What is a 529 plan?

529 plans were established to help families save money for post-secondary or higher education that can be used at schools across the country. The name "529" refers to the Internal Revenue Code section that allows the establishment of this type of college saving investment vehicle. With the many attractive features and benefits they offer, 529 plans have become one of the most popular ways to save for college.

What are the benefits of a 529 plan?

  • Tax-deferred investment growth and withdrawals that are free from federal and state taxes when used for qualified higher education expenses*
  • Professional investment management
  • Control over how assets are used
  • Gift- and estate-tax benefits
  • Qualified expenses that include tuition, some fees, books, and certain room and board costs

What impact does a 529 plan have on financial aid?

Participation in a 529 college savings plan does not limit a student's receipt of merit-based financial aid, including academic or athletic scholarships. While a 529 account could potentially impact needs-based financial aid, remember that most needs-based financial aid that is awarded is actually in the form of loans that must be repaid rather than grants. While many parents and grandparents are often concerned about this issue, a 529 plan may help reduce the amount of debt a student has to take on in the form of loans.

A 529 account owned by a parent for a dependent (the student) is reported on FAFSA as a parental asset, which is assessed at a maximum of 5.64 percent. Non-529 student assets (e.g., UGMA/UTMA accounts) are assessed at the higher rate of 20 percent.


*Earnings on nonqualified withdrawals are subject to federal income tax and may be subject to a 10 percent federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent upon meeting other requirements.

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IMPORTANT RISK INFORMATION
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon.

The statements and opinions expressed are subject to change at any time, based on market and other conditions. State Street cannot guarantee the accuracy of completeness of third party statements or data.

Investing involves risk including the risk of loss of principal. Investment returns will vary depending upon the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, you could lose all or a portion of your money by investing in the Plan, depending on market conditions. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.

ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs’ net asset value. Brokerage commissions and ETF expenses will reduce returns.

The SSGA Upromise 529 Plan (the “Plan”) is administered by the Board of Trustees of the College Savings Plans of Nevada (the “Board”). Ascensus Broker Dealer Services, Inc. (ABD) serves as the Program Manager. ABD has overall responsibility for the day-to-day operations, including distribution of the Plan and provision of certain marketing services. State Street Global Advisors (SSGA) serves as Investment Manager for the Plan except for the Savings Portfolio, which is managed by Sallie Mae Bank, and also provides or arranges for certain marketing services for the Plan. The Plan’s Portfolios invest in either (i) Exchange Traded Funds and mutual funds offered or managed by SSGA or its affiliates; or (ii) a Federal Deposit Insurance Corporation (FDIC)- insured omnibus savings account held in trust by the Board at Sallie Mae Bank. Except for the Savings Portfolio, investments in the Plan are not insured by the FDIC. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.

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For more information about the SSGA Upromise 529 Plan (“the Plan”) download the Plan Description and Participation Agreement or request one by calling 1-800-587-7305. Investment objectives, risks, charges, expenses, and other important information are included in the Plan Description; read and consider it carefully before investing. Ascensus Broker Dealer Services, Inc. (“ABD”) is distributor of the Plan.

Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program.

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