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Ohio 529 Plan Reaches 13 Billion Dollar Milestone

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Ohio's 529 Plan Reaches A New Milestone in 2020

Families recognize the importance of saving for college, even in uncertain times. In fact, according to a recent survey from SavingForCollege.com, college savers are staying the course when it comes to their 529 accounts. The survey found that 67% of 529 account owners have made no changes to their contributions and another 15% actually have increased their contributions.

These families’ smart savings strategies are reflected in Ohio’s 529 Plan, CollegeAdvantage. At the end of Fiscal Year 2020, on June 30, 2020, Ohio’s 529 Plan reported a record $13.1 billion in Assets Under Management (AUM). This is a 5.6 % increase from the same point in 2019. CollegeAdvantage Direct 529 Plan experienced a 9.1% increase in AUM from this time last year and the Blackrock CollegeAdvantage Advisor Plan had 2.2% increase in AUM over last year.

Every year, Ohio’s 529 Plan strives to increase new accounts and new contributions each by 10% over the previous fiscal year. As of June 30, 2020 contributions to Ohio’s 529 Plan were up 12.1% over the same point in 2019 and new account openings were up 13.4% over the prior year.

The program’s low-cost, flexibility, investment line-up, and growth in assets makes Ohio’s 529 Plan the sixth largest 529 college savings plan in the country. Earlier this summer, Savingforcollege.com, the leading source for unbiased information on saving and paying for college, ranked CollegeAdvantage first in the nation for best performance in both the five-and 10-year categories.

Individuals who save through Ohio’s 529 Plan have a choice of two different plans: the CollegeAdvantage Direct 529 Plan for the do-it yourself investor or the BlackRock CollegeAdvantage Advisor 529 Plan for those who prefer the help of a financial advisor. “Now more than ever is the time to save and invest for educational or training costs after high school,” according to Tim Gorrell, Executive Director of Ohio’s 529 Plan, “and Ohio’s 529 Savings Program can be your trusted partner in realizing these savings goals.” 

Funds in CollegeAdvantage may be used for all types of qualified higher education expenses — whether for a typical four-year college or university, two-year community college, technical or trade school, or a certificate program. If the post-secondary school your child elects to attend accepts federal financial aid, Ohio’s 529 Plan can be used there. 

Ohio’s 529 Plan helps families in Ohio and across the country save money for their children’s future higher education or training with significant tax-advantaged benefits. All contributions and earnings grow tax free, and withdrawals from CollegeAdvantage are tax free when used to pay qualified higher education expenses. These qualified costs include tuition, fees, room and board, books, and computers.

With the 2019 passage of the SECURE Act, two new qualified higher education expenses have been added to 529 college savings plans. First, qualified costs for apprenticeships — such as fees, textbooks, supplies, and equipment like required trade tools — now can be paid with 529 distributions. Second, student loan repayments are now a qualified cost. Any student loan that qualifies for the federal student loan income tax deduction can be paid with a 529. There is a $10,000 lifetime limit per beneficiary. However, an additional $10,000 can repay qualified student loans for the beneficiary’s siblings.

Any Ohio resident who contributes to an Ohio 529 Plan account can deduct 529 contributions from his or her Ohio taxable income. The deduction has been increased to $4,000 per year, per beneficiary with unlimited carry forward. The $4,000 per year is the maximum deduction amount and not the maximum contribution amount.

Established Oct. 2, 1989, Ohio Tuition Trust Authority (OTTA) was originally created with the express purpose of helping middle-income families save for college. OTTA is the state agency that is the program administrator and sponsor of Ohio’s 529 Plan, CollegeAdvantage. For over 30 years, Ohio’s 529 Plan has provided families across the nation flexible options and educational resources to invest for higher education expenses after high school.

If you haven’t started saving for future higher education expenses, open your tax-advantaged Ohio 529 Plan today! lf you’d like to learn more about the tax-advantaged way to save for college, explore Ohio’s 529 Plan —The Plan That Can.

Posted on September 28, 2020

Ohio Tuition Trust Authority

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