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Here's what other parents are asking

It’s time! Using your 529 savings plan.

You may not feel emotionally ready for your child to leave the nest, but you’re better prepared financially, thanks to your 529 savings plan. You’ve been smart about saving, now be smart about how you spend that money.

  • Know the rules for 529 savings plan withdrawals.
  • Think about how and when you’ll access the money.
  • Avoid withdrawals for nonqualified expenses. 

Prepare your child for college loan repayments

Congratulations to your future graduate and to you! As college winds down, your grown child is ready to face some real-life responsibilities, which may include student loan repayments. Whether you're helping her pay off the debt, or she's doing it alone, employing smart strategies can help make post-college life a little easier.

  • Know when the payment plan starts and how long it extends.
  • Explore ways to boost monthly payments and conquer the debt faster.
  • Develop a long-term plan with a financial professional.

Quick tips for financial independence after college

Good job guiding your child all the way through college! Now that he's done with the textbooks, he has to learn how to balance the books financially for success in life’s next chapter. You can help him get started by discussing these important money topics. Grab a coffee and start the conversation.

  • Take a good look at income and expenses. 
  • Keep a close eye on credit and debt.
  • Start planning for future responsibilities. 

How flexible is my 529 savings plan?

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.

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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.

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It’s transferable.

You can transfer your 529 savings plan balance to another child, a different member of your family — or even to continue your own education.

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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.

Have more questions?

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.

Can I send 529 savings plan withdrawals directly to the school?

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.

How can I roll over assets from one 529 savings plan to another?

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.

Is there a time limit for using the assets in the account?

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.

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CollegeAmerica 529 savings plan

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,1 with more than $66 billion invested.2

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We're helping more than 2.4 million future students pursue their dreams.3

  • 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.4
  • 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.
  1. Largest by assets, according to the 1Q 2020 "529 College Savings Quarterly Update" from ISS Market Intelligence.
  2. As of March 31, 2020, CollegeAmerica AUM is $66.4.
  3. Number of accounts as of March 31, 2020, Strategic Insight.
  4. "529 College Savings Quarterly Fee Analysis," ISS Market Intelligence, 4Q 2019. CollegeAmerica’s fees were in the top quartile of 30 and 18 plans based on the average annual asset-based fees for national advisor-sold and fee-based advisor-sold 529 plans, respectively.

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, summary prospectuses and 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. 

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation. 

American Funds Distributors, Inc., member FINRA.

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.