Five basic 529 questions

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At Ascensus, we want everyone to know that saving for college is possible.

Don't get overwhelmed thinking about saving for the full, sticker price of college. Saving for college does not mean saving for all of college. Save what you can, when you can.

As the nation's leading 529 program manager, we are currently helping families save for the futures of four million children. Almost half of their accounts have balances of under $10,000.1 That amount won't pay for all of college, but it may help when the bill arrives.

If you don’t already know all about 529 plans—and many people don't2—here are five basic questions, and the answers, about 529 plans:

  1. What is a 529 plan?

    A 529 is a tax-advantaged savings plan designed specifically to help save for college. There are many 529 plans sponsored by states across the country. While they share most of the same features, each plan is unique and comes with its own benefits.

    529 plans benefit from tax-deferred growth, this means that you don't have to pay any annual taxes on your account earnings. And, if you use the savings for qualified higher education expenses, you don't have to pay any taxes at all on your earnings. Depending on your home state, you may also benefit from a resident state tax deduction or credit for your contributions.


  2. Does my state have a 529 plan?

    Most states do. Some states offer a state tax deduction or credit or other benefits to in-state taxpayers. So, before investing in any 529 plan, we suggest that you look at your home state's options first. We have a great website that helps you find a plan in your state.

  3. How do I invest in a 529 plan and what does it cost?

    If you are comfortable with investing on your own, you can open an account online. Most plans offer investment options that are customized to a future student's age to assist account owners in selecting investments. 529 plans have costs like most investments. The good news is that costs are typically low. They can be charged as a flat annual account fee, a percentage charge based on the amount of money you have in the account, or a combination of both. The costs are taken right out of the 529 plan's assets or your account balance, so you don't need to worry about ever seeing an extra bill. You can find each 529 plan's fees by checking their website. If you need assistance, you might want to find a financial professional and ask them about opening an account in a 529 plan.

  4. Can I save for college a little bit at a time?

    Yes! 42% of contributions made to our accounts are for $100 or less.1 These can be made when you have the extra money, or set up to happen automatically from your bank account or through payroll direct deposit at work3. Every dollar you save now will help you pay for a wide range of qualified expenses such as tuition, fees, books, certain room and board costs, supplies and even some computer expenses.

  5. When is it too late to open an account in a 529 plan?

    Never! On average we see most accounts opened for children age 7, but we also see accounts opened for kids much closer to college age.1 Remember, for every dollar you save today, that is a dollar less that you will potentially have to pay back with interest later.

529 College Savings Day is all about bringing greater awareness to the importance of saving for college and the benefits of using a 529 plan. Raise your own awareness of 529 plans here at

1 Ascensus 529 plan account data, as of 12/31/2021

2 How America Pays for College 2021, Sallie Mae

3A plan of regular investment cannot assure a profit or protect against a loss in a declining market.