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Paying for College |
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Do I have to use the money at a state school?No, you can use your 529 Plan account assets at virtually all accredited colleges and universities in the United States and eligible foreign institutions. What expenses can I use the money for?Money in the 529 Plan account can be used for qualified higher education expenses which include tuition, books, room and board, etc. Download or request an Enrollment Kit for more information. How and when can I take distributions from the account?You can always withdraw money from your 529 account as required. Note: Withdrawals for non-qualified expenses may incur federal income tax and a 10% federal penalty tax. Qualified withdrawals include money for tuition, books, room and board, etc. You may NOT take loans against your 529 account. You have several ways to withdraw money (take a distribution) from your 529 account:
Payments made to recipients other than the account beneficiary, college, or university, or tuition payment service will be reported as such on Form 1099-Q for tax reporting purposes. Additional documentation (college invoice, statement, receipts) may be required by the IRS to verify that such payments are qualified. What if my child earns a scholarship?You can withdraw the amount of the scholarship award from your 529 Plan, without penalty; however, other taxes may still apply. Will investing in a 529 Plan affect eligibility for financial aid?529 assets may have a relatively small affect on Federal financial aid eligibility because they are considered assets of the parent (Participant) in the Expected Family Contribution calculator ("EFC"). Conversely, accounts that are considered assets of the child (Beneficiary), such as a UGMA/UTMA account, tend to have a greater affect on Federal financial aid eligibility in the EFC calculation. See Financial Aid for more information. What is Fidelity BillPay® for 529 accounts?Fidelity BillPay for 529 accounts is a free online service that allows you to make single and recurring payments to colleges, tuition payment services, the account owner, or the beneficiary. To learn more, view the Fidelity BillPay for 529 Accounts demo. A minimum $2,500 balance is required to activate the service. If you do not meet the minimum balance requirement within 60 days of enrollment, the service will be cancelled automatically, and you will be required to re-enroll in the future. For questions regarding Fidelity BillPay for 529 accounts, please contact a Fidelity representative at 800-544-1914. Enroll now in Fidelity BillPay® for 529 accounts. Note: Fidelity BillPay for 529 accounts is not intended for Custodial UGMA/UTMA use. What do I need to know before paying college bills using Fidelity BillPay® for 529 accounts?To facilitate bill payments to colleges, please include the following information when setting up the payee:
The total market value is based on the prior business day's market value of the portfolios in your 529 account. This market value may fluctuate between the time you enter your bill payment request and when the amount is deducted from your account. If the payment request is not available due to a decrease in market value, you will be notified that your transaction was not accepted and you will need to re-submit your request. If you need to withdraw your entire account balance please call a representative at 800-544-1914. Note: Payments will be deducted from your account on the withdrawal date. For 529 accounts invested in multiple portfolios, the amount requested through Fidelity BillPay for 529 accounts will be withdrawn from each portfolio held in your designated 529 account on a pro-rata basis. If you prefer to provide direction on the specific portfolio to deduct the requested amount from, please call a representative at 800-544-1914 or fill out the College Investing Plan Distribution form (PDF) |
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