Virginia 529 Plans

Virginia offers three 529 college savings plans, one direct plan called Virginia Education Savings Trust (VEST), an advisor-sold plan called CollegeAmerica, and a pre-paid tuition plan called Virginia Prepaid Education Program (VPEP).

Virginia Education Savings Trust (VEST)

VEST is a traditional 529 plan that allows you to invest money today and reap tax benefits when you withdraw it to pay for qualified education expenses.

Type:  Direct – this 529 plan can be purchased directly through the state.

Fund Family:  Various

Minimums:  To get started you can deposit $25, and failure to contribute at least $250 within the first 12 months may result in termination of the account.

Maximum Contributions:  Currently, you can contribute up to $250,000 to your Virginia 529 plan.  Of course, your total amount in the plan can be higher as your investments group.  529 plans typically increase the contribution limit over time, so you may be able to contribute more.

Tax Benefits:  Good news for Virginia residents – by investing in your state’s 529 plan, you can deduct up to $2,000 from your adjusted gross income.  (Cap does not apply to account owners 70 and above.)  You also get the same benefit for federal income taxes.  Out-of-state participants still get the federal tax benefits.

Residency:  VEST is open to all United States residents, not just those in Virginia.

You can learn more about this Virginia 529 plan at the official website http://www.virginia529.com/SavOptVESTOverview.asp.

CollegeAmerica

CollegeAmerica is a traditional 529 plan that allows you to invest money today and reap tax benefits when you withdraw it to pay for qualified education expenses.

Type:  Advisor.  Please contact a financial advisor in your state for assistance.

Fund Family:  American Funds

Minimums:  To get started you can deposit $25 ($1,000 for the Cash Management Trust of America).  Minimum subsequent contributions are $50 and $25 with payroll deduction.

Maximum Contributions:  Currently, you can contribute up to $250,000 to your Virginia 529 plan.  Of course, your total amount in the plan can be higher as your investments group.  529 plans typically increase the contribution limit over time, so you may be able to contribute more.

Tax Benefits:  Good news for Virginia residents – by investing in your state’s 529 plan, you can deduct up to $2,000 from your adjusted gross income.  (Cap does not apply to account owners 70 and above.)  You also get the same benefit for federal income taxes.  Out-of-state participants still get the federal tax benefits.

Residency: CollegeAmerica is open to all United States residents, not just those in Virginia.

You can learn more about this Virginia 529 plan at the official website http://www.americanfunds.com/college/college-america/index.htm?r=l.

Virginia Prepaid Education Program (VPEP)

Virginia also offers a pre-paid tuition plan that lets you lock in today's rates for college.   It can be used at any qualified institution of higher education, public or private, anywhere in the country, and some schools around the world.  However, private and out-of-state college expenses will be prorated and may not be fully covered.

For more information about VPEP, visit the official website http://www.virginia529.com/SavOptVPEPOverview.asp.