Washington 529 Plan And College Savings Options
Washington has a 529 plan called DreamAhead that can help you save for college. Washington also has a 529 Able Plan as well.
If you live in Washington, 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 Washington. Each state has different rules when it comes to 529 plan savings.
Average Cost Of College In Washington
When saving for college in Washington, 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 118 colleges and universities in the State of Washington.
The total average cost of college (Cost of Attendance) in Washington for in-state residents is $20,610 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 $5,493 for 2020. The cost of tuition in Washington 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.
Washington 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 Washington.
Washington does not have a state personal income tax, which means they don't provide any tax benefits for 529 plan contributions either.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $500,000.
Rollovers into the state plan are allowed.
Qualified distributions from a Washington and non-Washington 529 plan are tax-free.
Washington 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.
Washington 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 Washington 529 follows federal tax law.
Washington 529 College Savings Plan Options
Washington has several 529 plan options - one consumer plan and one pre-paid tuition program.
DreamAhead College Investment Plan
The DreamAhead College Investment Plan is the name of Washington'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, Fidelity, JPMorgan, and Schwab.
There is a program management fee of 0.12%.
The underlying funds all charge expense ratios from 0.035% to 0.18% depending on the investment option.
Who Should Use It:
We recommend that Washington residents use the DreamAhead 529 plan due to the low fees and plan investment options.
We recommend that out-of-state residents utilize other plans.
Guaranteed Education Tuition (GET)
Washington's Guaranteed Education Tuition (GET) is a prepaid college tuition program. The State of Washington guarantees that the value of an account will keep pace with the cost of college tuition, no matter how much it changes in the future.
The program offers units equal to 1% of the resident undergraduate tuition at the highest priced Washington State university.
It was also convertible to private and non-Washington institutions based on the value of one unit.
Washington 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.
Washington State Able Savings Plan
The Washington State Able Savings Plan is a 529A plan open to all residents in Washington.
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 $10.
The plan does have an account maintenance fee of $35 annually. It also has a program management fee of 0.30%.
You can open an Washington State Able 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:
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.
Washington 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 Washington Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.