An idea to prepay college tuition. A vision to reward and encourage saving. A plan to make higher education affordable. Since 1996, Virginia529 College Savings Plan (Virginia529) has been helping people prepare for the future. At the start of its third decade, Virginia’s 529 is the nation’s largest, entrusted with 21 percent ($57 billion) of total 529 savings.
In celebration of its 20th anniversary and first program, the agency is giving away a Virginia529 prePAID contract covering four years of tuition at a Virginia public university. It also is sharing Saving Success Stories, videos and testimonials from families and individuals who have benefited from Virginia529 programs.
The agency’s own success story began with legislation by the Virginia General Assembly in 1994 establishing the Virginia Higher Education Tuition Trust Fund as an independent agency of the Commonwealth of Virginia.
Two years later, the agency that would become Virginia529 launched the Virginia Prepaid Education Program (now known as Virginia529 prePAID), selling 16,000 contracts for future college tuition in the first enrollment period. In the same year, Congress passed legislation creating Section 529 of the Internal Revenue Code, which gave the industry its name and allowed earnings in 529 accounts to grow without being subject to tax.
Over the next 15 years, Virginia529 added three savings programs to complement the prePAID program, providing families with more choice and flexibility in managing the rising cost of higher education:
- Virginia529 inVEST (originally Virginia Education Savings Trust) offers investment portfolios that can be used to save for all qualified higher education expenses, including housing, meals and textbooks (1999);
- CollegeAmerica, a partnership with the American Funds, one of the largest mutual fund companies in the country, allows families to work with a financial advisor to develop an investment strategy for higher education planning (2002); and
- CollegeWealth, which introduced FDIC-insured bank savings accounts to the 529 program line-up through partnerships with Union Bank & Trust (2007) and BB&T (2009).
To further expand its mission to make college more affordable and accessible, in 2010 Virginia529 established SOAR Virginia, a scholarship program offered in partnership with college access providers. The program prepares low- and moderate-income high school students across the Commonwealth for future success with a combination of individual advising, encouragement and up to $2,000 in a Virginia529 inVEST scholarship account.
State and federal legislation through the years increased the appeal of saving for higher education in a 529 account, from Congress in 2001 making qualified distributions tax free to Virginia’s annual state income tax contribution deduction of up to $4,000 per Virginia529 account. Most recently, in January 2015 Congress expanded qualified higher education expenses to include computers and related equipment.
Mary G. Morris has been Virginia529’s CEO since 2007, but her involvement with the agency extends to its earliest days. Morris, as a Senior Assistant Attorney General, was part of the team who developed and launched the first program.
“In 1994, everything Virginia529 is now was just a great idea waiting to take off,” noted Morris. “It has been a great honor to be a part of Virginia529’s success and to serve the millions of people across the country saving to achieve their higher education dreams.”
Learn how you can dream, save and achieve your higher education goals at Virginia529.com/20years.