What is a 529 college savings plan?

A CollegeInvest 529 Savings Plan is an educational savings account where your money grows federal and state tax-free as long as it’s used for specific expenses, including tuition and room and board. Use your savings anywhere in the country at eligible colleges or trade schools and even for apprenticeships.

529’s were created to encourage Parents to start saving early while their students were young, allowing the savings to increase as they grow. The affordability, flexibility and unique savings plans of 529s make them one of the best and easiest ways to save for a postsecondary education.

529 Savings Plan

Why CollegeInvest

CollegeInvest is Colorado’s 529 Savings Program, the only 529 plan to offer a state income tax deduction for Colorado taxpayers who make contributions to any of our plans.

With more than $12 billion in assets under management, we are proud to offer families one of the broadest choices of savings plans in the country. We have built a strong reputation of growth and confidence with strong investment managers and partners including Ascensus College Savings, FirstBank, Nationwide Insurance, Nuveen, TIAA Financial Services, and The Vanguard Group.

Scroll to explore 529 College Savings, or use the links below to jump to a section you’re looking for.


Why a 529 Savings Plan?

Time is on your side

It’s no surprise that college is expensive, with costs currently increasing 3-4% a year and sometimes even higher. 529s were created to give Parents incentives to start saving when their children are younger, so earnings or interest can grow with them. Possibly ahead of them.

Let’s say you have a newborn and you start saving $100 a month for 18 years in a simple savings account earning 1% annually in interest. In that time, you will have saved a total of $27,070 available to pay for their college expenses, as illustrated in the graphic below.

Or, you could invest the same $100/month in a CollegeInvest 529 savings plan, earning 6% a year (on average) during those 18 years. Your investment could have grown to $38,381 in total.

That’s a difference of $11,311, allowing you to cover more of your student’s expenses.

With a 529 savings plan, you also have the flexibility to change your plan twice in a calendar year. There are no limits on how many accounts you open or the number of Beneficiaries you want to save for. These benefits separate 529s from other college savings options.

Waiting costs you more

Starting as early as possible gives you a big advantage. Investing as little as $25 a month for 18 years can add up to nearly $9,600 (6% average annual return).

In the example above, investing $100 a month regularly for 18 years grew to $38,381.

If you hesitate to save until your student is 8 years old, the same $100 a month for 10 years (6% annually) would add up to $16,426. That’s a lost opportunity of $21,955, and you’re now likely tapping into other important income resources to make that up.

You would have to save $234 a month within those 10 years to catch up, more than double the $100/month investment.

Saving for college is a challenge to every Parent, and most families have more than one child in the home. Start early. Increase your contributions when you have the chance. Ask family and friends to contribute on special holidays.

Saving versus Borrowing

The Federal Reserve reported that of the 54% of college attendees who borrowed to pay for higher education expenses in 2020 borrowed more than $37,500 on average. The earlier you can start, the less you may need to borrow. Fact is, borrowing can cost you nearly twice as much as investing with a CollegeInvest 529.

In the example to the right, saving $100 a month for 18 years in a CollegeInvest savings plan could grow to $38,381 at 6% annual return.

To borrow that same amount, you would need to pay $385 a month for 10 years at the current federal student loan rate of 3.73%. That’s a total of $46,042 out of pocket, more than DOUBLE your contributions to the 529 savings plan.

 Legislative Update

How much should I save?

It’s estimated the average cost of a public four year college (in-state) in 2020 was about $114,000 (4 years). A public two year community college was about $54,300. If your child is currently one year old and would likely go on to school at age 18, either choice is likely to cost 2.5 times the 2020 average. These are daunting numbers for the average family.

A generally recommended savings goal for families is to target 30-40% of the anticipated costs. You should consider other sources to cover the remaining costs, including things like scholarships and grants, retirement or other investment savings, contributions from grandparents and other relatives, or even the student’s own savings or work income.

How Can I Use My 529?

the qualified expenses of a 529

  • Tuition, including the cost of apprenticeships
  • Required fees, books, and supplies
  • Certain room/board/meal plan expenses and on-/off-campus housing
  • Desktops, laptops, or tablets and computer equipment (printers, scanners, monitors, keyboards) used solely by the student
  • Education-based software (used solely by the student)
  • Internet access (primary use by the student, excluding the bundled costs of phone, cable, and/or pay TV services)
  • Special needs equipment

Non-Qualified Expenses

Any expense that is not considered a qualified education expense.
These are some of the most asked-about expenses that are NOT eligible:

  • Application and testing fees
  • Transportation costs
  • Health insurance
  • Extracurricular activities
  • Expenses to create federal education tax credits (AOTC, LLTC, etc.)

Where Can I Use My Savings?

Students can go anywhere in the country, not just Colorado or their home state. Post-secondary schools or programs participating in a student aid program administered by the U.S. Department of Education include:

  • Community colleges
  • Public and private four-year colleges and universities
  • Graduate and post-graduate programs
  • Vocational and trade schools

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

The Benefits of saving with CollegeInvest


When we talk with Parents and grandparents about saving for college, flexibility is at the top of their concerns. It’s also the most inherent benefit of 529 savings plans.

Tax Benefits

For Colorado taxpayers, contributions to any CollegeInvest 529 account can be deducted from your Colorado state income tax return. Your earnings grow free of federal and state taxes.


As the Account Owner, you control the number of accounts, the Beneficiaries, how much to save, what you pay for and when, and more, with the flexibility to change any of these when YOU want to.


No, you don’t have to be a millionaire (or related to one) to have a CollegeInvest account. We want accessibility for all Parents and grandparents to save for their education goals.

No Age, Income Requirements

Unlike many other savings options, there are no age or income restrictions to open or manage a CollegeInvest 529 plan, contribute to your account, or spend your savings if the child reaches a certain age.

Estate Planning

Contributions to your 529 account are considered a completed gift to the Beneficiary for federal gift and estate tax purposes and therefore are removed from your estate.

How to get started

Getting started is easy. Follow the simple steps below to enroll and get your account set up today.

Select a plan

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


We’ll walk you through the information you’ll need, like Social Security numbers and your initial contribution amount and deposit method.


It takes just 10 minutes to enroll in the plan of your choosing.

Start Saving

There’s no better time to start saving than today. CollegeInvest is here to help you achieve your goals and save on taxes.

Compare our 529 Savings Plans

With four different 529 savings plans to choose from, CollegeInvest offers Account Owners considerable benefits over other college savings options.

Compare Our 529 Savings Plans

Frequently asked questions about CollegeInvest 529 savings plans

How can I use my 529?

Savings can be used for a variety of eligible college-related expenses, including:

  • 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
  • Education-based software
  • Internet access for primary use by the student (excluding the bundled costs of phone, cable, and/or pay TV services)

Where can I use my savings (what schools are eligible)?

Students can go anywhere in the country, not just Colorado or their home state, where there are postsecondary schools or programs 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 postgraduate programs
  • Vocational and trade schools

For the most recent list of eligible schools, CLICK HERE.

Who can participate?

Parents, grandparents, other relatives, even friends! There are no age or income restrictions to owning a CollegeInvest account. Nor do you have to be a Colorado resident or taxpayer.

In fact, you could open an account for yourself. 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.

You can open as many accounts as you want. YOU control who receives the funds, when they’re withdrawn, and for what expenses. You can change the Beneficiary at any time.

Nor are there any restrictions on the number of accounts per Beneficiary.

And anyone can contribute to your account. Learn more about Friends and Family Gifting.

Are there minimum contribution requirements?


$25 to open an account and for subsequent contributions

$15 with a payroll direct deposit plan. Check with your Plan Manager.


No minimum to open or contribute to an account

Can Parents and grandparents open separate accounts for the same student?

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

How do I choose the right plan?

There are many questions to consider when choosing your CollegeInvest 529 account, like how many children will you be saving for? How much time do you have? What kind of saver you are, and what risk tolerance you’re looking for? We can help you walk through these questions and considerations here.

Can anyone else contribute to my account?

Absolutely. Anyone can contribute to your account directly with the right information. Check with your Plan’s Disclosure Statement for the specifics, but it’s very easy to do. Birthdays, the holidays, and graduations are perfect opportunities to substitute a contribution for another toy or clothing. If they are a Colorado taxpayer, they also benefit from the Colorado income tax deduction on all direct contributions to a CollegeInvest account.* Learn more about Friends and Family Gifting.

Did you know you can make a gift to anyone else’s CollegeInvest account and receive a Colorado tax deduction for yourself? If you do make a contribution and planning to claim the deduction on your Colorado income tax form, use our secure form to let us know. If you have any questions, please email us at general@collegeinvest.org.

* Contributions are deductible from Colorado income tax for Colorado taxpayers in the calendar year of the contribution up to your Colorado taxable income that year, and subject to recapture in subsequent years in which nonqualified withdrawals are made.

What if my student doesn’t go to college?

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, a 10% penalty, and the possible recapture of any state income tax deductions.

What if my student gets a scholarship?

You have four options:

You can use your funds to cover other eligible expenses, like room and board, books, supplies, computer/computer equipment, software, or internet access that some scholarships don’t cover.

You can change the Beneficiary to another family member, or even yourself.

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 of your withdrawals may still be subject to state and federal income taxes. (You should carefully read the Plan’s Plan Disclosure Statement, or consult a tax advisor for your specific situation.)

What if I really need that money for something else?

Nonqualified withdrawals are subject to federal and state income tax on the earnings portion, and a 10% penalty on the earnings portion. State tax deductions may also be subject to recapture in subsequent years.

Can I change my investment options?

You can change the investment option for all or a portion of your assets for any reason, no more than two times 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, possibly because the stock market may be stronger at the time. You are allowed to change your investment option (called a reallocation) twice per calendar year.

This limitation applies on an aggregate basis to all accounts having the same Account Owner and the same Beneficiary.

Regarding Account Transfers: You can transfer assets from one 529 plan to another (thereby changing investment options) for the same Beneficiary once per 12 month period. (Check with your plan for any restrictions on moving accounts within a plan.)

Regarding a Change in Beneficiary: You may also make a reallocation anytime you change Beneficiaries, subject to limitations regarding changing a Beneficiary. (Carefully review your Plan Disclosure Statement.)

Please note, each situation is unique, and you should carefully review the Plan Disclosure Statement to understand the Plan’s limitations and the potential tax consequences. Or consult with your tax advisor for your specific situation.

Do I have to pay taxes on withdrawals?

Savings used to pay for qualified higher education expenses (within the same calendar year) are free from federal and Colorado state income tax. 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.

Nonqualified withdrawals are subject to federal and state income tax on the earnings portion and a 10% penalty on the earnings portion. State tax deductions may also be subject to recapture in subsequent years.

What is the Colorado state tax deduction?

Colorado taxpayers who contribute to ANY CollegeInvest savings account are eligible for a deduction from their Colorado state income tax return:

For calendar year 2021, contributions may be eligible for a dollar-for-dollar deduction up to your 2021 Colorado taxable income.

Beginning January 1, 2022, the deductions will be limited to $20,000 per taxpayer, per Beneficiary for single filers, or $30,000 per tax filing, per Beneficiary for joint tax return filers.