As national 529 industry professionals prepare to celebrate 529 College Savings Day on May 29, Texas Comptroller Glenn Hegar is encouraging families to save for their children’s higher education expenses using the state’s 529 college plans.
“529 day is a reminder that it’s never too late – or too early – to start planning for a child’s college education,” Hegar said. “Families will find that when it comes to planning for their children’s future education, every little bit adds up. One way to get a head start is by opening a new 529 plan or contributing to an existing one.”
Texas offers three tax-advantaged 529 plans: the Texas College Savings Plan® (TCSP) and the LoneStar 529 Plan® (LS529), both college savings plans, and the Texas Tuition Promise Fund® (TTPF), a prepaid tuition plan. The plans are known as 529 plans because they are authorized by Internal Revenue Code Section 529.
In commemoration of 529 College Savings Day, the Comptroller’s office is offering a special webinar on May 26 at 1 p.m. Central Time to provide information about the TCSP and LS529 college savings plans.
The TCSP and LS529 allow families to work toward building college savings by investing in one or more portfolios, either by enrolling in TCSP directly or in LS529 through a financial advisor. In addition to paying for higher education costs at schools nationwide, TCSP and LS529 can be used to pay up to $10,000 per year of K-12 tuition expenses. Age-based portfolios are designed for college savers, and account owners should discuss with their advisors whether paying for K-12 tuition expenses is appropriate for their situation. The plans are open for enrollment year-round.
The TTPF is designed to help families and individuals prepay and lock in today’s rates for all or some future undergraduate resident tuition and schoolwide required fees at any two- or four-year Texas public college or university, excluding medical and dental institutions. TTPF newborn enrollment is available through July 31 to lock in 2020-21 prices for children younger than 1 year of age; open enrollment begins Sept. 1 to lock in 2021-22 prices. Texas residency requirements apply.
The Texas Prepaid Higher Education Tuition Board administers all three 529 plans through the Comptroller’s office.
The Texas Tuition Promise Fund, the Texas College Savings Plan and the LoneStar 529 Plan are established and maintained by the Texas Prepaid Higher Education Tuition Board and distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC. Orion Advisor Solutions, Inc, 17605 Wright Street, Omaha, NE 68130, is the plan manager and administrator.
Plan descriptions and agreements may be obtained at the following websites or by calling 1-800-445-GRAD (4723), and selecting the option # below:
Texas Tuition Promise Fund: www.texastuitionpromisefund.com or option #5.
Texas College Savings Plan: www.texascollegesavings.com or option #3.
LoneStar 529 Plan: www.lonestar529.com or option #4.
Purchasers should read these documents carefully before purchasing a contract or opening an account.
Non-residents of Texas should consider whether their home state, or the beneficiary’s home state, offers its residents any state tax or other state benefits, such as financial aid, scholarship funds, and protection from creditors that are only available for participants in that state’s 529 plan. Participants should consult their tax advisor.
The Texas Tuition Promise Fund®
Participation in the Texas Tuition Promise Fund does not guarantee admission to or graduation from any college or university. Only the named purchaser may direct redemptions, withdrawals, changes in the designated beneficiary or other contract changes.
A contract, including the amount contributed, and any amount applied as a benefit or paid as a refund, is not guaranteed, insured or treated as a deposit or other obligation by the state of Texas, the FDIC, the Texas Prepaid Higher Education Tuition Board, any other state or federal governmental agency or Orion Advisor Solutions, Inc. or its affiliates. The contracts have not been registered with or approved by the U.S. Securities and Exchange Commission or with any state.
Purchasers should carefully consider the risks, administrative fees, service and other charges and expenses associated with the contracts, including Plan termination and decreased transfer or refund value. Transfer value applies to tuition redemption at Texas private colleges and universities, out-of-state colleges and universities, medical and dental schools and career schools. Transfer value is limited to the lesser of (1) the costs the Tuition Unit would cover at a public college or university or (2) the original purchase price of the Tuition Unit plus or minus the Plan’s net investment earnings or losses on that amount. Orion Advisor Solutions, Inc., serves as plan manager of the Plan.
The Texas College Savings Plan® and the LoneStar 529 Plan®
Before investing in the direct-sold Texas College Savings Plan or the advisor-sold LoneStar 529 Plan (“Savings Plans”), investors should carefully consider the investment objectives, risks, administrative fees, service and other charges and expenses associated with municipal fund securities. Investors should read each Plan Description and Savings Trust Agreement carefully before investing.
Total asset-based fees for the most recent quarter end are available here for the LoneStar 529 Plan and here for the Texas College Savings Plan. Additionally, all program fees are contained in each plan’s respective Plan Description and Savings Trust Agreement.
The account, the principal invested, and any investment return are not guaranteed, insured, or treated as a deposit or other obligation by the state of Texas, the FDIC, the Texas Prepaid Higher Education Tuition Board, any other state or federal governmental agency, or Orion Advisor Solutions, Inc. (“Orion”), NLD, or Gemini or their respective affiliates. An account in the Savings Plans might not make money and could lose money (including the principal invested) if money is invested in the Savings Plans. Interests in the Plan have not been registered with or approved by the U.S. Securities and Exchange Commission or with any state.