New Mexico’s Best-Kept Secret: More Education, Less Debt with The Education Plan
Looking for an easy way to strengthen your current and future association membership? Associations could consider informing their members about the benefits of saving towards education goals through The Education Plan, New Mexico’s best-kept secret.
The Education Plan is New Mexico’s 529 education savings plan, administered by The Education Trust Board of New Mexico. It is intended to help more New Mexicans achieve their higher education goals and to reduce the burden of student debt.
Since its creation 23 years ago, the plan has grown to more than 24,000 accounts with close to $600 million in total assets.
Studies show that with just $500 saved, a child is three times more likely to attend college or vocational school and four times more likely to graduate. With no minimum contribution required, an account can be opened at any time and savings can easily grow with the help of contributions from family and friends. Plus, contributions are fully deductible on New Mexico state income tax returns. Investment growth and distributions are tax-free as long as the account is used for qualified education expenses.
Anyone who is receiving a tax refund or stimulus check this year, and is fortunate enough not to need the money for living expenses, should think about opening a 529 account for a loved one or making a contribution to an existing account.
The Education Plan is both flexible and versatile, individuals can open an account for anyone – a child, other loved ones, or even themselves. Plan funds can pay for qualified expenses including tuition, housing, books, computers, fees and more, and can be used at any accredited college, university, trade or vocational school anywhere in the country or online, and even many internationally.
If a plan beneficiary doesn’t use the money in the account, the account owner can change the beneficiary to another member of the family. In addition, 529 plan savings have a minimal effect on financial aid eligibility if owned by a parent or the student.
Associations can easily promote a strong workforce by educating their members on how to enhance their benefits package by including The Education Plan. Dedicated outreach staff members are available to conduct educational workshops, supply information and provide hands-on enrollment assistance. If more associations and employers followed suit, it could have an unprecedented impact on workforce and economic development in New Mexico.
To learn more about offering The Education Plan as an employee benefit, visit www.theeducationplan.com/employers or call (505) 412-5121. Please mention that you are a member of the New Mexico Society of Association Executives.
Features for Employers:
No cost to you, the employer
Potential tax benefits for you and your employees
No fiduciary responsibility
Easily enhance your benefits package
Empower your employees and their loved ones to further their education with less debt
Gives you a competitive edge for recruitment & retention
Matching contributions optional
Frequently Asked Questions
A 529 plan is a tax-advantaged investment account that is designed to grow savings for future education expenses for a specified beneficiary. 529 plans offer unique benefits and features that make them an appealing strategy for education related saving.
A 529 plan can be used for “qualified educational expenses.” For federal tax purposes, qualified educational expenses include:
- Tuition and fees at accredited higher education institutions
- Books
- Supplies and equipment
- Room and board for beneficiaries attending on at least a half-time basis.
- Computer technology, equipment, and internet access
- Up to $10,000 a year for K-12 tuition and expenses (Limit increase to $20,000 in 2026)
- Expenses for educational special needs services
- Transfers to an ABLE account for the beneficiary (transfer subject to annual limit)
- Apprenticeship expenses
- Up to $10,000 for student loan repayment
- Credentialing expenses and certification programs
- Roth IRA rollover for the beneficiary
If you're not sure if an expense is considered "qualified," we recommend consulting with a tax professional or advisor. Unqualified expenses will be treated like ordinary income: state and federal taxes will apply, with a 10% federal penalty for withdrawals from your 529 plan used to pay for them.
New Mexico residents can deduct contributions to The Education Plan from their state taxable income each year. This includes contributions made to an account that you are not the account owner of.
You cannot deduct contributions from federal income taxes.
Any person at least 18 years old with a valid Social Security Number (SSN) or Tax Identification Number (TIN) can open a 529 account. The account holder chooses the investment options, designates a beneficiary, and requests the distribution of funds.
The cost of college continues to rise, including tuition, housing, food and supplies, so it’s important to begin saving as soon as possible. You can learn more about how much a typical college education costs on our Cost of College page. It’s never too early or too late to start.
The Education Plan offers a variety of investment options to fit you and your family’s needs, risk tolerance and goals. You can see all of the available investment portfolios on the investments page.
Yes, you can use up to $20,000* a year to cover tuition and expenses for K-12 education.
Qualified K-12 expenses include:
- Tuition (public, private, and religious)
- Curriculum materials, books (including digital/online) and instructional materials
- Tutoring and instructional classes**
- Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission
- Dual enrollment program fees
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies
*Starting in tax year 2026. The annual limit is $10,000 in tax year 2025 and permitted for tuition only.
**Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i) is licensed as a teacher in any State,
(ii) has taught at an eligible educational institution,
or (iii) is a subject matter expert in the relevant subject.
You can open an account with The Education Plan online or by mailing in the enrollment form. In order to open an account, you will need the following information:
- Your social security number or TIN
- Your address
- Your bank account information (in order to fund the account)
- The beneficiary’s social security number or TIN
- The beneficiary’s birthday
-The beneficiary’s address
