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How Much Do You Really Know About 529 Plans? Take Our Quiz to Find Out!
Use it or lose it. You’ll forfeit your 529 plan savings if your child doesn’t go to college.
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529 college savings plans are very flexible. You can transfer some or all of your assets to another family member including children, siblings, nieces, nephews, or even yourself.
If you do decide to withdraw money for a nonqualified expense, the earnings may be subject to federal and state income taxes plus a 10% penalty.
That’s right!
529 college savings plans are very flexible. You can transfer some or all of your assets to another family member including children, siblings, nieces, nephews, or even yourself.
If you do decide to withdraw money for a nonqualified expense, the earnings may be subject to federal and state income taxes plus a 10% penalty.
When applying for financial aid, having a 529 college savings plan has a large impact on your eligibility.
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The effect may be minimal on your financial aid eligibility. The Free Application for Federal Student Aid (FAFSA) requires that you report 529 savings, and the Expected Family Contribution (EFC) factors in all of the parent assets—including a 529 plan at 5.6%. So the plan is often just considered another asset.
That’s right!
The effect may be minimal on your financial aid eligibility. The Free Application for Federal Student Aid (FAFSA) requires that you report 529 savings, and the Expected Family Contribution (EFC) factors in all of the parent assets--including a 529 plan at 5.6%. So the plan is often just considered another asset.
You may only invest in your state’s 529 plan.
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You are not restricted to only your own state’s 529 plan. Most 529 plans allow residents of any state to participate, giving you the flexibility to choose the college savings plan that’s right for you and your family.
529 plans vary from state to state, and each has somewhat different costs, investment options, and tax incentives. In addition, an account holder may have limited investment options, depending on the particulars of the plan you select. When choosing the plan that works for your goal, compare the features of your state’s 529 plan with others to weigh the plan benefits.
That’s right!
You are not restricted to only your own state’s 529 plan. Most 529 plans allow residents of any state to participate, giving you the flexibility to choose the college savings plan that’s right for you and your family.
529 plans vary from state to state, and each has somewhat different costs, investment options, and tax incentives. In addition, an account holder may have limited investment options, depending on the particulars of the plan you select. When choosing the plan that works for your goal, compare the features of your state’s 529 plan with others to weigh the plan benefits.
529 college savings plans offer low minimum contributions and high maximum limits.
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A college savings plan is an easy and affordable way to save for college. Many 529 plans start at $25 per month with maximum contribution limits of up to $475,000.
That’s right!
A college savings plan is an easy and affordable way to save for college. Many 529 plans start at $25 per month with maximum contribution limits of up to $475,000.
You can only use your 529 college savings plan at state universities.
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Most 529 plans allow you to use your assets at nearly all colleges, universities, community colleges, graduate, and vocational schools nationwide as well as select international institutions. In addition, college savings plans can also be used to pay for tuition expenses at K-12 public, private, and religious schools.
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Most 529 plans allow you to use your assets at nearly all colleges, universities, community colleges, graduate, and vocational schools nationwide as well as select international institutions. In addition, college savings plans can also be used to pay for tuition expenses at K-12 public, private, and religious schools.
My child is getting a scholarship, so there’s no need to save.
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Even if your child receives a scholarship, not all expenses may be covered. In fact, only about 0.1% of all college students receive full-ride scholarships each year. A 529 college savings plan can help you meet financial obligations that a scholarship might not include.
That’s right!
Even if your child receives a scholarship, not all expenses may be covered. In fact, only about 0.1% of all college students receive full-ride scholarships each year. A 529 college savings plan can help you meet financial obligations that a scholarship might not include.
We can use our child’s 529 plan account to purchase a computer for his dorm room.
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Computers are included as a qualified educational expense for 529 plan distributions in addition to tuition, room and board, books, supplies, and equipment required by a qualified institution of higher education. The money is yours to decide how you want to spend it, but any earnings used toward a nonqualified distribution may be subject to federal and state income taxes, in addition to a 10% federal tax penalty.
That’s right!
Computers are included as a qualified educational expense for 529 plan distributions in addition to tuition, room and board, books, supplies, and equipment required by a qualified institution of higher education. The money is yours to decide how you want to spend it but any earnings used toward a nonqualified distribution may be subject to federal and state income taxes, in addition to a 10% federal tax penalty.
529 plans are only for wealthy people. Financial aid will cover the costs.
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You don’t need to be rich to save for college. In fact, 529 plans are designed to make saving simple and affordable. You might be surprised to learn how much you can earn by contributing as little as $25 a month.
That’s right!
You don’t need to be rich to save for college. In fact, 529 plans are designed to make saving simple and affordable. You might be surprised to learn how much you can earn by contributing as little as $25 a month.
You can ask family and friends for gift contributions to your child’s 529 account to celebrate any occasion.
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Anyone can enroll or contribute to a 529 college savings plan. That means your parents, grandparents, uncles, aunts, and friends can give the gift of higher education. In fact, they don’t even have to open an account to make a gift contribution to your college savings plan.
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Anyone can enroll or contribute to a 529 college savings plan. That means your parents, grandparents, uncles, aunts, and friends can give the gift of higher education. In fact, they don’t even have to open an account to make a gift contribution to your college savings plan.
My child is about to enter high school, so it’s too late to save.
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It’s never too late to enroll in a 529 plan, but the sooner you save, the better. Any earnings saved and used toward qualified educational expenses are tax-free, which means more money in your account for higher education.
That’s right!
It’s never too late to enroll in a 529 plan but the sooner you save the better. Any earnings saved and used toward qualified educational expenses are tax-free which means more money in your account for higher education.
10 out of 10!
You’re a certified 529 plan genius.
Congratulations! Tell your friends and family.
7 out of 10.
Not bad smarty pants. You get an honorable mention.
You’re on your way to learning everything there is to know about a 529 plan.
4 out of 10.
You didn’t make the grade. It’s study hall for you.
Dust off those books and brush up on 529s so you’re ready for college when the time comes.
0 out of 10.
What a bummer. It’s summer school for you.
You have a lot to learn, but fortunately, we’ve made it easy for you to become a 529 expert in no time!
529 Plans Managed by T. Rowe Price
The sooner you start, the more you can save. To explore the 529 plan that’s right for you and your family, select from the three options below.
