollegeAdvantage Direct 529 Plan ranked first across the nation for the best performance in five-year category; the previous ranking was second. The Direct 529 plan ranked fourth overall in the nation in the three-year performance, up from sixth place. In the ten-year performance category, the Direct Plan remained at third overall.

    What are some of the reasons that Ohio’s 529 Plan ranks so well? CollegeAdvantage helps families across the nation save money for their children’s future college costs with tax-advantaged benefits including tax-free earnings and tax-free withdrawals when requested to cover qualified higher education expenses. Additionally, if CollegeAdvantage account owner is an Ohio resident, then they can deduct 529 contributions from their Ohio taxable income, up to $2,000 per year, per beneficiary, with unlimited carry forward. This means that $2,000 per year is not a contribution cap. The taxpayer can continue to subtract $2,000 per year, per beneficiary, from their Ohio taxable income until all the 529 contributions have been deducted.

    To build a 529 plan to best fit a family’s needs, Ohio 529 College Savings Plan offers calculators and tools, which include:

    • The college savings planner which can estimate the projected college costs and provide a projected monthly saving amount to be placed in a 529 plan to potentially reach a saving goal.
    • The cost of waiting tool which can approximate how much more money will be needed to be set aside if saving for college is postponed.
    • The tax benefit tool which will illustrate the long-term advantages of tax-free growth in a 529 plan compared to a taxable savings account.
    • The risk tolerance questionnaire which will explore the account owner’s tolerance for risk to determine an investment strategy best suited to them.

    CollegeAdvantage also suggests 529 account strategies as determined by a beneficiary’s life stage:

    • Baby to toddler: If possible, this is the best time to start saving for future college expenses so the account can grow as long as possible while benefiting from the power of compound interest.
    • Kindergarten through elementary: This is another good time to start college savings when disappearing expenses like day care costs can be shifted to fund the 529 account while still having compound interest continue to build the account.
    • Middle school and high school: Savings may need to be accelerated as the cost of college comes in focus. Encourage others to contribute to the account for holidays and milestones in the beneficiary’s life.
    • College: Tax-free earnings, tax-free withdrawals, and the state tax deduction for Ohioans can still build up the 529 account while funds are being withdrawn for qualified higher education expenses.

    The CollegeAdvantage Direct Plan offers a variety of investment options from ready-made, age-based or ready-made, risk-based portfolios; to stocks and bond options to create a portfolio based on an individual’s investing preferences; to FDIC-insured banking options. CollegeAdvantage has partnered with leading investment managers Vanguard, Dimensional Fund Advisors, and Fifth Third Bank to provide these Direct 529 plan investments.

    Ready to start with Ohio’s 529 Savings Program? It’s easy to open an account here. Already have an account and would like to make modifications? Log in to a 529 account to update information, perform account maintenance, or increase automatic deposits. CollegeAdvantage is your plan, your way.

    * Subscription required

    ** The performance data shown represents past performance, which is not a guarantee of future results.

  • Steps To Simplify Your Guaranteed Plan Withdrawal

    by Amy Lyle | Aug 01, 2017

    As summer winds down, your family needs prepare for the new school year, like paying for your child’s qualified higher education expenses. You saved for these college costs in a CollegeAdvantage Guaranteed 529 Plan* and now it’s time to make withdrawals from it.

    Effective July 28, 2017, the payout rates** for the CollegeAdvantage Guaranteed 529 Savings Plan are:

    Tuition Unit: $102.96

    Tuition Credit: $118.40

    With the new WAT payout rate released, you can now arrange for a withdrawal from your Guaranteed account. There are several ways to pay for your child’s college costs.

    Update bank information

    First, you must login in your 529 plan to update your bank account information if you have changed financial institutions. For security reasons, the bank account information must be on file for 15 business days before a withdrawal will be processed. This is a one-time waiting period, unless you change your banking information again. If you need help logging into your account, please call our Customer Service Department from 8:30 a.m. – 6 p.m. EST Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734) or email CustomerService@CollegeAdvantage.com. CollegeAdvantage is not responsible for any late fees charged by the school, so please plan ahead.

    Online withdrawal and online payment

    Once you’ve verified that your bank account information is current, you can request a withdrawal online. This will be the quickest process to withdrawal funds from your Guaranteed 529 Plan.

    As you apply for a withdrawal online, you can choose to have the funds sent to the eligible higher education institution, you bank account, or the beneficiary’s bank account. Withdrawals requested before 4 p.m. EST Monday-Friday will be processed in three business days. If you choose to have the withdrawn funds to be sent to a bank account, it may take additional time for the bank to show the 529 withdrawal as deposited.

    Opting to have the withdrawal directly sent to the school is another option for your withdrawal. Make sure to provide the beneficiary’s name, correct student ID number and the correct school address on the withdrawal form. CollegeAdvantage does not provide school addresses unless the school has been utilized previously for a withdrawal payment.

    If you chose to have the 529 funds deposited to your or your beneficiary’s bank account, the second quickest method is to pay through the college’s online portal. Make sure you have the correct student ID number. Processing times will vary by school; ask the bursar’s or financial aid office what a good time would be to start the withdrawal process so you can avoid late penalties.

    Online withdrawals are not permitted for a withdrawal quest for $10,000 or more, or if the account is a pre-1996 contract. In these cases, you will need to print and fill out the withdrawal form. This form must be notarized before it’s sent to the mailing address on the form. For more information, please review the plan description of CollegeAdvantage Guaranteed Saving Plan.

    Online withdrawal and paper check delivery

    You can choose to make an online withdrawal request but then opt to have CollegeAdvantage mail the payment directly to you to deposit the funds into your or the beneficiary’s bank account or mail the check to the higher education institution. As this method is dependent on the United States Postal Service’s delivery schedule and the school’s processing procedures, it will be a slower process. When making the withdrawal, you must provide the correct school address to where the check should be sent as well as the beneficiary’s name and school ID number. CollegeAdvantage does not provide school addresses.

    If you selected to have the 529 withdrawal electronically deposited into your or the beneficiary’s bank account, you can mail your personal check to the post-secondary education institute with the correct student ID on it.

    Paper withdrawal form and paper check delivery

    You can also complete your withdrawal, whether payable to you, the beneficiary or the school, by printing the Withdrawal Request Form. You have the ability to fill out the form on screen then print it. Once completed, you then mail the form to the listed address and then have the withdrawal mailed to you or the school. This form, as well as other forms for the CollegeAdvantage Guaranteed 529 Savings Plan, can be found here.

    This is the slowest withdrawal and payment method. Please keep in mind that mail delivery — to CollegeAdvantage, then to bank accounts and/or to the school — will increase the processing times at each one of this institutions. Therefore, check with the school’s bursar office to find out how long they need to process a mailed check so you can avoid late penalties.

    The most important step is to prepar​e now for upcoming 529 withdrawals. If necessary, update your bank information on your CollegeAdvantage account and find out how much time the school needs to process your payment. These simple steps will expedite the withdrawal so you can pay your child’s college costs on time. If you have any further questions, our Customer Service Department is available to help from 8:30 a.m. – 6 p.m. EST Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734).

    * This college savings plan has been closed to new enrollments and new investments since Dec. 31, 2003.

    ** Withdrawal values are calculated according to Ohio Administrative Code and may change at any time and without notice.

    Please note that WAT payout rate are subject to change once each of the Four-Year State Universities listed in ORC Section 3345.011, (which are University of Akron, Bowling Green State University, Central State University, University of Cincinnati, Cleveland State University, Kent State University, Miami University, Ohio University, Ohio State University, Shawnee State University, University of Toledo, Wright State University, and Youngstown State University) have released their annual undergraduate tuition rates. 

  • Save With Ohio’s State Sales Tax Holiday

    by Amy Lyle | Jul 31, 2017

    As life slows down during summer, it can be the perfect time to work on your 529 college savings accounts, review your investment strategies, and make any necessary adjustments. CollegeAdvantage offers online calculators and tools to check if you are on track to reach your college-savings goals.

    After reviewing your 529 plan, check for new savings or income sources to increase your contributions. Here are some ideas to boost your account balance.

    Save with Ohio’s sales tax holiday

    Shop during Ohio’s sales tax holiday (and back-to-schools sales) to take advantage of the extra savings while buying everything on the school supply list. Then, deposit those savings into your child’s 529 plan to continue supporting your child’s education.

    Ohio’s 2017 sales tax holiday weekend is set for August 4-6. Items exempt from sales and use tax are school supplies priced at $20 per item or less; school instructional material at $20 per item or less; and clothing priced at $75 per item or less. If you have any additional questions about the sales tax holiday, the Ohio Department of Taxation has answers on their FAQ page.

    Save with automatic contributions

    Streamline your 529 account savings with automatic recurring contributions. These automated deposits can be set according to paydays or a monthly contribution schedule. As the funds are automatically transferred, your opportunity to spend the money before saving it is greatly diminished. These 529 savings add up even when depositing a minimum amount.

    Some employers also offer payroll deduction, where a portion of your pay is deposited directly into your CollegeAdvantage Direct 529 account. Login to your account to establish payroll deduction through direct deposit or complete and mail a payroll deduction form. Payroll contributions makes it easy to save regularly to meet college-saving goals.

    Save with Upromise

    Ohio’s 529 Plan has partnered with Upromise* to help you save even more for college. Upromise is a free loyalty program that offers its members cash back as you shop online, dine out, fill your gas tank, buy groceries with eCoupons, book hotels, and more. By linking your Upromise account to your CollegeAdvantage Direct Plan, your earnings can be automatically transferred on a periodic basis, subject to a $25 minimum.

    Save with loved ones’ contributions

    The gift of college is always treasured and appreciated. When loved ones ask what to give for a milestone celebration in your child’s life, ask them to contribute to your child’s 529 plan. Most people would rather give a meaningful gift, like college savings, than another soon-to-be discarded toy. With Ugift, it’s simple for anyone to contribute to a CollegeAdvantage Direct Plan account. You give your unique Ugift code, rather than the 529 account number, to family and friends. The gift giver can make one-time or recurring electronic contributions at any time. If the gift giver is an Ohio taxpayer, they can deduct their own contributions from their Ohio taxable income.

    Federal gift tax considerations depend on the amount of your loved ones’ contributions. The current annual gift tax exclusion is up to $14,000 ($28,000 for a married couple) per beneficiary, per year, but that amount includes all gifts to a beneficiary, not just contributions to a 529 account. Additionally, an individual can even contribute up to $70,000 per beneficiary in a single year ($140,000 for married couples) to take advantage of five years’ worth of tax-free gifts at one time. For grandparents, who are considering gift tax implications while evaluating their estate planning, 529 plans can be smart way to insure that their monetary gift is used for a valuable asset — a college education with little student loan debt. As this is a complicated area of tax law and strategies, please consult with a tax adviser, financial adviser, or estate-planning attorney for more information on this option.

    Save with disappearing expenses

    Disappearing expenses are those limited-lifetime budget items. For instance, day care is a large disappearing expense for families. Once your child enters kindergarten, roll over your former preschool or day care costs into regular contributions to your 529 account. This way, you are continuing to support your child’s educational needs.

    Other disappearing expenses can include car loans, medical or dental bills, credit card debt, or even your own student loan payments. Once you have paid those obligations, transfer those dollars to your child’s 529 plan. As these costs have been already budgeted, there is no loss of income with converting them into 529 plan contributions.

    Every dollar saved is a dollar that isn’t borrowed, which makes a 529 college savings plan an excellent alternative to student loan debt. Even small 529 plan deposits can grow through the power of compound interests, tax-free earning, and tax-free withdrawals for qualified higher education expenses. If you haven’t started, it’s never too late to save for college costs so start now. If you have been saving in a 529 plan, take these additional steps and watch how your account grows.

    * Upromise is an optional service offered by Upromise, Inc., as an added value to CollegeAdvantage Direct 529 Plan Account Owners. Upromise is separate from the CollegeAdvantage Direct 529 Plan and is not affiliated with the Ohio Tuition Trust Authority of the State of Ohio. Participation in Upromise is optional and voluntary. Specific terms and conditions apply. Participating companies, contribution levels, terms, and conditions are subject to change without notice. Upromise and the Upromise logo are registered service marks of Upromise, Inc.

  • “Top 10” Investment Options In Ohio’s Direct 529 Plan

    by Amy Lyle | Jul 31, 2017

    Whether you’re thinking of opening a CollegeAdvantage Direct 529 Plan or want to review the 529 savings options in which you’re currently invested, CollegeAdvantage is your plan, your way. The Direct Plan from Ohio’s 529 Savings Program offers a diverse range of investment options from which you can create your college-savings strategy. These 529 saving options include ready-made age-based portfolios, ready-made risk-based portfolios, individual investment options, and FDIC-insured banking options, all provided from our partners and leading investment managers — Vanguard, Dimensional Fund Advisors, and Fifth Third Bank.

    Which investment options are the most popular with Direct Plan account owners? We’ve gathered that data into a “Top 10” list so you can see which ones hold the largest balances of customer’s Direct Plan accounts.

    Top 10 investments options in Ohio’s 529 Plan

    The top 10 investment options with the highest value of assets under management (fund balances in millions, as of June 30, 2017) are:

    1. Vanguard Aggressive Age-Based Portfolio (ready-made age-based portfolio), $1,118.83
    2. Vanguard Moderate Age-Based Portfolio (ready-made age-based portfolio), $692.30
    3. Advantage Age-Based Portfolio (ready-made age-based portfolio), $584.86
    4. Vanguard 500 Index Option (individual investment option), $513.72
    5. Vanguard Aggressive Growth Index Portfolio (ready-made risk-based portfolio), $410.98
    6. Vanguard Growth Index Portfolio (ready-made risk-based portfolio), $255.18
    7. Vanguard Extended Market Index Option (individual investment option), $223.76
    8. Vanguard Wellington Option (individual investment option), $214.36
    9. Vanguard Moderate Growth Index Portfolio (ready-made risk-based portfolio), $182.45
    10. Fifth Third Savings Account (FDIC-insured bank option), $159.91

     

    The total balance of the 24 investment options offered in the CollegeAdvantage Direct Plan as of June 30, 2017, was $5.348 billion, an increase of 15.6% over the prior year (June 30, 2016).

    A 529 college savings plan is an excellent alternative to student loan debt. If you’re ready to start saving for your child’s future college costs, go online to open an account after reviewing the investment options' performance. If you already have a 529 plan, it might be time to re-examine your college-savings goals, perform account maintenance, or make an asset exchange.

    CollegeAdvantage is your plan, your way.

    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. 

  • Ohio’s 529 Plan Announces New WAT Payout Rate

    by Amy Lyle | Jul 28, 2017

    Now that the four-year state universities in Ohio have announced their tuition rates for the 2017-2018 school year, CollegeAdvantage has calculated the Weighted Average Tuition (WAT) for the CollegeAdvantage Guaranteed 529 Plan. This college savings plan has been closed to new enrollments and new investments since Dec. 31, 2003.

    Effective July 28, 2017, the payout rates* for the CollegeAdvantage Guaranteed 529 Savings Plan will be:

    Tuition Unit: $102.96

    Tuition Credit: $118.40

    How does Ohio’s 529 Plan determine the WAT rate? According to the 2016 Plan Description for the CollegeAdvantage Guaranteed 529 Savings Plan, WAT is “calculated as follows: 1. Multiply the annual in-state undergraduate tuition for the academic year at each of the Four-Year State Universities times the number of undergraduate full-time equivalent students at each such university; 2. Add together the products derived from (1) above; and 3. Divide the total of these products by the total number of undergraduate full-time equivalent students attending Four-Year State Universities.”

    The Four-Year State Universities, listed in the Ohio Revised Code Section 3345.011, include University of Akron, Bowling Green State University, Central State University, University of Cincinnati, Cleveland State University, Kent State University, Miami University, Ohio University, Ohio State University, Shawnee State University, University of Toledo, Wright State University, and Youngstown State University.

    CollegeAdvantage has tools and calculators to help you shape your college savings goals. Make sure to take into consideration the age of your child, existing savings, time span before college and your risk tolerance.

    Depending on your goals, you have the option to open a CollegeAdvantage Direct Plan to continue growing your college savings or even make a direct rollover of your CollegeAdvantage Guaranteed Plan account to any 529 plan, including the CollegeAdvantage Direct or Advisor Plan. You can complete a rollover at any time, without incurring tax consequences and a penalty. A direct rollover means the funds are being directed by the same account owner for the same beneficiary. Complete the Guaranteed Plan Withdrawal form to make a direct rollover.

    A 529 college savings plan is an excellent alternative to student loan debt. CollegeAdvantage is your plan, your way.

    * Withdrawal values are calculated according to Ohio Administrative Code and may change at any time and without notice.

    The Ohio Tuition Trust Authority does not provide investment advice. The information contained herein is informational only and should not be relied upon exclusively to make your investment decisions. Investment options should be selected based on your investment goals, risk tolerance, and savings time horizon.

    Please note: The earnings portion of non-qualified withdrawals may be subject to taxes and a possible 10% federal tax penalty. If you are considering taking a non-qualified withdrawal, please consult your professional tax advis​er.

  • Simplify Your 529 Withdrawal Process

    by Amy Lyle | Jul 28, 2017

    NOTE: This is the process for CollegeAdvantage Direct 529 Plan accounts only. The process is different for Guaranteed Plan accounts. Here is guidance for withdrawals from the Guaranteed Plan.

    The new school year is quickly approaching. By taking simple steps now, you can streamline your CollegeAdvantage 529 plan withdrawal process to pay for your child’s qualified higher education expenses promptly.

    Log in to your Ohio’s 529 Plan account

    First, log in to your Ohio 529 Plan account. If you haven’t reviewed your account recently, you’ll need to follow the two-step authentication procedure. Implemented in June, this industry standard adds an extra layer of security to protect your important college savings account information from phishing and identity theft attacks. If you have further questions, please watch the video to the right of the login button, visit Two-Factor FAQ page, or call our Customer Service Department from 8:30 a.m. – 6 p.m. EST Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734).  The two-step authentication process for online account access will become mandatory in late-August 2017.

    Update bank information

    Once you’ve accessed your account, confirm that your banking information is current. If it’s not, update it now. For security reasons, the bank account information must be on file for 15 business days before a withdrawal can be processed. This is a one-time waiting period, unless you change your banking information. To add your current bank account details, select your beneficiary’s account. Then look on the left side of the screen and choose “View Profile and Document.” From there, select bank information to update your records.

    Online withdrawal and online payment

    For the quickest turnaround time, request a 529 plan withdrawal online, with the withdrawal being sent electronically to you as the account owner, and follow it with an online payment to the school. This is the fastest and most accurate method of paying a higher education institution.

    Once an online 529 withdrawal is requested, you can choose to have the funds sent directly to the post-secondary education institute, your bank account, or to the account beneficiary’s bank account. Withdrawals requested before 4 p.m. EST on business days will be processed in three business days. If you opted to have the withdrawn funds to be sent to your, or the beneficiary’s, bank account, it may take additional time for the bank to show the 529 withdrawal as deposited.

    If you elected for the withdrawal to go directly to the school, make sure to provide the correct student ID number and the correct school address on the withdrawal form. CollegeAdvantage does not provide school addresses.

    If you chose to have the 529 funds deposited to your or your beneficiary’s bank account, use the college’s online portal to pay your child’s college costs. Make sure you have the correct student ID number. Processing times will vary by school; ask the bursar’s office what a good time period would be to start the withdrawal process so you can avoid late penalties.

    Online withdrawal and paper check delivery

    Again, make your withdrawal request online. You can opt to have CollegeAdvantage mail the payment directly to the school. Depending on the United States Postal Service’s delivery schedule and the school’s processing procedures, this may be a slower process. You must provide the correct school address to where the check should be sent as well as the student’s school ID number. Please note, CollegeAdvantage does not provide school addresses.

    Of course, if you selected to have the 529 withdrawal deposited into your or the beneficiary’s bank account, you can mail your personal check to the post-secondary education institute with the correct student ID on it.

     

    Paper withdrawal and paper check delivery

    If you prefer to use a paper form, CollegeAdvantage offers a Withdrawal Request Form. This is the slowest withdrawal and payment method. In order to save time, fill in the withdrawal request form online; although you can also print, fill out, and mail in the form.

    The withdrawal can be sent by a mailed check to the school. To have the payment sent directly to the school, review the “Paper Check Delivery to the School” information to fill in section 3C of the Withdrawal Request Form.

    You also have the option to have the withdrawn funds be electronically deposited into yours or the beneficiary’s bank account. There’s also the option to have the withdrawal check mailed you or the beneficiary. After the withdrawal is in your or the beneficiary’s account, you can directly pay the school.

    The most important move for you to make this summer is to prepare now for upcoming 529 withdrawals. If necessary, update your bank information on your CollegeAdvantage accounts and find out how much time the school needs to process your payment. These simple steps will expedite the withdrawal so you can pay your child’s college costs on time. If you have any further questions, our Customer Service Department is available to help from 8:30 a.m. – 6 p.m. EST Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734).

  • Asset Exchanges Allowed Twice A Year With Ohio’s 529 Plan

    by Amy Lyle | Jul 26, 2017

    When you set up your child’s 529 plan, you selected investment options in which to place your college savings. Now that some time has passed, you’ve done additional research and would like to change your 529 investment strategy. Can you do it? Yes, you can.

    At the end of 2014, Congress passed a bill, which the president signed, that made legislative changes to Internal Revenue Code (IRC) Section 529. The new provision allows 529 account owners to make two exchanges of assets in an account from one investment option to another investment option in a calendar year. Previously, 529 account owners were limited to only one exchange among investment options per calendar year.

    How To Make An Exchange In Ohio’s 529 Plan

    You can make these exchanges to your college savings account with Ohio’s 529 Plan, CollegeAdvantage. It’s simple; log-in to your Direct Account(s) and select the account in wish you want to make an exchange. You will then select the link that says “Change Investment Options.” There will be a link on this page called “Exchange Now.” You will select this option and follow the directions within the system to process the exchange. This is the quickest and easiest way to process the exchange. 

    The other option is to open exchange form online, mark from which current CollegeAdvantage Direct 529 plan investment option you’d like to exchange to another option. You can select all of the funds within an investment option to be exchanged or just a percentage of it.

    What About Age-Based Portfolios Exchanges?

    In the CollegeAdvantage ready-made, age-based portfolios, assets will automatically exchange from one age band to another, as the beneficiary ages. This will not be considered an exchange and will not count against the two exchanges per calendar year limit.

    What About An Exchange Of Assets From An Advisor Plan To A Direct Plan?

    If you have a CollegeAdvantage Guaranteed 529 Plan or a CollegeAdvantage 529 Advisor Plan, and you choose to transfer the assets to the CollegeAdvantage Direct 529 Plan, it is considered an exchange of assets, not a rollover. Therefore, it will be subject to the twice per calendar year limitation placed on exchanges by IRS rules governing 529 plans since both plans are part of the CollegeAdvantage Program.  Even though it is considered an exchange because it is within the same program in Ohio, you will be required to complete the Incoming Rollover form.

    What If You’re Changing The Account Beneficiary?

    If you’re changing the beneficiary of your Ohio 529 plan to another member of the family — by blood, marriage, or adoption — then you can place those funds for the new beneficiary in different investment options. This will not be counted as an investment exchange for the purpose of the two exchanges per year for the same beneficiary. Why? In order to process the transfer, the original 529 plan’s assets must be liquidated and the funds will then be invested according to your new investment option selections.

    What Is The Difference Between An Exchange And Allocation Exchange?

    An exchange is a transference of current 529 funds from one investment option to another. An asset allocation is a change to future 529 contributions. These instructions for future deposits may be changed at any time online or by mailing in the form to the address listed on it.

    Have more questions? Call our Customer Service Department from 8:30 a.m. – 6 p.m. EST Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734). Already have an account and would like to make some changes? Log in to your Direct 529 Plan account to increase automatic deposits or payroll deduction contribution amount, update information, or perform account maintenance. And remember, 529 college savings plan is 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 | Jul 21, 2017

    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 a CollegeAdvantage 529 account, there’s an additional tax advantage. Ohioans can deduct their 529 contributions from their Ohio taxable income, up to $2,000 per year, per beneficiary, with unlimited carry forward. In other words, an Ohio resident can take up to a $2,000 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 $6,000 per year. Because of the unlimited carry forward for the state income tax deduction, it means that $2,000 per year is not a contribution cap. The taxpayer can continue to subtract $2,000 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 CollegeAdvantage, Ohio’s 529 Plan, 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.

    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 $14,000 ($28,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. Additionally, an individual can even contribute up to $70,000 per beneficiary in a single year ($140,000 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.

  • Do 529 Plans And Other Savings Affect Need-Based Financial Aid?

    by Amy Lyle | Jul 17, 2017

    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 need-based 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.

    Need-based federal and state financial aid

    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.

    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 need-based 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 needs-based 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 $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 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.

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