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The Georgia Path2College 529 Plan

Jul 12, 2012

The Path2College 529 plan is an education savings plan run by the State of Georgia It is designed to help families save money for college costs. The tax advantages of the plan include the earnings portion of any distributions used to pay for a qualified higher education expenses are free from federal and Georgia income tax.

All Georgia taxpayers can now contribute and deduct up to $2,000 each year for any beneficiary. There are federal estate benefits to the plan as well. Contributions to the plan may reduce the taxable value of the taxpayer’s estate. Contributions may qualify for an annual gift tax exclusion of $13,000 per donor, per beneficiary.

The Path2College plan is easy to start, any citizen over 18 can open an account and contribute to the Path2College plan on behalf of the beneficiary. The funds in the account can be used at nearly all higher education institutions (public or private) in the nation and many institutions abroad. Additionally, the funds are not limited to tuition expenses; the funds can be used for books, supplies, and some room and board costs.

The plan offers seven investment options so students can pick a combination of options that's best for them. The plan offers small minimum contributions so the plan is not too hard for families on a budget. The accounts do have a maximum contribution level of $235,000; however, the account can continue to accrue earnings after it has reached the maximum.

An annual asset-based management fee is required to cover the cost of investment management and administrative services. The fee is computed at an annual rate of 0.29%-0.40% of average daily net assets of the account excluding assets held in the Guaranteed Option.


Got further questions? Catch me on twitter and DM me @529SavingsPlans or e-mail me at 529CollegePlans at Gmail.com. Want to be heard? Leave a reader comment below.

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