The CollegeAmerica difference
Like all 529 savings plans, CollegeAmerica is a tax-advantaged way to save for college tuition and expenses. Your 529 savings plan withdrawals will be free from federal tax as long as you use them for qualified education expenses like room and board, tuition, required books and supplies for higher education. You can also use your 529 plan to pay for K-12 tuition up to $10,000 per year per beneficiary. The cost of certain apprenticeship program expenses is another qualified education expense.
You can even use 529 plans to pay for certain student loan expenses, including the loans of a beneficiary's sibling, up to a $10,000 lifetime maximum.
As long as you use your 529 savings plan funds for qualified education expenses, you'll receive the tax advantages that come with these plans. Your tax treatment may vary, depending on the state you live in. 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.
The plan is sold through financial professionals, so you always have someone to help you strategize for college savings. The underlying investments are managed by Capital Group, home of American Funds, which has been helping investors since 1931.
See why CollegeAmerica earns its reputation as one of America’s best education savings plans.