|
College Funding |
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529 Plans |
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| How much can you invest? |
-Perhaps as low as $25 a month -Varies by State. -Annual contribution limit is $13,000 per person |
| Who controls the account? | -Account owner, not beneficiary |
| Tax Treatment |
-Tax deferred growth -Qualified withdrawals are tax free |
| Restrictions on using the money |
-Withdrawals must be used for a wide range of qualified higher
education expenses -Eligible institutions include post-secondary institutions |
| Financial Aid Considerations | -Considered the account owner’s assets |
| Advantages |
-Contributions can be made by anyone -Account owner retains control -No family income restrictions -Plans can be transferred to another qualifying family member without penalty or to a qualified tuition program once every 12 months |
| Disadvantages | -Tax and
10% penalty on earnings for non-qualified withdrawals -Investment options are limited to those offered by a particular plan |