- CollegeInvest Savings Plans
- Easy Money
General Questions (A Great Place to Start)
What is a 529 savings plan?
529 college savings programs are state-sponsored plans that were established to help families save money specifically for higher education expenses.
529s offer a variety of tax benefits leading financial experts to agree they’re one of the best ways to save for college.
Source: College Savings Foundation
Who can participate?
Parents, grandparents, other relatives, even friends!
In fact, you could open an account for yourself. Saving for college is not just for kids. If you’re seeking an advanced degree, looking for additional certification, wanting to finish college, or simply trying to keep up with new technology… a CollegeInvest college savings plan can get you there.
What if I don’t live in Colorado?
Then you’re missing out on 340 days of sunshine and some great skiing.
As for 529’s, we’re open to residents of every state. However, if you don’t file a Colorado State tax return, you won’t be eligible for a Colorado state income tax deduction.1 For some plans, there may be additional fees if you are not a resident of Colorado.
We recommend checking to see if your state offers a 529 college savings plan that offers special tax advantages.
When can I open a CollegeInvest savings plan?... When is it too late?
It is never too late to start. It is best to begin when your child is young, as your savings have the opportunity to increase over a longer period of time.
But even if your child is in high school, he or she can benefit from a CollegeInvest savings account to complement other financial aid funding sources such as grants, scholarships and loans.
Every dollar you save can help!
What are the eligible expenses covered by a 529 plan?
- Required fees
- Certain room and board expenses
- Required books
- Required supplies
What are the benefits of investing with CollegeInvest?
- CollegeInvest savings plans allow Colorado residents to deduct every dollar you contribute to your account from your Colorado state income taxes.1
- Earnings on your account can grow federal and Colorado state tax-deferred.2
- Withdrawals for qualified higher education expenses are also exempt from federal and Colorado state taxes.2
- CollegeInvest offers a wide range of investment options to meet your needs regardless of your saving and investment preferences, including Colorado’s only FDIC-insured 529 savings plan.3
- And, your savings can be used for qualified higher education expenses at any eligible college, university, trade or vocational school in the country. Even internationally.
What’s a beneficiary?
A beneficiary is a person, of your choosing, who is entitled to the benefits of the savings. It can be your son or daughter, a grandchild, a favorite niece or nephew, or even yourself!
Can more than one student be the beneficiary of a single account?
No. Only one student may be the beneficiary of a single account.
Can parents and grandparents open two separate accounts for the same student?
Yes, in fact this is quite common.
Is my student required to go to college in Colorado?
No. You may use your funds at any eligible public or private college, university, vocational and trade school across the country - even internationally.
What if my student doesn’t go to college?
What if my student gets a scholarship?
- You can use your funds to cover eligible items like room and board, books and other supplies that some scholarships don’t cover.
- You can change the beneficiary to another family member, or even yourself.4
- Simply leave the funds in the account for use for other eligible higher education expenses at a later time.
- Or, you may withdraw funds from your account equal to the scholarship amount, without incurring the 10% federal penalty on the earnings portion. The earnings portion (but not contribution amounts) of your withdrawal is subject to state and federal income tax.
Note, there may be different tax consequences for various account changes and/or withdrawals. You should carefully read the Plan’s Plan Disclosure Statement, or consult a tax advisor for your specific situation.
Will my account affect my student’s financial aid eligibility?
While any assets you or your student own will impact financial aid, 529 savings plans have some benefits over other savings accounts.
529s are generally viewed as a parental asset if the parent is the account owner. So the funds in a 529 account are weighed less heavily than other accounts owned by the student in the federal formula used by colleges to determine financial need.
In addition, if a grandparent owns the account there is no impact on the financial aid formula at all. (However, the student may have to report assets used from a grandparent-owned account as income the following year.)
Note however, that financial aid provided by a college or university may differ from federally-determined financial aid.
How do I open an account?
Once you have chosen your CollegeInvest college savings plan and read that plan's Disclosure Statement, choose your preferred enrollment option and follow the steps to complete the application process:
Direct Portfolio College Savings PlanSM
- Enroll online
- Download an enrollment kit
- Request an enrollment kit
Scholars Choice College Savings ProgramSM
Your financial advisor will work with you to open an account. If you don’t have a financial advisor but would like to find one, click here.
Smart Choice College Savings PlanSM
- Enroll online at www.efirstbank.com
- Open an account over the phone by calling 303-238-9000
- Visit the nearest FirstBank location
Stable Value Plus College Savings PlanSM
How do I contribute to my account?
It’s so easy! generally, you can contribute by:
- Sending in a check
- Sending in a money order
- Making a one-time transfer from your checking account
- Making a one-time transfer from your savings account
- Making a direct contribution
- Making periodic automatic transfers
- Establishing payroll deductions from your paycheck
- Setting up automatic transfers (it’s easy!!)6
Are there minimum contribution requirements?
Minimum to open:
- Direct Portfolio : $25 ($15 if contributing by payroll direct deposit)
- Scholars Choice: $250
- Smart Choice: No minimums
- Stable Value Plus : $25
Minimum subsequent contributions:
- Direct Portfolio: $15
- Scholars Choice: $25
- Smart Choice: No minimums
- Stable Value Plus: $25
Can I change my investment options?
The IRS regulates the ability for you to change your account’s asset allocation to fit your changing needs.
Here are the current guidelines:
- Existing Assets: you may change your investment option for all or a portion of your existing assets for any reason, one time during any calendar year, without incurring tax consequences or penalties.
For example: You currently have $5,000 in a “conservative fund option” but want to move the money to an “aggressive fund option”. You’re allowed to change your investment option (called a re-allocation) once per calendar year.
This limitation applies on an aggregate basis to all of your accounts for the same beneficiary within a single plan, and across accounts you may have for this same beneficiary in additional CollegeInvest plans.
You may, however, change the options for more than one account (for the same beneficiary) if all such changes are made simultaneously (at the same time). All simultaneous changes are treated as a single change, and not subject to tax consequences or penalties.
- Account Transfers: you can transfer from one 529 plan to another (thereby changing investment options) for the same beneficiary one time per twelve-month period. (Check with your plan for any restrictions on moving accounts within a plan.)
- Change in Beneficiary: you may also make a re-allocation anytime you change beneficiaries. (Subject to limitations regarding changing a beneficiary. Carefully review your Plan Disclosure Statement.)
- Future Contributions: Allocations for future contributions can be changed at any time.
For example: You currently have $3,000 in an “aggressive fund option”, and you would now like to contribute $100 from your paychecks for the next few months. You want the “new” contributions to be allocated into a “conservative fund option”.
You’re allowed to make this change with the new $100 going into your account since it’s a future contribution. However, your existing $3,000 will stay in the aggressive fund option if you have made any changes to that allocation within the current calendar year.
Note, each situation is unique and you should carefully review the Plan Disclosure Statement to understand limitations and the potential tax consequences. Or consult with your tax advisor for your specific situation.
Will I get hit with a bunch of fees?
There are certain fees and expenses associated with your account. With the tough economic times, we have worked on reducing certain fees to help make your education dollars go farther.
Please read the Disclosure Statement for the plan you are considering.
Can I check my account balance online?
Of course! All CollegeInvest plans have online account access and you can visit the LOGIN section of our website (in the top right-hand corner) to check your balance at any time.
What happens if we move out of Colorado?
You do not have to be a Colorado resident to save with CollegeInvest - anyone anywhere can participate. However, each state determines its specific state tax benefits and not all offer a state income tax deduction for contributions.7
How can account savings be used?
Savings can be used for a variety of eligible college-related expenses, including:
- Some room and board expenses
- Required books
- Required supplies
What schools are eligible?
Funds can be used at post-secondary educational institution participating in a student aid program administered by the U.S. Department of Education, including:
- Community colleges
- Public and private four-year colleges and universities
- Graduate and post-graduate programs
- Vocational and trade schools
Here are a few examples of schools you can use your CollegeInvest 529 College Savings Account that you might not have thought of:
- Hawaii Institute Of Hair Design - Hawaii
- Wood County School Of Practical Nursing – West Virginia
- American Academy Of Dramatic Arts – New York
- Culinary Academy Of Austin – Texas
- Bel-Rea Institute Of Animal Technology - Colorado
If there is a specific school you or your student is interested in and would like to know if a 529 savings plan can be used there, visit http://www.savingforcollege.com/eligible_institutions/.
What if my student only wants to go half-time?
Here are the specifics:
- Less than half-time: savings can be used for all qualified higher education expenses other than room and board.
- Half-time or more: savings can be used for certain room and board expenses and qualified higher education expenses.
What if I really need that money for something other than college?
You can withdraw it, but the earnings portion of the withdrawal is subject to federal income taxes and any applicable state income tax including recapture of prior year's tax deduction, as well as an additional 10 percent federal penalty tax.
OK, OK, I won’t take the money out for something else. How do I make a qualified withdrawal?
- You can withdraw money at any time after your contribution has been processed by CollegeInvest and the money is fully invested.
- Complete a Withdrawal Request Form, you can find these on our website in your plans section, instructing the plan manager to send the money to you, the student or the student's school.
- Retain documentation for your own records showing your withdrawal was used to pay for qualified higher education expenses.
Do I have to pay taxes on withdrawals?
Savings used to pay for qualified higher education expenses are free from federal and Colorado state income tax.8
If you are not a Colorado-resident and/or pay taxes in another state, you should check with that state, or a tax advisor, to determine the applicable state tax treatment.
Can I make a withdrawal from my Upromise account if it is not linked to my CollegeInvest account?
Yes you can. Just submit a withdrawal request form to Upromise Rewards, and they will process your withdrawal and send you a check. Just follow the instructions for Withdrawing Funds from a Upromise Account.
1 Contributions to the Plan(s) are deductible from Colorado State income tax in the tax year of the contribution, up to your Colorado taxable income for that year. Such deductions are subject to recapture in subsequent years in which non-qualified withdrawals are made.
3 Smart Choice College Savings Plans are not insured by CollegeInvest, the State of Colorado, or its agencies. However, these funds are FDIC-insured in accordance with the current FDIC coverage limits.
7 Contributions to the Plan(s) are deductible from Colorado State income tax in the tax year of the contribution, up to your Colorado taxable income for that year. Such deductions are subject to recapture in subsequent years in which non-qualified withdrawals are made.
To learn about CollegeInvest’s 529 program, its objectives, risks, charges, expenses, limitations, restrictions and qualifications regarding the Plans’ benefits and potential tax advantages, please read and consider carefully the Program Disclosure Statements (PDS) available at www.collegeinvest.org before investing. Also, check with your or your beneficiary’s home state to learn if it offers tax or other benefits for investing in its own plan. Administered and issued by CollegeInvest.
Investments are not guaranteed by CollegeInvest, the State of Colorado, its agencies, The Vanguard Group, Inc., Upromise Investments, Inc., Legg Mason Global Asset Allocation, LLC, or FirstBank, and may lose value, including principal amount invested. The guarantee of Stable Value Plus College Savings Plans is the obligation of MetLife and only to the extent of the Funding Agreement. Smart Choice College Savings Plans are not insured by CollegeInvest, the State of Colorado, or its agencies. However, these funds are FDIC-insured in accordance with the current FDIC coverage limits.
CollegeInvest is the issuer of plan securities and is the trustee of the plans in accordance with Colorado law. CollegeInvest also oversees the Managers' activities and provides certain administrative services, such as marketing, audit, and financial statements, in connection with the plans.
Upromise Investments, Inc. serves as Plan Manager for the CollegeInvest Direct Portfolio College Savings Plan and has overall responsibility for the day-to-day operations, including effecting transactions. The Vanguard Group, Inc. also serves as Plan Manager and Investment Manager for the CollegeInvest Direct Portfolio College Savings Plan, and Vanguard Marketing Corporation, an affiliate of The Vanguard Group, Inc., assists CollegeInvest with marketing and distributing the Direct Portfolio Plan. The Direct Portfolio Plan’s portfolios, although they invest in Vanguard mutual funds, are not mutual funds and you could lose money by investing in the plan. Vanguard Marketing Corporation, Distributor and Underwriter.
Legg Mason Global Asset Allocation, LLC, Investment Manager for the CollegeInvest Scholars Choice College Savings Program. Legg Mason Investor Services, LLC is the primary distributor of interest in the Program; together they serve as Manager of the Program.
FirstBank serves as the Plan Manager for the CollegeInvest Smart Choice College Savings Plan and has overall responsibility for the day-to-day operations, including effecting transactions. FirstBank also assists CollegeInvest with marketing and distributing the CollegeInvest Smart Choice College Savings Plan. FirstBank - Member FDIC.
The MetLife Insurance Company serves as the Investment Manager for the CollegeInvest Stable Value Plus College Savings Plan. CollegeInvest has overall responsibility for the day-to-day operations, including effecting transactions.
CollegeInvest and the CollegeInvest logo are registered trademarks of CollegeInvest. CollegeInvest Direct Portfolio College Savings Plan, Scholars Choice, CollegeInvest Smart Choice College Savings Plan, and CollegeInvest Stable Value Plus College Savings Plan are registered service marks of CollegeInvest. Vanguard is a trademark of The Vanguard Group, Inc. Upromise is a registered service mark of Upromise, Inc.