Path2College 529 Plan

Frequently Asked Questions

Got questions? We have answers!

About 529 Plans

Q:
What is a 529 plan?

A 529 plan is a tax-advantaged savings plan designed to save for college and other qualified higher education expenses. 529 refers to Section 529 of the Internal Revenue Code.

Q:
What if my child decides not to attend college?

If the beneficiary does not attend college, the account owner may change the beneficiary to another eligible family member. If funds are withdrawn for a purpose other than qualified higher education expenses, the earnings portion of the withdrawal is subject to federal and state taxes plus a 10% additional federal tax on earnings (the "Additional Tax"). See the Plan Information and Details section for more information and exceptions.

Q:
How do 529 Plans vary?

529 plans vary in a number of ways, including contribution limits to the account (defined by the states), fees to open and maintain an account, in-state tax treatments such as a state tax deduction, investment options offered, and the plan manager. There may also be other differences, such as special programs or benefits defined by the particular plan. Before investing in a 529 plan, you should consider whether the state where you or your designated beneficiary reside or have taxable income offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.

Q:
How does a 529 plan compare to other college savings options?
Q:
If I move out of Georgia, what will happen to my account?

If you move to another state, you can keep your money invested and continue making contributions to your Path2College 529 account. Before investing in a 529 plan, you should consider whether the state where you or your designated beneficiary reside offers favorable state tax treatment or other benefits if you invest in that state's 529 plan.

Q:
How do I open a Path2College 529 account or contribute to an existing account?

You can help a loved one pay for the rising costs of college by opening a Path2College 529 account or by making a gift contribution to an existing account. Accounts can be opened online or by requesting an enrollment kit by mail. To make a gift contribution to an existing account, obtain a gift code and instructions from the account owner, which the account owner can find here.

Q:
How do I transfer account ownership?

To transfer account ownership, please complete the Transfer Form and submit it to the Plan. You may transfer ownership of your Path2College 529 account at any time. Please note this assignment is an irrevocable action transferring all rights, title and interest in the account to another owner. You will no longer have access to or control of the account.

Q:
How do I know which educational institutions are eligible?

Contact the school to determine if it qualifies as an eligible educational institution or use the Federal School Code Search on the Free Application for Federal Student Aid (FAFSA) website.

Account Management

Q:
What is the status of my contribution?

To view your transaction history, log in to your account, click "View Details" for your beneficiary, and scroll down to the transactions section. You can always speak to one of our college savings specialists at 1-877-424-4377, Monday through Friday, 8:00 AM to 8:00 PM ET.

Q:
Are there any fees associated with opening a Path2College 529 Plan account?

With the Path2College 529 Plan, there are no sales charges, start-up or maintenance fees. To review the current total annual asset-based fees, which are comprised of the underlying investment expenses for each Investment Portfolio, the Plan Manager fee, and state administration fee, please see fees and expenses.

Q:
Do I have to use my account at a Georgia college or university?

No. The money in your account may be used at any eligible educational institution in the United States, and some abroad. This includes public and private colleges and universities, technical colleges, graduate schools, and professional schools.

In addition, up to $10,000 annually per student, in aggregate from all 529 plans, can be withdrawn free from federal tax if used for tuition expenses at a public, private or religious elementary, middle, or high school.

For more on qualifying expenses and the state tax treatment of withdrawals for these expenses, including K-12 school tuition, refer to Plan Details & Information.

Q:
How can I change bank info, change my address, or other account information?

To update your profile information online, including banking information, login here or call the Plan at 1-877-424-4377, Monday through Friday from 8:00 AM to 8:00 PM ET.

Q:
Do I need an account for each child?

Individual 529 accounts have one owner and one named beneficiary.

Q:
Can I rollover funds from another 529 plan into the Path2College 529 Plan?

Yes, you can transfer funds from another 529 college savings plan to your Path2College 529 account for the same beneficiary once within a 12-month period without incurring a taxable event. The 529 plan from which you are transferring funds may be subject to different features, costs and surrender charges. You should consult your tax advisor or the other 529 college savings plan. State and local taxes may apply. For more information see: How to Manage an Incoming Rollover from another 529 Account.

Q:
Can I deposit a refund for dropped courses back into my Path2College 529 Plan account?

Yes – funds may be redeposited to your account within 60 days of the refund without penalty should a student need to withdraw from a class. The recontributed amount cannot exceed the amount of the refund.

Beneficiaries

Q:
Who can be the beneficiary of an account?

Anyone with a valid Social Security number or taxpayer identification number can be the beneficiary, including the account owner.

Q:
Can my beneficiary have more than one Path2College 529 Plan account?

Yes, a beneficiary may have more than one Path2College 529 Plan account. However, an account owner can have only one account for each beneficiary.

For example, a beneficiary may have an account owned by their parent, and/or their grandparent, and/or their aunt, etc. There is an overall maximum account balance limit of $235,000 which applies to all accounts opened for a beneficiary.

Q:
Can I change the beneficiary of my account?

Yes, you can change your beneficiary at any time or transfer a portion of your investment to a different eligible beneficiary. The new beneficiary must be an eligible member of the previous beneficiary's family. For more information see: Change your beneficiary.

Investments

Q:
Where do I get information on Path2College 529 Plan performance?

Performance data for the Path2College 529 investment portfolios is available here: Historical Data.

Q:
What are my investment choices?

Path2College 529 offers you a choice of investment portfolios. These portfolios vary in investment strategy and degree of risk, allowing you to select a portfolio or combination of portfolios that may fit your needs. To see the list of investment portfolios, brief descriptions and associated fees and expenses, visit Researching Investments. For more information on the investment objectives, risks, charges and expenses, read the Plan Description.

Q:
Can I change my investment selection?

Yes, each time you make a contribution you may select from any of the Path2College 529 investment portfolios. Once invested in a particular portfolio, contributions and earnings may be transferred to another portfolio twice per calendar year or upon transfer of funds to a Plan account for a different eligible beneficiary (see the Plan Description for more information). To transfer funds between portfolios, log in to your Path2College 529 account, click "View Details" for your beneficiary, then choose "Change investment options." You may also request mailing the Change of Investment Form and mail it to the Plan.

Contributions

Q:
Are Path2College 529 contributions deductible from federal tax?

No, 529 plan contributions are not deductible for federal income tax purposes.

Q:
Are contributions made pre-tax or after-tax to a Path2College 529 account?

Plan contributions are always made after-tax.

Q:
What is the maximum I can contribute to an account?

There is no maximum contribution amount. However, there is an overall maximum account balance limit of $235,000, which applies to all accounts opened for a beneficiary. Accounts that have reached the maximum account balance limit may continue to accrue earnings.

Q:
How do I contribute to a Path2College 529 account?

You can contribute to a Path2College 529 account by one of the following: check, an electronic funds transfer, establishing a recurring contribution, establishing payroll direct deposit, a rollover from another state's 529 plan account, or redemption proceeds from a Coverdell Education Savings Account or qualified U.S. savings bond. Your contribution will be invested according to your Allocation Instructions, which you may change at any time online, by telephone or by requesting and submitting the Change of Investment Form. For more information, click here.

Q:
How do I sign up for payroll direct deposit?

If you wish to make contributions to your Path2College 529 account from your paycheck, first ask your employer if direct deposit is available, then log in to your Path2College 529 account and follow the "Payroll Direct Deposit" instructions found by clicking the Profile & Documents link or request and submit the appropriate form by mail.

Please visit GA 529 at Work for more payroll direct deposit information.

Online Access

Q:
I forgot my username?

If you have forgotten your Username, please click here.

Q:
I forgot my password?

If you have forgotten your password, please tell us your user name and registered e-mail address here.

Q:
How do I change my password?

To change your password, log in here, choose a beneficiary and select "Profile and Documents," then "Password & Security Features" from the left hand navigation.

Q:
I forgot BOTH my username and password?

If you have forgotten both your Username and password, first retrieve your Username by clicking here. Once you have received your Username, log in, and you can log in with a temporary password.

Q:
How do I unlock my account?

If your account has been locked, please contact the Plan at 1-877-424-4377 from 8:00 AM to 8:00 PM ET Monday through Friday, excluding holidays. We can assist you with unlocking your account. We apologize for the inconvenience.

Q:
How do I sign up for e-Delivery?

To sign up for e-delivery, log in here, click "View Details" for a beneficiary and select "Profile & Documents," then "Delivery Preferences" from the left hand navigation.

Q:
What is Two Factor Authentication, and what are Aggregators?

For information, please click here.

Taxes

Q:
Is there a Georgia income tax deduction?

Yes, contributions are deductible for Georgia income tax purposes up to $8,000 per year per Beneficiary for joint filers, and $4,000 per year per Beneficiary for all others. Please note that a transfer of funds from another state’s 529 plan is not eligible for the Georgia income tax deduction. Georgia tax forms refer to the Path2College 529 Plan as the "Georgia Higher Education Savings Plan" (GHESP); the Path2College 529 Plan is established by the GHESP.

Contributions made during the tax year, or before the following year’s federal tax filing deadline are eligible for the deduction. State tax benefits offered in connection with the Path2College 529 Plan are available only to Georgia taxpayers. You should consult with a qualified tax advisor regarding the application of Georgia state tax benefits to your particular circumstances. Recapture provisions apply. See the Plan Description for details.

Financial Professionals can get more information here.

Q:
What are the federal and state tax advantages?

When you contribute to a Path2College529 Plan account, any earnings can grow federal and Georgia income tax-deferred until withdrawn. Plus, withdrawals used to pay for qualified higher education expenses will be free from federal and Georgia income tax.

Q:
What are the federal estate and gift tax benefits?

Contributions to a Path2College 529 Plan account may help reduce the taxable value of your estate. For more information about gifting, please click here.

Q:
How are withdrawals for non-qualified expenses taxed?

The earnings portion of a non-qualified withdrawal is subject to state and federal income taxation and the 10% additional federal tax on earnings (the "Additional Tax"). See the Plan Description for details.

Q:
How are withdrawals for qualified higher education expenses taxed?

If you are taking a withdrawal to pay for qualified higher education expenses of the beneficiary, there will be no federal or state income tax. Find out how to make a withdrawal.

Q:
Can a HOPE/American Opportunity Credit or Lifetime Learning Credit for qualified tuition and other related expenses still be taken?

The available federal tax benefits for paying qualified higher education expenses through these programs must be coordinated in order to avoid the duplication of such benefits. Account Owners should consult a qualified tax advisor regarding the interaction under the IRC of the federal income tax education-incentive provisions addressing Account withdrawals.

Financial Aid/Scholarships

Q:
Will saving with a 529 Plan affect my eligibility for financial aid?

Assets in a parent owned 529 account have less of an impact on financial aid than some other savings methods. "Expected Family Contribution" (EFC) calculations generally factor parent assets outside of retirement savings at approximately 5% whereas student assets are generally factored in at 20% or more. Therefore, a parent owned 529 account may have less of an impact on financial aid eligibility than assets owned by the student.

For more information, please click here.

Q:
What if my child gets a full or partial scholarship?

If the beneficiary receives a scholarship that covers the cost of qualified expenses, you can withdraw the funds from your account up to the amount of the scholarship without incurring the 10% additional federal tax on earnings (the "Additional Tax"). However, the earnings portion will be subject to federal and state income tax. If the amount withdrawn exceeds the amount of the scholarship, the earnings portion of the excess amount withdrawn will be subject to the Additional Tax. Please consult a qualified tax advisor or consultant.

Withdrawals

Q:
How do I withdraw money to pay for college?

You may request a withdrawal via your account online. Select the beneficiary you would like to withdraw the money for, click "Make a Withdrawal" on the left hand navigation and follow the directions. Alternatively, you may request a withdrawal by calling the Plan at 1-877-424-4377, Monday through Friday, 8:00 AM to 8:00 PM ET, or by using the Withdrawal Request Form.

Q:
What is a taxable withdrawal?

A taxable withdrawal will be subject to applicable state and federal income tax on earnings, if any, but will not be subject to the 10% additional federal tax on earnings (the "Additional Tax").

Examples of taxable withdrawals are: a beneficiary's death, permanent disability, receipt of a scholarship award, or attendance at a military academy.

See the Plan Description for additional information.

Q:
What is the status of my withdrawal?

To view your transaction history, log in to your account or contact the Plan at 1-877-424-4377, Monday through Friday, 8:00 AM to 8:00 PM ET.

Q:
What are qualified higher education expenses?

Qualified higher education expenses are defined generally to include certain room and board expenses, the cost of computers, hardware, certain software, and internet access and related services, and tuition, fees, the cost of books, supplies and equipment required for the enrollment or attendance of a Beneficiary at an Eligible Educational Institution as well as certain additional enrollment and attendance costs of Beneficiaries with special needs. To be treated as Qualified Higher Education Expenses, computers, hardware, software, and internet access and related services must be used primarily by the Beneficiary while enrolled at an Eligible Educational Institution. Qualified Higher Education Expenses do not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.

For federal income tax purposes, Qualified Higher Education Expenses also includes (i) tuition in connection with enrollment or attendance at a primary or secondary public, private, or religious school, up to a maximum of $10,000 of distributions for such tuition expenses per taxable year per Beneficiary from all Section 529 Programs; (ii) expenses for fees, books, supplies, and equipment required for the participation of a Beneficiary in an certified apprenticeship program; and (iii) amounts paid as principal or interest on any qualified education loan of either the Beneficiary, or a sibling of the Beneficiary up to a lifetime limit of $10,000 per individual. Please see the Plan Description for additional information, including the state tax treatment of withdrawals for these expenses.

Q:
What room and board expenses are covered?

The cost of room and board may be treated as Qualified Higher Education Expenses only if it is incurred during an academic period during which the beneficiary is enrolled or accepted for enrollment in a degree, certificate or other program that leads to a recognized educational credential awarded by an Eligible Educational Institution, and during which the beneficiary is enrolled at least half-time. (Half-time is defined as half of a full-time academic workload for the course of study the beneficiary is pursuing based on the standard at the Beneficiary's Eligible Educational Institution.) The amount of room and board expenses that may be treated as a Qualified Higher Education Expense is generally limited to the room and board allowance applicable to a student that is included by the Eligible Educational Institution in its "cost of attendance" for purposes of determining eligibility for federal education assistance for that year. For students living in housing owned or operated by the Eligible Educational Institution, if the actual invoice amount charged by the Eligible Educational Institution for room and board is higher than the "cost of attendance" figure, then the actual invoice amount may be treated as qualified room and board costs.

Q:
Are computers, tablets and associated costs considered qualified higher education expenses?

To be treated as Qualified Higher Education Expenses, computers, hardware, software, and internet access and related services must be used primarily by the Beneficiary while enrolled at an Eligible Educational Institution. Qualified Higher Education Expenses do not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.

Q:
How do I know which educational institutions are eligible?

Contact your school to determine if it qualifies as an eligible educational institution or use the Federal School Code Search on the Free Application for Federal Student Aid (FAFSA) website.

Q:
Is paying off a student loan considered a qualified higher education expense?

Federal tax treatment of 529 plan qualified higher education expenses or QHEEs includes the repayment of up to $10,000 (including principal and interest) on any qualified education loan of either a 529 plan designated beneficiary or a sibling of the designated beneficiary. To be a qualified expense, the loan repayment amount for an individual is subject to a lifetime limit of $10,000.

Please see the Plan Description for the state tax treatment of withdrawals used toward student loan repayment.

Q:
What is a non-qualified withdrawal?

A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to state and federal income taxation, and the 10% additional federal tax on earnings (the "Additional Tax"). See the Plan Information and Details section for more info.

Q:
Under what circumstances are taxable withdrawals not subject to the 10% additional federal tax on earnings?

A taxable withdrawal that is not subject to the 10% additional federal tax on earnings (the "Additional Tax") is a withdrawal from your Account that is: (1) paid to a beneficiary of, or the estate of, the Beneficiary on or after the beneficiary's death; (2) attributable to the permanent disability of the beneficiary; (3) made on account of the receipt by the Beneficiary of a scholarship award or veterans' or other nontaxable educational assistance (other than gifts or inheritances), but only to the extent of such scholarship or assistance; (4) made on account of the beneficiary's attendance at a military academy, but only to the extent of the costs of education attributable to such attendance; or (5) equal to the amount of the beneficiary's relevant Qualified Higher Education Expenses that are taken into account in determining the beneficiary's American Opportunity Credit or Lifetime Learning Credit.

The earnings portion of a taxable withdrawal is subject to federal income tax but not to the Additional Tax.

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