Virginia 529 Plan And College Savings Options
Virginia has a 529 plan called Invest529 that can help you save for college. Virginia also has a 529 Able Plan as well.
If you live in Virginia, 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 Virginia. Each state has different rules when it comes to 529 plan savings.
Average Cost Of College In Virginia
When saving for college in Virginia, 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 170 colleges and universities in the State of Virginia.
The total average cost of college (Cost of Attendance) in Virginia for in-state residents is $21,673 for 2022. 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 $8,452 for 2022. The cost of tuition in Virginia has been rising at about 1% 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.
Virginia 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 Virginia.
Virginia offers a state tax deduction for contributions to a 529 plan of up to $4,000 for all tax filing statuses The state also allows unlimited carry-forward of excess contributions, allowing for super-funding.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $550,000.
Rollovers into the state plan are allowed but not eligible for the tax deduction.
Outbound rollovers are subject to recapture of prior Virginia tax deductions.
Qualified distributions from a Virginia and non-Virginia 529 plan are tax-free.
Virginia does conform with Federal law in regard to using a 529 plan for K-12 tuition. See this guide: Using a 529 Plan For Elementary and High School Private Education.
Virginia does conform with Federal law for using a 529 plan for student loans.
Non-Qualified Distributions Taxes, Penalties, Recapture
A non-qualified withdrawal from a Virginia 529 is subject to Virginia taxes on the full amount to recapture prior year tax deductions.
Virginia 529 College Savings Plan Options
Virginia has several 529 plan options - one consumer plan and one plan that is sold by financial advisors (we're big advocates of doing-it-yourself, you don't need to pay a financial advisor for this). They also have an old pre-paid tuition program that is no longer taking new enrollment.
The Invest529 Plan is the name of Virginia'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,Franklin Templeton, Invesco, American Funds and more.
You can open a Virginia 529 Plan here >>
There is a program management fee of 0.049%. Virginia just reduced this fee by 46% in 2022.
The underlying funds all charge expense ratios from 0.00% to 0.52% depending on the investment option.
Who Should Use It:
We recommend that Virginia residents use the Virginia Invest529 plan due to the tax benefits, low fees, and plan investment options.
We recommend that out-of-state residents utilize other plans.
Virginia Prepaid 529 closed to new accounts in 2019. However, all existing accounts will continue to be in effect based on the time of purchase.
Virginia 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.
The ABLEnow play is a 529A plan open to all residents in Virginia.
This plan allows contributions of up to $17,000 per year from all sources.
There is no minimum contribution for the ABLEnow account.
The plan does have an account maintenance fee of $3.25 per month. It also has a program management fee of 0.10% to 0.15%.
You can open an ABLEnow Plan 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:
Backer 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.
Virginia 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 Virginia Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Claire Tak