State Section 529 Plans
This section of the site provides state-by-state access to the various state section 529 plans. It includes all state prepaid tuition and college savings plans nationwide. Please visit each plan's web site for current information about fund expenses, minimum contributions and other information not summarized below.
A separate page discusses state income tax benefits, which may include full or partial state income tax deductions for plan contributions.
The State 529 Plans
Currently all states offer either a prepaid tuition plan or a college savings plan or both.
Sixteen states offer both. These include:
One state offers just prepaid tuition plans:
Thirty-three states offer just college savings plans. These include:
Are Prepaid Tuition Plans Guaranteed?
During a recession, state prepaid tuition plans feel financial pressure from two directions. State income tax revenue declines during and shortly after a recession, forcing the state government to cut its budget. State support for higher education is one of the first budget areas to get cut. Since tuition is one of the few revenue sources under a public college's discretionary control, the colleges make up the difference by increasing tuition. This typically results in double-digit tuition inflation for public colleges. In addition, recessions are often accompanied by stock market losses. The combination puts pressure on the actuarial assumptions behind the state prepaid tuition plan.
Unless there is a future turnaround in the stock market, the prepaid tuition plans may not be able to fulfill all of their obligations to investors. It is not uncommon for the prepaid tuition plans to react by closing to new investors or by increasing the premiums over current tuition rates charged to new investors. Prepaid tuition plans in Colorado, Kentucky, West Virginia, South Carolina and Wisconsin are closed to new investors.
Because of the risk that a plan might not fulfill its obligations, it is important to consider whether the plan is backed by the full faith and credit of the state. Of the states with prepaid tuition plans, only Florida, Maryland, Massachusetts, Mississippi, South Carolina, Texas, Virginia and Washington provide a guarantee. The Florida and South Carolina guarantees are limited, with the Florida guarantee limited to students within five years of enrollment in college and the South Carolina guarantee limited to a 4% return on investment.
State Section 529 Plans
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