Prepare Now For Your Upcoming Guaranteed 529 Withdrawals
The holiday season may be in full swing but the next school session is quickly approaching. Take the time to prepare for the next round of withdrawals by making sure all your account and address information is up-to-date in your CollegeAdvantage Guaranteed 529 Plan.* Once you do, you can be confident that your withdrawals to pay for your child’s qualified higher education expenses should not hit any snags. Please remember that as the account owner, you are responsible to maintain the records showing that the Guaranteed 529 withdrawals are used for qualified education expenses for tax records.
Effective July 31, 2018, the payout rates** for the CollegeAdvantage Guaranteed 529 Savings Plan are:
Tuition Unit: $105.80
Tuition Credit: $121.67
If there are qualified higher education expenses you would like to cover in 2018, please make your withdrawal when subsequent payment soon. Withdrawn funds should be used for qualified expenses incurred in the same year.
There are several ways to pay for your child’s college costs.
Update profile information
First, log in in your 529 plan. If you have changed addresses or financial institutions, update your bank account information as soon as possible. For security reasons, the bank account information must be on file for 15 calendar 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. ET 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 checked that your bank information is current, request an online withdrawal. This will be the quickest process to withdrawal funds from your Guaranteed 529 Plan.
You have the option of having the funds sent to the eligible education institution, your bank account or via check to you, or your beneficiary’s bank account or a check to the beneficiary. Withdrawals requested before 4 p.m. ET Monday-Friday will be processed in three business days. If withdrawn funds are being sent to a bank account, it will take additional time for the bank to show the 529 withdrawal as deposited. While filling out the form, make sure to provide your beneficiary’s name, correct student ID number and the correct school address on the withdrawal form. CollegeAdvantage does not provide school addresses.
Eligible education institutions prefer to have the payments electronically come from your bank account as the account owner or from your beneficiary’s bank account.
If you choose 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 once you have received the funds electronically to your bank account.. Again, 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 to avoid late penalties.
Pre-1996 account information
For pre-1996 accounts, online withdrawals can only be made to the school. The beneficiary is considered the controller of the pre-1996 account once they turn 18. If they, as the controller, choose to fill out a paper Withdrawal Request Form, the withdrawal can be issued to themselves, you as the account owner, or to the eligible education institution. The controller/beneficiary has to sign the withdrawal request form along with you as the account owner and your beneficiary’s signature must be notarized. In order to change this process, you as the account owner and your beneficiary must fill out and sign the pre-1996 Ownership Amendment Form contract. Then you, as the account owner, can continue to make withdraws without requiring your beneficiary’s signature.
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 your beneficiary’s bank account or mail the check to the higher education institution. This will be a slower payment process as it is dependent on the United States Postal Service’s delivery schedule and the school’s processing procedures. 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, your beneficiary, or the school, by printing the Withdrawal Request Form. You can fill out the form online then print it. Once completed, 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.
If you fill out a paper form for a withdrawal of $10,000 or more, the form must be notarized.
This is the slowest withdrawal and payment method. Please keep in mind that mail delivery — to bank accounts and/or to the school — will increase the processing times at each one of these 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 prepare 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 streamline the withdrawal so you can pay your child’s college costs in a timely fashion. Again, if you have any 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) or at CustomerService@CollegeAdvantage.com.
* 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.
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.
Posted on December 10, 2018