College savings 529 plans

A “529 plan” is a state-sponsored investment plan that enables people to save money for a beneficiary to use toward higher educational expenses. Funds can be withdrawn tax-free when used for nearly any type of college expense, and may come with additional state or federal tax benefits.

Save for educational expenses
Save for educational
expenses
Tax-free withdrawals when used for eligible expenses
Tax-free withdrawals when used for eligible expenses
Contribute as little as $25
Contribute as little
as $25

A tax-advantaged, flexible, convenient way to save

Next to retirement planning, saving for education is a top priority for many investors. While the cost of college continues to escalate, consistent investing, sound financial advice and a 529 plan make your goals highly achievable.

BlackRock offers two 529 plans, BlackRock CollegeAdvantage and iShares 529 Plan, both of which are available to qualifying investors in all 50 states.

BlackRock CollegeAdvantage 529 plan portfolios include mutual funds and ETFs from BlackRock, iShares and other leading asset managers. It also has tax advantages for multiple states, with added benefits for Ohio residents.

Service #: 866-529-8582

Plan features

  • Plan is based in Ohio, but available in all states.
  • Ohio residents and tax-parity state1 residents get an additional tax benefit.
  • Investors can select from target date age-based portfolios, static risk-based portfolios and single investment strategies.
  • Low minimums: $25 contribution per investment option gets you started.

Learn more

iShares 529 plancomposed of iShares ETFs, has tax advantages for multiple states, with added benefits for Arkansas residents.

Service #: 888-529-9552

Plan features

  • Plan is based in Arkansas, but available in all states.
  • Arkansas residents and tax-parity state1 residents get an additional tax benefit.
  • Select from targeted asset class exposure, target year-of-enrollment portfolios, static risk-based portfolios and individual iShares portfolios.
  • Low minimum: Get started for a $500 lump sum or $50 a month / $150 a quarter through an automated investment program

Learn more

College planning tools

Determine approximately how much you need to save to pay for college.
Look at different plans to see which is the best option for you.

Get the facts on 529 college savings plans

Although 529 college savings plans have been around for years, a few common misconceptions persist.

  • MYTH #1: You can only invest in your state’s plan

    FACT: You can invest in any 529 plan from any state. However, before investing, you should consider whether there are any additional in-state benefits where you or the beneficiary reside.

  • MYTH #2: A 529 plan can only be used at schools in that plan’s state

    FACT: Plan assets can be used at any eligible school (one that is accredited for financial aid) around the country and abroad. That includes K-12, two- and four-year colleges, graduate schools (including law and medical) and vocational and technical schools.

  • MYTH #3: You make too much money to invest in a 529 plan account

    FACT: There are no income limitations for a 529 plan. In fact, “accelerated gifting” allows the account owner to apply up to five years of annual gift tax exclusion from a single lump sum contribution in a single year without incurring a gift tax.2 However, contribution funding limits vary and are established by each plan.

  • MYTH #4: If your child doesn’t go to college, you will lose your money

    FACT: A 529 account owner always controls the account. You can name another eligible “member of the family” as beneficiary (subject to plan rules), use the funds for your own qualified education expenses or take a non-qualified withdrawal (although the last option does subject earnings to a 10% federal penalty and applicable federal, state and local income tax). Assets in a 529 plan account can grow in perpetuity; there are generally no time or age limitations on use or distribution of plan assets.3

  • MYTH #5: A 529 plan is only for kids

    FACT: Anyone of any age can use a 529 plan to save for education and in fact you can be your own account beneficiary. As long as your school is eligible, you can use 529 assets—even if you’re not attending full-time.

  • MYTH #6: You can only use 529 plan assets for tuition

    FACT: You can use your 529 savings to pay for many qualified higher education expenses, including tuition, fees, certain room and board costs and any supplies required by the school (e.g., computers).

  • MYTH #7: Investing in a 529 plan lowers the chance of qualifying for financial aid

    FACT: There is relatively small effect on federal financial aid eligibility because 529 plan assets are considered assets of the account owner (not the beneficiary). When the parent is the account owner, 529 plan assets are factored into the expected family contribution rate, the same as any other parental asset. Consult with a professional advisor if you have questions on expected impact to financial aid.

  • MYTH #8: If your child receives a scholarship, you will lose the money in the account

    FACT: Not true. 529 plan assets—up to the amount of the scholarship—can be returned to the account owner with a non-qualified withdrawal. The 10% federal penalty will be waived in this instance, but earnings will be subject to any federal, state and local income tax. Or, you can change the beneficiary to another eligible “member of the family.”

  • MYTH #9: Only a parent can be a 529 plan Account Owner

    FACT: With a few exceptions, there are no limitations on account owners or beneficiaries.4 Parents, grandparents, aunts, uncles, friends—almost anyone can be an account owner. Trusts, corporations, and custodial accounts with valid Tax ID numbers may also be account owners.

  • MYTH #10: Only the account owner can contribute to a 529 plan

    FACT: For most 529 plans, anyone can contribute. There can only be one account owner per account, but others – family members and even friends – can contribute.

Important considerations regarding 529 college savings plans

  • How much to save. 529 college savings plan funds can subsidize part or all of a student's education expenses. Use our College Savings Estimator to determine how much money you need to invest relative to your financial goals.
  • When to begin. The sooner you invest, the more likely your 529 plan account is to gain in value and grow (through gains and continued investment) to the size needed to cover most, if not all, college expenses.
  • Tax benefits can vary. While 529 plans usually enable investors to defer federal taxes, state-level tax benefits vary, and may depend on where the account owner and beneficiary reside (“in-state” vs. “out-of-state” plans).
  • Fees. It's important to carefully evaluate the fee structure of each 529 plan you are considering, since fees may ultimately impact earnings.
  • Timing of withdrawals. You choose whether to use 529 plan savings for undergraduate costs, defer for graduate studies or use for other eligible education expenses. For instance, some states allow 529 plan assets to be used for K-12 tuition expenses.
  • Taxes and penalties. Withdrawing funds for anything other than qualified expenses can incur penalties and will be subject to applicable state and/or federal taxes. It's worth noting however that 529 plan assets may be transferred to other beneficiaries, which usually enables you to avoid penalties, and continue to enjoy any tax benefits.
  • Inherent investment risks. As with any other type of investment, 529 plans carry some risk. Most 529 college savings plans are similar to mutual funds, and so may be negatively impacted by market losses.