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You've taken the first step toward your savings goals. Saving for college, graduate, or even a vocational school is more affordable with the tax-advantaged benefits offered by the T. Rowe Price College Savings Plan.
A 529 plan is a tax-advantaged way for families to save money for college tuition and education-related expenses. You make contributions to your plan using after-tax dollars, but earnings are tax-deferred while invested and tax-free when used for qualified educational expenses such as tuition, fees, room and board, books, supplies, computer technology, and equipment as well as certain expenses for special needs students. The “529" refers to the section of the Internal Revenue Code that created these college savings plans.2
Our 529 plan is an excellent way to help your child, grandchild, or loved one save for college. Here’s how it works. You contribute to an account that you control on behalf of a specific beneficiary. You can withdraw the money tax-free anytime—as long as it’s used to pay qualified educational expenses at any eligible private or public college, university, graduate, or vocational school anywhere in the U.S.2
You always have access to the savings in your account for anything that life throws your way. Flexibility like this is why our plan suits nearly every budget or savings goal.
Based on the year your child will enter college, our Enrollment-Based Portfolios automatically adjust to a more conservative strategy to reduce risk as that date nears. Our Static Portfolios offer a fixed asset allocation strategy, which means you are able to decide how long your account should remain invested in a particular fund.
No matter what option you determine is best for you and your family, it takes only $50 a month to get started.
It’s a great way to save for college whether you’re a grandparent, family member, or family friend. And if you’d rather not open an account of your own, you can make a gift contribution to any child’s college savings plan.
There are no limits on age, income, or relationship with the beneficiary. And you can invest any amount up to the account balance maximum of $475,000 per beneficiary.
The gift of education is the perfect present for every child’s future.
What’s more, assets in the plan can be used at nearly every private or public college, university, graduate school, or vocational school in the U.S. It covers qualified expenses such as tuition, fees, room and board, books, supplies, computer technology, and equipment.
As an added benefit for those interested in attending the University of Alaska, participants with an active account for two or more years may be eligible for resident tuition rates without regard to residency.
Opening a T. Rowe Price College Savings Plan account is the first step to helping make higher education more affordable for a child. Getting started is easy. Open your college savings plan account today with as little as $50 a month or a $250 initial contribution. The sooner you get started, the more you can potentially save.
In addition to a 529 college savings plan, you can consider a few other college funding strategies to help pay for qualified higher education costs.
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.
1Assumes a 6% annualized return and a loan interest rate of 8% annualized. Total loan period is 14 years: 4 years in college plus 10-year repayment period. This depiction is for illustrative purposes and not representative of any particular investment or loan, and it does not consider any investment or loan origination fees. Amounts reflected are adjusted to today’s dollars and assume an inflation/discount rate of 3% annualized.
2Earnings from a nonqualified distribution are subject to income taxes plus a 10% penalty tax. State tax treatment varies. Tax benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, and other factors, as applicable.