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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:

For students attending a Virginia public college/university or community college

Virginia529 pays the in-state tuition and mandatory fees directly to the school after the last add/drop date for the semester. Most schools will typically issue a temporary adjustment for the anticipated payment from Prepaid529. Check the beneficiary’s school account to make sure the temporary adjustment has been made. Ensure any difference in anticipated payment from the Prepaid529 account and actual amount due to the school is paid by the school’s due date. Students attending community college may need to do a financial check-in with the school.

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

One semester of benefits will be moved from the Prepaid529 account to an Invest529 account around mid-July. Funds needed for the spring semester will be moved in mid-November. Account owners should monitor the Invest529 account and request the withdrawal after the funds have been moved to that account. Letters will be sent to account owners in early July with specific information about the eligible payout amount for out-of-state colleges/universities.

For students attending a Virginia private college/university

Payouts for Eligible Educational Institutions not in the Virginia public higher education system 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 the beneficiary’s school account to make sure the temporary adjustment has been made. Account owners should ensure that any difference in anticipated payment from the Prepaid529 account and the actual amount due to the school is paid by the school’s due date.

Using your account for the first time?

Use the Prepaid529 Checklist

Prepaid529 Webinar: Using my Prepaid529 account

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

Topics include:

  • Communications you will receive from Virginia529
  • How to access important information you need in completing the FAFSA
  • Responsibilities and deadlines
  • Where your account can be used and for what expenses
  • Other various topics

View webinar with interactive transcript

Prepaid529 Checklist: Using your account for the first time

  • 1

    Log-in to online account

    Visit the My Profile section and update your personal information. New enhancements have been put into place to help administer online accounts and keep them secure.

  • 2

    Verify all information is current for the Account Owner

    (example: address, phone number, email address, name)

  • 3

    Verify all information is current for the Beneficiary

    (example: address, phone number, email address, name)

  • 4

    Make sure Prepaid529 account is paid in full

  • 5

    Submit Intent to Enroll form

    When logged in, the Intent to Enroll form can be found under “Manage My Accounts,” then “Other Transactions”

    Inaccurate or missing student ID numbers may delay payment. Make sure all information such as student ID number submitted on the Intent to Enroll form is accurate.

Log in to your account Submit Intent to Enroll form

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Prepaid529 Forms & Documents

  • Prepaid529 Benefits Guide

    Instructions on how to use your Prepaid529 benefits.

    Download (PDF)

  • Intent to Enroll

    Notify Virginia529 you are using your Prepaid529 benefits.

    Online

  • Prepaid529 Program Description & Master Agreement

    Prepaid529 Program Description & Master Agreement.

    Download (PDF)

  • Virginia529 Program Materials

    Detailed information regarding the programs Virginia529 offers.

    Download (PDF)

  • Prepaid529 Reasonable Rate of Return

    Prepaid529 reasonable rates of return since inception.

    Download (PDF)

  • Refinance/Downgrade Request

    Change the payment terms on your Prepaid529 account.

    Online

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
    or
  • 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
    or
  • 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.

Risk

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