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As a parent of a current or soon-to-be college student, it’s in your best interest to prep now to cover the costs for the next session. Here is some guidance on how to simplify the withdrawal process from your CollegeAdvantage Direct 529 Plan.*
Check the school’s accreditation
If you’re a parent with a recent high-school graduate, verify that your child’s preferred school does accept federal financial aid. If it does, then your 529 plan can cover qualified higher education expenses there and your 529 withdrawals will be tax-free. Go to FAFSA.gov and select the School Code Search to look up the schools your student may want to attend. These can include four-year, two-year, vocational schools, medical, dental or graduate programs, and other certificate or degree programs. If the institution appears on the list, then you can use your 529 plan there. This search will also supply information on the school, including in-state and out-of-state tuition and fees costs.
Before starting the withdrawal process to pay your child’s college costs, make sure you’ve set up the two-factor authentication for your CollegeAdvantage Direct 529 Plan. As the procedure’s name implies, you’ll need to take two steps to verify your identity.
The first step will be to log in as normal with your user name and password from a secure device. The second step will occur when you ask for a PIN (Personal Identification Number) – by text, by phone, or by calling our Customer Service Department. Once you have the PIN, log in again within five minutes. Session IDs are only valid for 10 minutes so if you need more time, you’ll need to request a new PIN. Once the PIN is entered, mark that device as trusted and the authentication process is complete. In order to keep the account secure, this process will repeat during the life of the account.
If you have more questions, you can find answers on this Two-Factor FAQ page or call our Customer Service Department at 1-800-AFFORD-IT (1-800-233-6734), which is open from 8:30 a.m. – 6 p.m. ET Monday-Friday. There is also a video, which describes the two-factor authentication process, on the Direct 529 Plan account login page.
Update banking information
Once in your account, confirm that your home address and bank account information are current. If it’s not, please update that information now. For security reasons, this information must be on file at Ohio’s 529 Plan for 15 calendar days before a withdrawal can be processed. Therefore, the earlier the information is updated, the sooner your withdrawal request will go through. To update your records online, once you’ve logged in select your beneficiary’s account. Then look on the left side of the screen, choose “View Profile and Document,” and then, select bank information to make the updates.
How to make an online withdrawal
Now that all your information is current, move forward with your withdrawal. The fastest method to pay an accredited higher education institution is to make a withdrawal request online. You have three options on where to send the funds: to the school, to your bank account, or to your beneficiary’s bank account. Withdrawals requested before 4 p.m. ET Monday-Friday will be processed in three to five business days. If you choose for the withdrawal to be deposited into a bank account, it will be sent electronically. However, you will need to allow more time for your banking institute to show that the funds have been deposited.
Once the 529 withdrawal is in your or your beneficiary’s bank account, use the school’s online portal to pay your child’s qualified higher education expenses. Make sure you enter the correct student ID number. Payment processing times will vary; check with the school bursar’s office to confirm the best timeframe to start the withdrawal process to avoid any late penalties.
If you elected for the withdrawal to go directly to the school, please be sure to provide CollegeAdvantage with the correct student ID number for your child and the correct school address on the online withdrawal form. Ohio’s 529 Plan does not provide school addresses. The payment to cover your child’s higher education expenses will be mailed directly to the school. Depending on the United States Postal Service, as well as the school’s processing procedures, this can be a slower payment process.
How to make a withdrawal with a paper form
If you prefer to fill out a paper Withdrawal Request Form, please note this is the slowest withdrawal and payment method. In order to save time, fill in and then submit the form online. However, you can also print, fill out, and mail in the withdrawal request to the address found on the top of the first page of the form. 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 form. A check for the withdrawn funds will be mailed directly to the school.
You can also opt to have the withdrawal mailed to your home or sent to your or your beneficiary’s bank account electronically. Once the funds are in a bank account, you can either mail a check to the school or use their online portal for payment of the education expenses. Again, this is will be lowest method of payment of the college expenses. If you choose to go this route, please start with the withdrawal process as early as possible to avoid any late penalties.
Contributing To Your 529 Account To Make A Withdrawal
If you plan to make additional deposits to your Ohio’s 529 Plan for payment of these upcoming qualified expenses, contributions must be in an account at least seven business days before those funds can be distributed. This and other information is covered in the Withdrawals section on page 16 of the CollegeAdvantage Direct 529 Savings Plan Offering Statement and Participation Agreement.
The most important step to take this summer is to prepare for upcoming 529 withdrawals. By taking action now, your 529 account will be set up to pay your child’s college costs on time. Every dollar you saved is a dollar that doesn’t have to be borrowed which makes Ohio’s 529 college savings plan an excellent alternative to student loan debt. If you have any further questions, our Customer Service Department is available to help from 8:30 a.m. – 6 p.m. ET Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734). Ohio’s 529 Plan, CollegeAdvantage, is your plan, your way.
*Please note that this is the withdrawal process for CollegeAdvantage Direct 529 plan accounts only. The withdrawal process is different for the CollegeAdvantage Guaranteed 529 Plan. Please visit here for guidance for Guaranteed Plan withdrawals.
Posted on July 18, 2018