Not only is September back-to-school season, it’s also College Saving Month! Whether you’re watching your child board the school bus, or walking or driving them to school, you should know that’s it’s never too late, and never too early to save for their education after high school. A 529 plan is a smart and tax-free way to save for their college and career training.

As of June 30, 2025, Ohio 529 CollegeAdvantage has $19.5 billion saved in over 672,717 accounts. Why are so many families choosing to save with Ohio 529? We help forward-thinking parents make their children’s education after high school manageable. Ohio 529 has informational resources and tools that parents can use as they develop their college savings strategy. There are many reasons why parents are saving for their children with Ohio 529. Here are ten.

1) Save in Ohio 529 and use it nationwide

Just because you are saving in Ohio 529, it doesn’t mean your child has to attend an Ohio school. You can use your Ohio 529 account nationwide at almost any school you are comfortable sending your child and your money. 529 plans can be used at any post-secondary school that accepts federal financial aid. If you want to confirm an institution accepts federal financial aid, then do a Federal School Code search. If it has one, then you can use your 529 funds there. 

2) Not just for four-year schools

Ohio 529 can be used for whatever comes after high school, including trade and specialty schools, community colleges or technical schools, certificate programs, four-year universities and colleges, all types of graduate school, including law school and medical school. Additionally, 529 funds can pay for qualified costs for apprenticeships that are registered with the Secretary of Labor’s National Apprenticeships Act.

As an adult, you too can use a 529 college savings plan for your own continuing education. Whether it’s to complete your degree, earn additional credentials to grow your career, or take a new career path, a 529 plan can help you earn the education for which you’re striving.

3) Just $25 to start

You can start saving for your child’s future with as little as $25 to open an Ohio 529 account. Additional contribution can be made for $25, too. Ohio 529 doesn’t believe in charging you to do the right thing for your children or grandchildren so there are no fees to open an Ohio 529 account. We know there’s a lot of expenses in your budget but saving for the next steps for their education shouldn’t be a large draw on the family finances. After all, $25 saved now is $25 (plus compound interest) that doesn’t have to be borrowed later.

4) We’ve got an app!

Ohio 529 offers the READYSAVE 529 app, so you can open an account and manage your ongoing contributions from your phone! The app makes it easy for you to open an account, access information for an existing account, track account growth, and make one-time or recurring contributions from your bank account from your cell phone. You can also send an Ugift invitation to your family and friends to contribute to your child’s higher education with the READYSAVE529 app.

The READYSAVE 529 app is available at the Apple and Google Play app stores. Once installed, select Ohio 529 CollegeAdvantage from the list to open an account or log in to an existing account.

5) Tax benefits

There are three main tax benefits available to every Ohioan who saves in an Ohio 529 account.

First, while saving with Ohio 529, all earnings grow tax-free. This means that all the investment growth is yours to use for your children’s future college costs. Compound interest — the interest earned on contributions, earnings, and interest already accumulated in the 529 account — is included in your tax-free earnings. To see just how tax-free growth adds up, use the tax benefit tool to see the difference between a 529 account and a taxable savings account.

Second, withdrawals to cover qualified higher education expenses are tax-free at federally accredited programs.  As with all 529 college savings plans, the burden of proof for qualified expenses and withdrawals is on the account owner for tax purposes. Be sure to keep documentation of your payments for tuition, room and board, and other 529-qualifed expenses.

Third, an Ohio resident who saves in an Ohio 529 account can deduct their contributions from their taxable state income. The deduction amount is $4,000 per year, per beneficiary, with unlimited carry forward. This means that $4,000 is not a contribution cap. If an Ohio taxpayer contributes more than $4,000 in one year, they can continue to subtract $4,000 per year, per beneficiary, from their State of Ohio taxable income until all 529 contributions have been deducted.

6) Flexible uses for 529 withdrawals

All 529 withdrawals are tax-free for qualified higher education expenses, which are those required costs to attend a post-secondary education institution. As is the case with all 529 college savings plans, the burden of proof for tax purposes for qualified expenses and withdrawals is on the account owner. Retain all documentation of your beneficiary's room and board and other 529-qualifed expenses.

Tax-free 529 withdrawals can also pay for certain expenses associated with apprenticeship programs that are registered and certified by the Secretary of Labor under the National Apprenticeship Act.

529 withdrawals can also pay for the principal and interest on qualified education loans for the beneficiary of an account or the beneficiary’s siblings. The loan repayment provision applies to repayments up to $10,000 per beneficiary. The $10,000 is a lifetime amount, not an annual limit. Consult your qualified tax advisor for specific information.

Did you know that you can use your 529 plan to pay K-12 tuition up to $10,000 per student, per year, for enrollment at public, private, or religious elementary or secondary school? If there are multiple accounts for a student, the combined 529 distributions to pay for their K-12 tuition is limited to $10,000 per year. Consult your qualified tax advisor for specific information.

You can jump start your children’s retirement savings by rolling over any unused 529 funds to a Roth IRA. You can read more about this feature below.

7) Save with loved ones’ contributions

When family and friends ask for gift ideas, tell them that they can help with a big milestone in your child’s life – their college and career training —with a contribution to your child’s 529 plan. With Ugift, it’s simple for anyone to contribute to your CollegeAdvantage Direct Plan account. Log in to your 529 and click on Ugift to receive a unique code for your account. This code allows others to make online contributions from their bank account to your 529 plan without the actual account number at Ugift529.com​. The gift giver can make one-time or recurring electronic contributions at any time. If they are Ohio residents, they can deduct their Ohio 529 contributions up to $4,000 from their state taxable income.

8) Minimum effect on financial aid

The Free Application For Federal Student Aid (FAFSA) is scheduled to accept 2026-2027 academic year applications beginning Dec. 1. Once available, families need to complete the form as FAFSA is the application for federal financial aid used to attend four-year colleges and universities, community colleges, trade and vocational schools, and graduate schools. Most higher education institutions will use this FAFSA data to determine the amount of financial aid the school can provide to a student.

Being proactive by saving for your child’s education in a 529 plan will not have a significant impact on your financial aid eligibility. Current federal guidelines state that if a student is a dependent and the 529 account is owned by a parent, then the account will be considered the parent’s asset and will be calculated at a maximum of 5.64% of its value. So, let’s say, you’ve saved $10,000 in your 529 account. Only $564 would be considered as an asset on FAFSA. And wouldn’t you rather have $10,000 for college than potentially lose less than $564 of financial aid?

Also, 529 funds from a grandparent-owned 529 funds are not considered as an asset to beneficiary and won’t be included on the calculations for financial aid.

9) What if your child doesn’t want to go to college?

You have options if your child doesn’t want to pursue further education right after high school. First, there is no deadline on when to use a 529 account. So, you can wait to see if your child changes their mind. The funds will be ready to use if they decide to pursue their higher education at a four-year program, community college, trade or technical school, apprenticeship, or certificate program later.

If your child absolutely decides against pursuing a higher education, you can transfer the 529 account to another member of the family – whether related by blood, marriage, or adoption — without any fees.

If you reach a point where your 529 account is simply not going to be used, you can request a non-qualified withdrawal from it. The earnings-only portion of the withdrawal will be taxed on the federal, state, and local level. Like other tax-advantaged saving programs, there will be a 10% federal tax penalty assessed for withdrawing money from the 529 plan for costs that aren’t qualified higher education expenses. Before you elect to make a non-qualified withdrawal, first talk with your financial advisor, or tax consultant to evaluate your options.

As mentioned previously there’s another option for your 529 account if your child or grandchild decides not use the account – the Roth IRA rollover.

10) Rollover your Ohio 529 account to a Roth IRA

You can now roll over the remaining Ohio 529 funds into a Roth IRA for the same beneficiary of the original account. So, if your child doesn’t use all the funds in the account, you can use those remaining 529 funds to kick start their retirement savings. Your 529 account must meet some requirements to use this new qualified distribution. First, a 529 account must be open for the beneficiary for 15 years. Second, the Roth IRA must be for the same beneficiary of the 529. Third, your contributions—also called the principal—must have been in your Ohio 529 account for at least five years before the Roth IRA rollover. Fourth, you can only roll over 529 funds up to the yearly Roth IRA contribution limit, which is $6,500 for 2023. Fifth, the lifetime maximum 529 amount allowed for the Roth IRA rollover is $35,000.

Visit Ohio 529 online to start saving today for your child’s future education. An investment in a 529 plan is an investment in your child where every dollar saved today is a dollar that doesn’t have to be borrowed later. Learn, plan, and start with Ohio 529 today at CollegeAdvantage.

This article was originally posted in August 2020 and has been updated to reflect current information for 2025.