How To Make A Ohio’s 529 Direct Plan Withdrawal
Before you know it, the new school year will be upon us. Set aside time this summer to prepare your Ohio 529 Plan account to promptly pay the next round of your child’s higher education expenses. Here is some guidance on how to simplify the withdrawal process from your CollegeAdvantage Direct 529 Plan.*
Start the process this summer by confirming that two-factor authentication is set up on your CollegeAdvantage Direct 529 Plan. As the name implies, you’ll need to verify your identity twice.
Log in as normal to your Ohio 529 Plan account with your user name and password from a secure device. Your phone number must be current in your online account profile. The number is necessary to set up two-factor authentication, as you will receive either an automated outbound call or a SMS text to receive your PIN (Personal Identification Number). As long as your phone numbers are current, you will either be able to receive a SMS text or an automated outbound call. Please be sure you phone service does not block system generated phone calls or texts.
If your phone number is not up to date, please call the Customer Service Department for help to set up a PIN. The team is available from 8:30 a.m. – 6 p.m. ET Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734).
Once you have the PIN, you will need to log in again within five minutes as the session is only valid for 10 minutes. If you miss that time period, you’ll need to request a new PIN. Once the PIN is entered, mark the 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, visit the Two-Factor FAQ page or watch a video on the login page that describes the two-factor authentication process. As with any account 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). You can also email our Customer Service Department at email@example.com
Update banking information
Next, verify that your home address and bank account information are correct on your account. If it’s not, update that information now. For security reasons, this information must be on file with Ohio’s 529 Plan for 15 calendar days before a withdrawal can be processed. To update your records online, select your beneficiary’s account. Then look on the left side of the screen, choose “View Profile and Document.” If you need to change your address, select “Profile” to edit your address. If you need to change bank accounts, select “Bank Information” to make the updates.
How to make an online withdrawal
After updating all your information, you will be ready to make a 529 withdrawal once you receive the higher education bills.
The fastest method to pay an accredited higher education institution is to make a withdrawal request online. Start the process by logging into your account. Next, select the beneficiary’s account from which to make a withdrawal in order to pay for that beneficiary’s qualified costs. Once you’ve picked the correct account, go to the left side of the screen and scroll down to the link, “Make a withdrawal.” After that, follow the prompts to make a withdrawal.
You will have three options on where to send the funds: to the school, to your bank account or check sent to you, or to your beneficiary’s bank account or a check sent to the beneficiary. 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. It will take additional time for your banking institute to show that the deposited funds. 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 time period to start the withdrawal process to ensure that the payment won’t be late.
If you’ve chosen for the check to go directly to the school, please be sure to provide Ohio’s 529 Plan with the correct student ID number and the correct school address on the online withdrawal form. Ohio’s 529 Plan does not provide school addresses. The payment will be mailed directly to the school. Again, ask the bursar’s office how long this method would take and then make the withdrawal according to their provided timeline to avoid late penalties.
How to make a withdrawal with a paper form
You can mail in a Withdrawal Request Form, which will be the slowest withdrawal and payment method. 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 select 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 slowest method of paying the college expenses. If you choose this route, please start with the withdrawal process as early as possible to avoid any late penalties. You may want to verify with the school bursar’s office how long this process will take for them to complete.
No matter which method you choose to make the withdrawal – whether online or by filling out paperwork - make sure to use the withdrawal funds to pay for the qualified higher education expenses in the same calendar as you made the withdrawal. As the account owner, you are responsible to maintain the records showing that the Direct 529 Plan withdrawals are used for qualified costs for the IRS.
Contributing to your 529 to make a withdrawal
If you want to deposit additional funds to your Ohio’s 529 Plan to pay of these upcoming qualified expenses, these new contributions must be in your account at least seven business days before those funds can be distributed and the withdrawal processsed. 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 is to prepare now for upcoming 529 withdrawals. By taking action this summer, your 529 account will be set up to pay your child’s college costs this fall. 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). Manage your Ohio 529 Plan account at CollegeAdvantage.com.
*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 follow this guidance from 2020 to make a Guaranteed Plan withdrawal.
* *This article was originally published in July 2020 and has been updated to reflect new information for 2021.
Posted on March 23, 2022