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Frequently Asked Questions

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An account holder may change investment portfolio options (Investment Direction or Investment Option Change) twice per calendar year per beneficiary.If there is a change in beneficiary, an investment change can also be made at the same time.

Yes, an account owner may have multiple portfolios for the same beneficiary and each portfolio is a separate account. The account owner may not have two of the same portfolios for the same beneficiary. For instance, an account owner could not have two 2039 portfolios for the same beneficiary but could have a 2039 portfolio and an ESG Core Equity portfolio for that same beneficiary.

The only insured portfolio is the FDIC-Insured Portfolio and this portfolio is insured by the Federal Deposit Insurance Corporation (FDIC) to the fullest extent permitted by law. All other Invest529 portfolios are subject to market risk including loss of principal.

You may choose any of the Invest529 portfolios, but Target Enrollment portfolios are designed for college savers. Since there is a shorter time horizon when the money will be needed for private, public, or religious K-12 schools, you may want to take this into consideration when choosing a portfolio. There are Invest529 portfolios that have conservative and stable investment strategies as well as more aggressive options, but it is ultimately up to you to choose the portfolio that best meets your risk tolerance and time horizon.

You may choose any of the Invest529 portfolios, but Target Enrollment portfolios are designed for college savers. Since there is a shorter time horizon when the money will be needed for private, public, or religious K-12 schools, you may want to take this into consideration when choosing a portfolio. There are Invest529 portfolios that have conservative and stable investment strategies as well as more aggressive options, but it is ultimately up to you to choose the portfolio that best meets your risk tolerance and time horizon.

For more information about Target Date Portfolios, view the blog article: Three Things to Know About: Target Enrollment Portfolios.

First, read about the programs Virginia529 offers, specifically the Program Description for the program(s) in which you are interested. After you have selected a program, select "Open an account" from the top of any page to gather the information you need to get started. After you create an online user profile, you can complete the application for Invest529. To open a CollegeAmerica account, contact your financial advisor or visit americanfunds.com.

Any non-retirement investment or savings account may affect eligibility. For accounts owned by parents and dependent students, the Free Application for Federal Student Aid (FAFSA) assesses 529 assets at a maximum of 5.64 percent of the value when calculating the Expected Family Contribution (EFC) for financial aid eligibility. Accounts owned by other parties will impact eligibility differently. For more information, consult fafsa.ed.gov or an educational financial aid adviser.

Yes. Accounts can be cancelled at any time. Keep in mind that earnings that are not used for qualified higher education expenses are subject to a 10 percent federal tax penalty (with certain exceptions for death, disability and scholarships), plus federal and state income taxes on the earnings reportable on the taxpayer’s return, and the recapture of any Virginia tax deduction previously taken on the amount of the cancellation or refund.

You have thirty years after the beneficiary’s projected high school graduation date, or thirty years from when the account was opened (if opened after the beneficiary’s high school graduation) for Invest529 and CollegeAmerica accounts. You have ten years after the beneficiary’s projected high school graduation date to use a Prepaid529 account. Virginia529, in its sole discretion, may grant extensions of time in which to use a Virginia529 account.

Account owners must be 18 years of age or older and a U.S. citizen or legal U.S. resident to open an account, while the beneficiary must be a U.S. citizen or legal U.S. resident to be named to an account. The account owner may also be a U.S. trust, corporation, partnership, nonprofit organization, custodian, guardian or other entity. Only Prepaid529 requires the owner or the beneficiary to be a Virginia resident at the time the account is opened.

Prepaid

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.

Gifting

The Gift ID is anonymous and is safe to be shared any way you want – in person, over the phone, through social media, etc.

Your personal Gift ID can be retrieved from the secure Virginia529 online account portal. Once logged in, select the Gift Center link in the main navigation. On the Gift Center home page, scroll down “Gift ID Information” and select the appropriate account (if more than one) and copy your Gift ID.

Virginia529 doesn’t charge fees to the giver or the account owner for making contributions through the online Virginia529 Gift Center. However, Virginia529 and/or your financial institution may assess fees for rejected transactions or insufficient funds. Gift cards purchased at Target and H-E-B retail locations, and online at Walmart.com include a convenience fee to cover distribution and processing. The gift card fee is paid by the gift card purchaser and the gift recipient receives the gift card amount.

Gifts of up to $15,000 per year, or up to $30,000 if married, to any one person are gift tax free.

You should consult a professional concerning any financial, tax or legal implications related to making a gift contribution to a Virginia529 account. Virginia529 does not provide legal, financial or tax advice to any person making a gift.

Invest529

First, read about the programs Virginia529 offers, specifically the Program Description for the program(s) in which you are interested. After you have selected a program, select "Open an account" from the top of any page to gather the information you need to get started. After you create an online user profile, you can complete the application for Invest529. To open a CollegeAmerica account, contact your financial advisor or visit americanfunds.com.

Any non-retirement investment or savings account may affect eligibility. For accounts owned by parents and dependent students, the Free Application for Federal Student Aid (FAFSA) assesses 529 assets at a maximum of 5.64 percent of the value when calculating the Expected Family Contribution (EFC) for financial aid eligibility. Accounts owned by other parties will impact eligibility differently. For more information, consult fafsa.ed.gov or an educational financial aid adviser.

You have thirty years after the beneficiary’s projected high school graduation date, or thirty years from when the account was opened (if opened after the beneficiary’s high school graduation) for Invest529 and CollegeAmerica accounts. You have ten years after the beneficiary’s projected high school graduation date to use a Prepaid529 account. Virginia529, in its sole discretion, may grant extensions of time in which to use a Virginia529 account.

Invest529 Investment Options

An account holder may change investment portfolio options (Investment Direction or Investment Option Change) twice per calendar year per beneficiary.If there is a change in beneficiary, an investment change can also be made at the same time.

Yes, an account owner may have multiple portfolios for the same beneficiary and each portfolio is a separate account. The account owner may not have two of the same portfolios for the same beneficiary. For instance, an account owner could not have two 2039 portfolios for the same beneficiary but could have a 2039 portfolio and an ESG Core Equity portfolio for that same beneficiary.

The only insured portfolio is the FDIC-Insured Portfolio and this portfolio is insured by the Federal Deposit Insurance Corporation (FDIC) to the fullest extent permitted by law. All other Invest529 portfolios are subject to market risk including loss of principal.

You may choose any of the Invest529 portfolios, but Target Enrollment portfolios are designed for college savers. Since there is a shorter time horizon when the money will be needed for private, public, or religious K-12 schools, you may want to take this into consideration when choosing a portfolio. There are Invest529 portfolios that have conservative and stable investment strategies as well as more aggressive options, but it is ultimately up to you to choose the portfolio that best meets your risk tolerance and time horizon.

You may choose any of the Invest529 portfolios, but Target Enrollment portfolios are designed for college savers. Since there is a shorter time horizon when the money will be needed for private, public, or religious K-12 schools, you may want to take this into consideration when choosing a portfolio. There are Invest529 portfolios that have conservative and stable investment strategies as well as more aggressive options, but it is ultimately up to you to choose the portfolio that best meets your risk tolerance and time horizon.

For more information about Target Date Portfolios, view the blog article: Three Things to Know About: Target Enrollment Portfolios.