Prepaid529 pays undergraduate in-state tuition and mandatory fees assessed to all students at Virginia public two- and four-year schools. It does not cover room and board, books, supplies and other qualified higher education expenses. Also, Prepaid529 does not cover any additional charges of any type for specific courses of study, such as nursing or engineering, that a school may require 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, because a child may be the beneficiary of more than one Virginia529 account. Please see the applicable Program Description for more information.
If the student stops attending school, immediately submit a Stop Benefits request. Stopping your Prepaid529 benefits is a convenient online process.
Follow the steps below to submit a request.
- Select View My Accounts, then Withdrawal History.
- In the Enrollment section, locate the appropriate student and school
- Click the Stop Benefits button.
Virginia529 will no longer make payments to the school once the request has been submitted and accepted. To begin using benefits again, the account owner should submit a new withdrawal request.
Prepaid529 permanently closed for new enrollment as of May 1, 2019. 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.
Virginia public colleges and universities include a number of options, giving you a great deal of choice for using your Prepaid529 account. Visit the State Council of Higher Education for Virginia (SCHEV) website for a complete list of Virginia public colleges and universities.
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.
A Prepaid529 account must be used within 10 years of the date a student is projected to graduate from high school (also called Projected Enrollment Date).
If the student listed on your account served as an active-duty member of any branch of the United States Armed Forces after their high school graduation, that time will not be counted toward the 10-year period. For more information regarding extension requests, see the Prepaid529 Program Description and Master Agreement.
You can elect to continue to own and make payments to your Prepaid529 account. Your student may use their paid-in-full account at any eligible school to which they applied and are accepted. However, if your child also moved to another state and is no longer eligible for in-state tuition at a Virginia public college or university, Virginia529 will not pay the difference between the in-state and non-Virginia resident rates.
No. You cannot change the student on your Prepaid529 account once it is in TN status.
A status of “TN” on your quarterly statement or online account indicates that more than 10 years have passed since the projected high school graduation date of the beneficiary (student) listed on your Prepaid529 account. Per the Prepaid529 Program Description and Master Agreement, all Prepaid529 benefits must be exhausted by the tenth anniversary of the student’s projected graduation date (also called Projected Enrollment Date).
Once your account reaches TN status, Virginia529 will close the Prepaid529 account approximately 30 days later and automatically transfer the funds into an Invest529 FDIC-Insured Portfolio account for you to use. If you do not have an FDIC-Insured Portfolio, one will be created for you. Account owners will receive written notification via email and mail detailing this process.