Nov. 11 is Veterans Day when we honor all U.S. military veterans. here are over 15.7 million military veterans in the United States and over two million men and women actively serving in our active duty, National Guard, and reserve armed forces. Each one took an oath to “support and defend the Constitution of the United States against all enemies foreign and domestic.” Among the freedoms that this oath and this commitment to service protects is the freedom to choose a path of education, training, or certification that ensures a rewarding career and economic prosperity.
GI Bill
U.S. Department of Veterans Affairs administers the Post-9/11 GI Bill. This federal assistance includes 36 months of education benefits: full in-state public school tuition and fees (there is a national maximum rate cap for tuition and fees for attending a private college), monthly housing allowance, and an annual books and supplies stipend.
If you choose not to use these benefits for your own continuing education, you can transfer their unused GI bill benefits to your dependents — spouses and children. The education benefits can also be divided among the dependents, to pay for their college or vocational training.
529 plans work with GI Bill benefits
What are 529 plans? These specialized accounts are a tax-advantaged way to save for college with tax-free earnings and tax-free withdrawals. Some states offer state income tax deductions or credits for 529 contributions. With Ohio 529 CollegeAdvantage, Ohio residents can currently deduct 529 contributions up to $4,000 per beneficiary, per year from their state income tax. However, with unlimited carry forward Ohioans can continue to deduct a large 529 plan contribution from their state income tax until all of it has been deducted.
A 529 plan can supplement these service-earned education benefits. If you split your Post-9/11 GI Bill benefits among multiple dependents, then a 529 plan can help cover the remaining qualified higher education expenses associated with attending a two-year or four-year college, trade or vocational school, certificate or credentialing programs, and apprenticeships approved by the U.S. Department of Labor. Eligible expenses range from tuition; mandatory fees; computer equipment and related technology and services; books; supplies, and equipment required for enrollment or attendance; room and board costs or off campus housing during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student. Room and board costs can also include rent for off-campus residency and groceries (non-taxable items), provided these costs are equal or less than the same room and board allowances from the accredited education institution. If your child is interested in an apprenticeship, your 529 funds can pay for qualified costs such as fees, textbooks, supplies, and equipment for the required trade.
Military academy attendance and 529 plans
What if you’ve been saving for college in a 529 plan and your child is selected to attend an U.S. military academy? You still have access to the college savings funds. While considered a non-qualified withdrawal, the parents can ask for a 529 plan disbursement up to the estimated cost of attending the military academy without incurring a 10% federal tax penalty. The earnings portion only of the withdrawal will be subject to federal, state, and local taxes.
Why save in Ohio’s 529 Plan?
Trusted financial industry investment research company Morningstar annually reviews the nation’s 529 college savings programs. Morningstar then ranks the 529 plans in a report released in November 20226.
Ohio 529 is pleased to announce that the CollegeAdvantage Direct 529 Plan maintained its silver rating for the fourteen year in a row. In addition, BlackRock CollegeAdvantage, Ohio’s Advisor 529 Plan retained its silver ranking for the third year in a row. This makes Ohio one of only two states that have both their Direct and Advisor 529 Plans ranked as medal-class college savings programs. The high ranking highlights the strength of and the industry’s regard for Ohio’s 529 Plan as one of the best in the nation.
Ohio 529 was selected as Veteran Saves Week 2025 Saving Champion for our continual support of this important program. Veteran Saves is part of the nonprofit Consumer Federation of America and is an initiative of America Saves. Veteran Saves Saves works with government agencies, defense credit unions, military banks, and nonprofit organizations to promote savings and debt reduction.
CNBC has also selected Ohio 529 as one of the five best programs nationwide. As they wrote, “With the CollegeAdvantage (Ohio) 529 plan, anyone can sign up. There’s a good mix of investment options (including FDIC-insured accounts), low fees and plans from top companies like Vanguard and Fifth Third Bank. The minimum contribution amount for a CollegeAdvantage plan is only $25 and Ohio residents may qualify for a tax deduction.”
On this Veterans Day, let us take pause and express our gratitude to all those who have served and are serving our great nation, for the many blessings of freedom we enjoy would not be possible without their willingness to answer the call to service.
