North Carolina 529 Plan And College Savings Options
North Carolina has a 529 plan called NC 529 that can help you save for college. North Carolina also has a 529 Able Plan as well.
If you live in North Carolina, these might be good options for you to save for college.
These programs are designed to help make college more affordable - so that you can get the education you need. By saving for college early on, you can make paying for college easier down the road.
If you're not quite sure how 529 plans work, check out this starter guide to What Is a 529 Plan?
There is also a specific order of operations to save for college that we recommend families follow. These programs are specific to the State of North Carolina. Each state has different rules when it comes to 529 plan savings.
Average Cost Of College In North Carolina
When saving for college in North Carolina, it's important to take into consideration the cost of attendance in the state. If you choose to go to an out-of-state school, you need to look at the average cost of attendance in that state.
There are 188 colleges and universities in the State of North Carolina.
The total average cost of college (Cost of Attendance) in North Carolina for in-state residents is $18,239 for 2020. This includes tuition, room and board, books and supplies, and other expenses.
For just tuition alone, the average undergraduate tuition for in-state residents is $3,356 for 2020. The cost of tuition in North Carolina has been rising at about 1.5% per year.
See how this compares to the average cost of college here. Keep in mind the average student loan debt by graduating class here.
Explore the data here.
North Carolina 529 Plan Tax Information
Tax savings is one of the big benefits of using a 529 plan to save for college. On a federal-level, there is no tax savings for contributions, but qualified distributions are tax-free.
Here are the special tax benefits and considerations for using a 529 plan in North Carolina.
North Carolina doesn't offer any tax deductions for contributions to a 529 plan.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $450,000.
North Carolina follows Federal tax treatment.
Qualified distributions from a North Carolina and non-North Carolina 529 plan are tax-free.
North Carolina does conform with Federal law in regards to using a 529 plan for K-12 tuition. See this guide: Using a 529 Plan For Elementary and High School Private Education.
North Carolina does not conform with Federal law for using a 529 plan for student loans, yet. This may change before tax filing.
Non-Qualified Distributions Taxes, Penalties, Recapture
A non-qualified withdrawal from a North Carolina 529 plan is subject to federal taxes and penalties only.
North Carolina 529 College Savings Plan Options
North Carolina has one 529 plan option - one consumer plan.
NC 529 Plan
The NC 529 Plan is the name of North Carolina's 529 Plan. This plan offers a variety of investment options, including age-based portfolios that become more conservative as the child approaches college, and static investment fund options.
The funds offered include Vanguard.
There is a program management fee of 0.25%.
The underlying funds all charge expense ratios from 0.06% to 0.15% depending on the investment option.
Who Should Use It:
We recommend that North Carolina residents use the NC 529 plan due to the low fees and plan investment options.
We recommend that out-of-state residents consider this plan.
North Carolina 529 Able Plan Options
529A Able accounts are accounts designed to help those with disabilities escape poverty and save for themselves. Learn more about 529A Able Plans here.
NC Able Program
The NC ABle Program is a 529A plan open to all residents in North Carolina.
This plan allows contributions of up to $15,000 per year from all sources.
It does have a minimum initial contribution amount of $25 per account. The minimum subsequent contribution amount is $25.
The plan does have an account maintenance fee of $60 annually, assessed at $15 per quarter. It also has a program management fee of 0.32%.
You can open an NC Able Program here.
Other Programs To Save For College
A 529 plan is one way to save for college. Remember, we have a full guide on our approach to college savings here - and it helps you find other options.
If you're looking for ways to boost your college savings, check this out:
CollegeBacker is one of our favorite ways to save for college because they make gifting for college so easy. You can setup an account, link your 529 plan (in most states), and get a unique URL that you can share with friends and family to save for your children's college.
Plus, they have Backer Bucks, which allow you to earn rewards and rebates for the shopping you already do - directly deposited into your children's 529 plan.
Upromise is another awesome tool to help you save for college because they have a lot of ways that you can earn money for your 529 plan. You can get rebates and rewards, and you can get cash back into your child's 529 plan by using the Upromise credit card.
North Carolina Financial Aid
Using a 529 plan isn't the only way to save money for college. Each state typically offers a variety of financial aid programs for their residents. These include scholarships and grants, and sometimes unique forgivable student loan opportunities.
Check out the list of North Carolina Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.