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Virginia529’s original qualified tuition program

Prepaid529 is PERMANENTLY closed for new enrollment.

This page is for current contract holders and includes resources, details and instructions on managing and using your account. For information on the new Invest529 Tuition Track Portfolio, click here.

How to use your Prepaid529 account

Here’s some helpful information to guide you when you’re ready to access your benefits.

Use the checklist to make sure your information is correct, check the overview of what expenses are covered and watch a webinar or tutorial anytime to learn about the process.

See what's covered Watch the webinar View the checklist Prepaid529 forms & documents Prepaid529 FAQs Additional information

Prepaid529 Benefits: Understanding your payout options

Payout will be based on the type of institution the student will attend, but will fall into one of three categories:

Virginia public college or university

Tuition and mandatory fees for normal full-time course load in a general course of study. Additional charges for specific majors, classes or programs are not covered.

Virginia private college or university

The lesser of 1.) Contract payments made plus the actual rate of return or 2.) The highest in-state undergraduate tuition and mandatory fees at Virginia public institutions in the semester in which benefits are used.

Out-of-state college or university

The lesser of 1) Contract payments made plus a reasonable rate of return or 2) The average in-state undergraduate tuition and mandatory fees at Virginia public institutions in the semester in which benefits are used.

How the payout works:

After submission and acceptance of the withdrawal request, Virginia529 will make payments on a semester-by semester basis, but the method will vary depending on if the school is located in Virginia or another state.

For students attending a Virginia college or university

Virginia529 will pay funds directly to Virginia public or private schools each semester after the school’s add-drop period and upon receipt of an invoice from the school. Do not pay the Virginia public college or university for tuition and mandatory fees covered by your Prepaid529 account – the school will invoice Virginia529.

Payouts to private colleges and universities may not cover the full cost of tuition and mandatory fees. Most schools will typically issue a temporary adjustment for the anticipated payment from Prepaid529. Check with the school to make sure the temporary adjustment has been made and that any difference in anticipated payment and the actual amount due to the school is paid by the school’s due date.

For students attending an out-of-state college or university

The account owner is responsible for submitting a new withdrawal request each semester. Funds can be sent to an institution, the beneficiary, or to reimburse yourself for other qualified higher education expenses. Virginia529 will not directly communicate with an out-of-state school to arrange payment.

Prepaid529 Webinar: Using my Prepaid529 account

This session will walk you through the steps of using your Prepaid529 account.

Topics include:

  • How/when Virginia529 will communicate with customers
  • Helpful documents
  • FAFSA reporting requirements for 529 savings
  • What schools are eligible and what expenses are covered
  • How to withdraw funds
  • Tax reporting
  • Q&A

Prepaid529 Checklist: Using your account for the first time

  • 1

    Review the Prepaid529 Benefits Guide

    Includes detailed information on accessing account benefits, how benefits are calculated, the payment of funds to institutions and more.

  • 2

    Log in to your online account

    Select “My Profile” to access your account information and make any necessary updates.

  • 3

    Verify that your account is paid in full

    The account status in located in the Account Overview section of the Account Summary page.

  • 4

    Submit a withdrawal request

    Select “Manage My Accounts”, then “Withdraw Funds”.

    If the beneficiary is attending an institution in Virginia, the withdrawal request only needs to be submitted once. Virginia529 will pay the institution each Spring and Fall semester until benefits are exhausted or otherwise requested. A new withdrawal request should be submitted each semester if the beneficiary attends an institution outside of Virginia.

View the Benefits Guide Log in to your account

Recent Smart Savers blog articles

Prepaid529 Forms & Documents

  • Prepaid529 Benefits Guide

    Instructions on how to use your Prepaid529 benefits.

  • Prepaid529 Opt Out Request

    Use this form to notify Virginia529 that you would like to opt out of using Prepaid529 benefits at this time.

  • Prepaid529 Program Description & Master Agreement

    Prepaid529 Program Description & Master Agreement.

  • Prepaid529 Reasonable Rate of Return

    Prepaid529 reasonable rates of return since inception.

  • Refinance/Downgrade Request

    Change the payment terms on your Prepaid529 account.

Prepaid529 FAQs

Prepaid529 permanently closed for new enrollment as of May 1, 2019. Virginia529 is changing the program’s benefit structure and is in the process of creating a new similar program. Details for the new program are still being finalized. There will be no changes to existing Prepaid529 contracts, and current contracts will retain the Prepaid529 benefit structure in effect at the time of purchase.

Earnings grow free from state and federal taxes when used for qualified expenses. Taxpayers may deduct from individual Virginia taxable income contributions of up to $4,000 per account per year made to a Virginia529 account. If you contribute more than $4,000 to an account in one year, you may deduct up to $4,000 per year until you have claimed all of your contributions.

Prepaid529 funds undergraduate in-state tuition and mandatory fees assessed to all students at Virginia public two- and four-year institutions. It does not cover room and board, books, supplies and other qualified higher education expenses. Prepaid529 also does not cover any additional charges of any type for specific courses of study, such as nursing or engineering, that an institution may require or for more than a normal full-time course load. Some families choose to save for these other costs with a Virginia529 savings account, such as Invest529 or CollegeAmerica, as a child may be the beneficiary of more than one Virginia529 account.

Virginia public institutions of higher education include a number of options, giving you a great deal of choice for using your Prepaid529 account. Find a list on the website of the State Council of Higher Education for Virginia (SCHEV) under “Virginia Public Colleges and Universities.” Note: you may use your Prepaid529 account toward tuition at schools listed under “Private & Out-of-State Institutions” on this page, however your benefit will be different and may not cover the full cost of tuition and mandatory fees.

No. Students can use Prepaid529 accounts at private Virginia colleges and universities and schools outside of Virginia, but the benefits differ.

At private colleges and universities in Virginia, Prepaid529 pays the lesser of the following:

  • Payments + actual rate of return on payments
  • The highest Virginia public institution tuition and mandatory fees

At public or private colleges and universities outside Virginia, Prepaid529 pays the lesser of the following:

  • Payments + reasonable rate of return* on payments
  • The average Virginia public institution tuition and mandatory fees

* This is determined by the Virginia529 Board and currently follows the quarterly performance of the Institutional Money Funds Index as reported in the Money Fund MonitorTM by iMoneyNet.

Prepaid529 should not affect a student’s eligibility for merit–based scholarships. If your child receives a scholarship, you have several options including:

  • Keeping the account to apply to future educational needs, such as graduate school
  • Rolling over a portion of the contract to an Invest529 account to be used for qualified expenses not covered by the scholarship
  • Transferring the account to a younger member of the family
  • Requesting a refund of an amount up to the value of the scholarship without penalty, although payment of taxes on the earnings may be required

529 accounts, including Prepaid529, may have an impact on financial aid offers from colleges and universities. In the calculation of a student’s Expected Family Contribution (EFC) for financial aid, 529 accounts with a parent or a dependent student listed as the account owner are assessed at a maximum of 5.65 percent of the account’s value, depending on other reportable household assets. 529 accounts owned by an independent student, a non–custodial parent or a third party (for instance a grandparent) are assessed at higher rates.

You can elect to continue to own and make payments to your Prepaid529 account. Your child may use his or her paid-in-full account at any eligible institution to which he or she applies and is accepted. However, if your child chooses to attend a Virginia public college or university and is no longer eligible for in-state tuition, Virginia529 will not pay the difference between the in-state and out-of-state resident rates.

Additional Information

Tax benefits of Prepaid529

Prepaid529 contract owners enjoy the same tax advantages as with other Virginia529 programs:

  • Deductions for annual contributions, up to $4,000 per account, from Virginia taxable income for the account owner
  • Tax-free earnings
  • Tax-free withdrawal for qualified higher education expenses
  • Favorable federal gift and estate tax treatment

State obligation

To cover Prepaid529’s contractual obligations in the event of a Virginia529 funding shortfall, Virginia law provides that a sum sufficient appropriation must be included by the Governor in his annual proposed state budget bill. This provision can only be changed through the annual appropriations process, which would require action by the Virginia General Assembly.

Mandatory fees

Mandatory fees do not include laboratory fees, course-specific or optional fees, room and board, transportation, computers or textbooks. Additional charges for a specific course of study, such as nursing or engineering, or for a course load above normal full-time are not covered by Prepaid529.

Maximum balance

Virginia529 limits an individual beneficiary’s cumulative account balance for all Virginia529 accounts (regardless of program) to $500,000.

College admissions

Ownership of a Prepaid529 contract has no bearing on the admissions process at Virginia colleges or those elsewhere. A student must apply to and be accepted by the school he or she wishes to attend.


Please refer to the Prepaid529 Program Description for a discussion of risk factors associated with Prepaid529.