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Using Your 529 Savings Account

 
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529 Plans are flexible and accessible.

When your child is ready to take the next step, The Education Plan® will be ready too. You can use your college savings plan for any qualified higher education expense - tuition, room and board, fees, books, computers, and more.

The Education Plan 529 is flexible. Use your 529 Plan savings for more than traditional 4-year college expenses, including:

  • Tuition and fees
  • Books
  • Supplies and equipment
  • Room and board for beneficiaries attending on at least a half-time basis.
  • Computer technology, equipment, internet access
  • Expenses for educational special needs services
  • Up to $10,000 a year for K-12 tuition*
  • Transfers up to $15,000 a year to an ABLE account for the beneficiary*
  • Apprenticeship expenses*
  • Up to $10,000 for student loan repayment*
  • *If you are a New Mexico taxpayer, New Mexico and the federal government currently have different definitions for “qualified higher education expenses” for tax purposes. See this Important Notice to New Mexico Taxpayers for more information. 

 

What if….?

The future can’t be predicted. That’s why the flexibility of a 529 Plan is so important.

What if I need my 529 savings before my child goes to college?

You can take the savings out of The Education Plan any time and for any reason. However, if the money is not used to pay for qualified education expenses, earnings may be subject to federal income taxes and any applicable state income tax, as well as an additional 10% federal tax penalty on earnings.

What if my child receives a loan or scholarship?

Loans and scholarships usually don’t cover all education costs. You can use your 529 savings to pay for qualified expenses that aren’t covered by other sources.

What if my child doesn’t go to college?

529 savings can be used at accredited technical and vocational schools too, so your child isn’t limited to a traditional four-year college.

If your child doesn’t use the 529 Plan savings, you have three options: you can keep the money in the account in case your child changes his or her mind in the future, change the account beneficiary or make a nonqualified withdrawal.

The “lifetime” of a 529 plan

  • Open an account with with as little as $1
  • Your money is invested based on the investment options you choose
  • You continue to make regular contributions
  • All contributions and earnings in your 529 account continue to be reinvested in the plan
  • The savings in your 529 Plan grow over time
  • When your child is ready for college, withdraw 529 plan savings to pay for qualified expenses


1 The Plan is neither FDIC insured nor guaranteed and may lose value.
2 When withdrawals are used for other purposes, the earnings portion of the withdrawal is subject to federal income taxes and any applicable state income tax, as well as an additional 10% federal tax and the recapture of all previous New Mexico tax deductions taken for contributions to an account.

 

A College Savings
Award Program

The deadline to apply for the Saving for Success Award is December, 21, 2022.

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The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

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Phone: 1-877-337-5268
We're available Monday to Friday 8 a.m. to 7 p.m. MT

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For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The Education Plan is administered by The Education Trust Board of New Mexico. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-today operations, including investment advisory, recordkeeping and administrative services. The Education Plan’s portfolios invest in: (i) mutual funds; (ii) exchange traded funds; and/or (iii) a funding agreement issued by New York Life. Investments in The Education Plan are not insured by the FDIC. Units of the portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the portfolios you choose. You could lose all or a portion of your money by investing in The Education Plan depending on market conditions. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

Ugift is a registered service mark of Ascensus Broker Dealer Services, LLC.

The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

All other marks are the exclusive property of their respective owners.

Not FDIC-Insured. No Bank, State or Federal Guarantee. May Lose Value.