Cue campus life! School books and changing leaves. Libraries and lecture halls. And concerns about post-college debt. How much should you cover? How much should your child cover?
Time to withdraw money from your 529 education savings account? Here's how to get the most from your college savings fund.
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Life is full of surprises — your child may get a scholarship or decide to take a break from school. It’s all good. Your 529 savings plan can flex to meet your family’s changing needs.
It’s for more than tuition.
Funds from your 529 savings plan can pay for required books and supplies, on- and off-campus housing and technology needs.
You can transfer your 529 savings plan balance to another child, a different member of your family — or even to continue your own education.
It’s not just for college.
You can use a 529 savings plan for K-12 tuition (up to $10,000 per year, per student), as well as for eligible continuing education after — or instead of — college. Withdrawals for K-12 expenses may not be exempt from state tax in certain states.
Wondering how to make the most of your child's education savings? Get answers about opening an account, making contributions and withdrawals, updating your beneficiaries and more.
Yes, ask your financial professional to send the money directly to an eligible educational institution. If you own a CollegeAmerica account, you can contact us to process the transfer. Remember, if withdrawals are used for purposes other than qualified education expenses, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax. States take different approaches to the income tax treatment of withdrawals. For example, withdrawals for K-12 expenses may not be exempt from state tax in certain states. State tax treatment varies.
Transferring assets from one 529 savings plan to another typically involves completing forms provided by one or both plans. If you want to transfer 529 savings plan assets into CollegeAmerica, a financial professional can assist you.
You generally have 30 years after high school graduation to use the assets in the account or change beneficiaries — which would set a new 30-year timeline.
You trust your doctor with your health and your mechanic with your car. You shouldn’t settle for anything less when you’re deciding where to invest your money.
Trusted by more than 1 million families nationwide, CollegeAmerica is the country’s largest 529 savings plan,* with more than $92.7 billion invested.†
Any adult who's a U.S. citizen or legal resident can open a CollegeAmerica 529 savings plan, regardless of income.
The earnings in a 529 savings plan are exempt from federal taxes if withdrawals are used for qualified expenses. And some states offer tax benefits as well.
CollegeAmerica fees are among the lowest in the industry.**
If withdrawals are used for purposes other than qualified education expenses, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax. States take different approaches to the income tax treatment of withdrawals. For example, withdrawals for K-12 expenses may not be exempt from state tax in certain states. State tax treatment varies.
A 529 CollegeAmerica savings plan is only one type of investment Capital Group offers. For a complete investment strategy for your growing family we recommend choosing a financial professional to work with via our financial professional locator. Ready to open a new account? Review the CollegeAmerica program description and then download the application below.
* Largest by assets, according to the 4Q 2021 College Savings Quarterly Data Update from ISS Market Intelligence.
† As of December 31, 2021, CollegeAmerica AUM is $92.7B.
‡ Number of accounts as of December 31, 2021.
**"529 College Savings Quarterly Fee Analysis, ISS Market Intelligence, Fourth Quarter 2021. CollegeAmerica's fees were in the top quartile of 31 national advisor-sold 529 plans and the top quartile of 26 national fee-based, advisor-sold 529 plans based on the average annual asset-based fees.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. Similar information is contained in the CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors, Inc. and sold through unaffiliated intermediaries.
Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits, such as financial aid, scholarship funds and protection from creditors, not available through CollegeAmerica. Before investing in any state's 529 plan, investors should consult a tax advisor. CollegeAmerica is a nationwide plan sponsored by Virginia529.
This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
Use of this website is intended for U.S. residents only.
American Funds Distributors, Inc.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.