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Key Terms

A tax–advantaged higher-education savings program designed to help families meet the ever–rising cost of higher education through planning and saving in a variety of investment options and programs.

An individual who is 18 years of age or older and a U.S. citizen or legal U.S. resident who controls the account assets and distributions. The account owner generally may also be a U.S. trust, corporation, partnership, nonprofit organization, custodian, guardian or other entity.

Type of Invest529 portfolio in which the objective of the investment mix aligns with the target beneficiary’s age and adjusts automatically over time to a more conservative investment mix.

The individual who will benefit from the Virginia529 account. A beneficiary must be a U.S. citizen or legal U.S. resident.

A Virginia529 savings program offered exclusively through authorized financial advisers in partnership with American Funds®, one of the country’s largest mutual fund companies. Includes a wide variety of American Funds mutual fund investment options.

The person named by the Account Owner to assume account ownership in the event of the Account Owner’s death. 

A withdrawal from an account.

A Qualified Distribution is a withdrawal of funds for 1) the properly documented Qualified Higher Education Expenses of the designated Beneficiary or 2) a qualified Rollover to another Qualified Tuition Program.

A Non-Qualified Distribution is one made for any reason other than the two described above. Non-Qualified Distributions will be subject to federal income tax on the earnings and Virginia state income tax on the earnings for Virginia taxpayers, as well as a federal penalty of 10 percent of the earnings, reported on the taxpayer’s federal tax return. Virginia taxpayers will need to recapture any deductions they have previously taken on the amount of the non-qualified distribution.

An accredited post-secondary educational institution offering credit toward a bachelor’s degree, an associate degree, a graduate level or professional degree or another recognized post-secondary credential. Certain proprietary institutions and post-secondary vocational institutions are also considered to be Eligible Educational Institutions. The institution must be eligible to participate in a student financial aid program under Title IV of the Higher Education Act of 1965 (20 U.S.C. Section 1088).

To check the eligibility of a school, visit fafsa.ed.gov and select “School Code Search” or contact the school directly.

A type of investment option available in Invest529 which preserves principal while seeking income. Balances in this portfolio are insured by the FDIC up to $250,000, the maximum amount currently allowed by federal law. Note that other balances held in accounts with Union Bank & Trust may be aggregated in determining the maximum coverage amount.

A savings program available directly from Virginia529 with a number of investment portfolios, including age-based evolving, non-evolving and an FDIC-insured portfolio to which account owners can decide how much and how often to contribute. Previously Virginia Education Savings Trust (VEST).

A change to all or part of an Account Owner's Virginia529 Account holdings to another investment option within Virginia529 (Investment Option Change). IRS regulations permit an investment option change twice per calendar year by an Account Owner for all Virginia529 Accounts held for a specific Beneficiary. Also known as an Investment Direction Change.

As defined by IRC Section 529: a son or daughter, or a descendant of either; a stepson or stepdaughter; a brother, sister, stepbrother, or stepsister; the father or mother, or an ancestor of either; a stepfather or stepmother; a son or daughter of a brother or sister; a brother or sister of the father or mother; a son-in-law, daughter-in-law, father in-law, mother-in-law, brother-in-law, or sister-in-law; the spouse of the Beneficiary or the spouse of any individual described above; or a first cousin of the Beneficiary. For purposes of determining who is a Member of the Family, a legally adopted child of an individual shall be treated as the child of such individual by blood. The terms “brother” and “sister” include half-brothers and half-sisters. 

Type of Invest529 portfolio in which the investment mix is static and does not change over time.

An investment option available to an Invest529 Account Owner. Options include age-based evolving, non-evolving (static) and FDIC-insured.

A type of 529 plan offered by Virginia529 that allows families to prepay the cost of future in-state undergraduate tuition and mandatory fees at Virginia public colleges and universities for newborns through ninth graders. Purchase price is based on the payment plan selected and the age of the beneficiary at the time of purchase. Payout amounts are based on the type of school attended – Virginia public, Virginia private or out of state – and may be applied to any Eligible Educational Institution (EEI). Accounts may only be opened during a limited enrollment period each year. Previously the Virginia Prepaid Education Program (VPEP). 

Document containing detailed information on all aspects of the specific Virginia529 program covered.

Expenses for which a 529 account may be used, as allowed under IRC Section 529. These are:

  • Tuition (may be for college, graduate-level degrees or private or religious K-12 tuition)
  • Fees
  • Room and board expenses during an academic period in which the Beneficiary is enrolled at least half-time in a degree, certificate or other program that leads to a recognized educational credential awarded by an Eligible Educational Institution
  • Textbooks, supplies and equipment required for enrollment or attendance
  • Computers, peripheral equipment, software and internet service primarily used by the beneficiary
  • Special needs services incurred in connection with enrollment or attendance

A program established and maintained by a State or agency under which a person may make contributions to an account to meet the Qualified Higher Education Expenses of the designated Beneficiary of the account. Virginia529 sponsors three programs: Invest529, Prepaid529 and CollegeAmerica. 

A tax-free reinvestment of funds from one Qualified Tuition Program to another. Once funds are distributed there is a 60-day time frame in which funds must be deposited into the new Qualified Tuition Program. IRS regulations allow only one Rollover for the same Beneficiary during a rolling 12-month period. NOTE: Requests to move funds among Invest529 or CollegeAmerica are considered Investment Direction Changes, not Rollovers. 

For purposes of Prepaid529 only, Virginia529 defines tuition as the undergraduate in-state semester or term charges for tuition and mandatory fees required and imposed as a condition of enrollment of all students by a two-year or four-year Virginia public institution. Please see the Prepaid Program Description and Master Agreement for a complete definition.

An independent agency of the Commonwealth of Virginia, with a mission to provide superior, affordable, innovative, tax-advantaged higher-education savings options to help families and others achieve their academic goals.