529 Plans for Grandparents


Help your grandchildren build a bright future with a 529 College Savings Plan.

As a grandparent you’re always there for your grandchildren. Don’t let college be an exception. There’s no better way to invest in your grandchild’s higher education goals than by opening a CollegeInvest 529 Savings Account or contributing to their existing 529 Savings Account.

Saving for your grandchild’s college education

A 529 Savings Plan is a tax-advantaged investment account specifically designed to save for future education expenses. Savings can be used at eligible colleges, trade schools and even apprenticeships nationwide. They can cover expenses like tuition, room and board, laptops and more.

529 tax benefits for grandparents

Contributions to a 529 Savings Plan grow federal and state tax-free as long as the funds are used for specific expenses. Plus, for Colorado taxpayers, contributions to any CollegeInvest savings account are eligible for a deduction from your Colorado state income tax return1. As a 529 Account Owner, you’ll have control over the account, including how the funds are invested and when they are used, and you’ll even have the option to change the Beneficiary at any time.

Opening your grandchild’s 529 plan

Setting up a 529 Savings Account for your grandchild is a straightforward process. Here’s how to get started:

Select a plan

CollegeInvest has one of the broadest choices of savings plans in the country. Choose from our four plans.


It takes just 10 minutes to enroll in the plan of your choosing. We’ll provide you with a list of information you’ll need to complete the process.

Make contributions

Begin making contributions to the account regularly. Remember, even small contributions can add up over time.

Share the gift

Ugift® makes it easy for family and friends to contribute to your grandchild’s 529 fund. Plus, contributions may be deductible for Colorado taxpayers2.

Giving the gift of college savings

As a grandparent, investing in your grandchild’s future through a 529 Savings Plan is one of the most meaningful gifts you can give. It not only provides financial support for their education but also demonstrates an ongoing commitment to their success. If your grandchild already has a CollegeInvest 529 Savings Account, you can still make contributions through Ugift®!

Frequently asked questions about 529 contributions for grandparents

How do I open a College Savings account for my grandchild?

Grandparents can open a CollegeInvest 529 Savings Account in their own name, naming the grandchild as the beneficiary.

Can parents or grandparents open separate college savings accounts for the same child?

Yes! In fact, this is quite common. There are no restrictions on the number of accounts for a specific Beneficiary.

Can I change my Beneficiary?

A Beneficiary is the person of your choosing who is entitled (by the Account Owner) to the benefits of the savings. You can change your Beneficiary at any time. Just log in to your account and complete the required form or contact your Plan Manager directly.

Can I transfer my child’s 529 Savings Account to a grandchild?

It is possible to transfer a child’s 529 Savings Account to a grandchild under certain circumstances. Generally, the account owner, who is often the parent, has the authority to change the beneficiary of the 529 Savings Account to another eligible family member, including a grandchild. However, it’s essential to review the specific rules and procedures outlined by the 529 Savings Account provider to ensure a smooth transfer process. Additionally, tax implications and potential penalties may apply, so it’s advisable to consult with a financial advisor or tax professional before initiating any transfers.

Can grandparents apply for the First Step program?

No, currently only a parent or legal guardian can apply for the program. Also, future contributions must come from the parent or legal guardian to qualify for the incentive match. For more information about the First Step program, click here.

What are the eligible expenses covered by a 529 Savings Plan?

  • Tuition
  • Required fees, books, and supplies
  • Certain room and board expenses, or off-campus rentals
  • Computers (desktops, laptops, or tablets) and peripheral equipment (such as mice, keyboards, printers, scanners, and monitors) used solely by the student
  • Software (educational based)
  • Internet access for primary use by the student (excluding the bundled costs of phone, cable, and/or pay TV services)
  • Apprenticeships

What schools are eligible for savings plans?

You may use your funds at postsecondary educational institutions, across the country or even internationally, as long as they participate in a student aid program administered by the U.S. Department of Education, including:

For the most recent list of eligible schools, click here.

What happens if my grandchild doesn’t go to college, or withdraws?

You have three options:

You can simply leave the funds in the account should he/she decide to go back to learning. You can change the Beneficiary to another family member, or even yourself.

Or, you can withdraw the funds, subject to the tax consequences for nonqualified withdrawals. Generally, the earnings are subject to federal and state income taxes and a 10% penalty, and the possible recapture of any state income tax deductions.

How can grandparents contribute to their grandchild’s 529 Savings Account?

Grandparents can make contributions to an existing 529 Savings Account. Ugift® makes it easy for grandparents to contribute online or by mail. Learn about gifting here.

Alternatively, you can open your own 529 Savings Account for your grandchild.

How much can grandparents contribute to a 529 College Savings Plan?

Grandparents can contribute up to the annual gift tax exclusion amount without incurring gift tax consequences, which is $18,000 per year per beneficiary as of 2024. Additionally, they can make a lump sum contribution of up to five times the annual exclusion amount ($90,000) per beneficiary in a single year without triggering gift tax, provided they don’t make any additional gifts to the same beneficiary over the next five years.

Can grandparents deduct 529 Contributions?

For Colorado taxpayers, contributions to ANY CollegeInvest savings account are eligible for a deduction from your Colorado state income tax return1. This is a great way for grandparents and other family members to invest in their loved ones’ higher education goals, while also receiving Colorado tax deductions.

Do I need to report my gift contribution to my grandchild's 529 Savings Account?

If you’re planning to claim the deduction on your Colorado income tax return, it’s important to report your gift or donation to your grandchild’s 529 account. CollegeInvest provides a secure form for self-reporting contributions, which is crucial for accurate tax reporting. By submitting this form, you ensure compliance with tax regulations for 529 plans, and reduce the chances of receiving inquiries from the Colorado Department of Revenue.

Contact Us

We’re here to support you on your journey to investing in your grandchild’s future through a 529 CollegeInvest Savings Plan. Whether you have questions about account setup, gifting options, or maximizing tax benefits, our knowledgeable team at CollegeInvest is ready to assist you every step of the way.

Call us today at 800.448.2424

Investment returns are not guaranteed, and you could lose money, including principal.