CollegeAdvantage. Ohio Tuition Trust Authority. Ohio’s 529 Savings Program. Ohio’s 529 Plan. The myriad of terms may have complicated research being done on 529 college savings plans, especially for Ohio residents. For an explanation on what these names describe, let’s start at the beginning.
Ohio Tuition Trust Authority, State Agency and State 529 Plan Administrator
For more than 25 years, Ohio Tuition Trust Authority has been helping families save for college.
In accordance with the rules established by Section 529 of the Internal Revenue Code, a 529 college saving program must be sponsored by a state, state agency, or by an eligible educational institution. Established in 1989, Ohio Tuition Trust Authority (OTTA) is the state agency which sponsors Ohio’s 529 college savings program, named CollegeAdvantage. OTTA is housed within the Ohio Department of Higher Education. Through OTTA, the state of Ohio provides three college savings programs: CollegeAdvantage Direct 529 Plan, CollegeAdvantage Advisor 529 Plan, and CollegeAdvantage Guaranteed 529 Plan, which has been closed to contributions and new enrollments since Dec. 31, 2003. As the state’s 529 college savings program sponsor, OTTA selects investment managers with which to collaborate for the CollegeAdvantage 529 plan investment options. OTTA itself manages the CollegeAdvantage Direct 529 Plan and the CollegeAdvantage Guaranteed 529 Plan. For the management of the CollegeAdvantage Advisor 529 Plan, OTTA has partnered with trusted investment industry leader, BlackRock.
Ohio’s 529 College Savings Program — CollegeAdvantage
The name of Ohio’s 529 College Savings Program is CollegeAdvantage. 529 plans help families nationwide save money for their children’s future college costs with tax-advantaged benefits, which include contributions and earnings growing tax-free in a 529 plan and withdrawals to pay qualified higher education expenses will also be tax-free. For Ohio residents with a CollegeAdvantage 529 account, they can deduct their 529 contributions from their Ohio taxable income, up to $2,000 per year, per beneficiary, with unlimited carry forward. This means that $2,000 per year is not a contribution cap. The taxpayer can continue to subtract $2,000 per year, per beneficiary, from their Ohio taxable income until all the 529 contributions have been deducted.
OTTA manages the day-to-day operations, marketing, and customer service for the CollegeAdvantage Direct 529 Plan. The Direct 529 Plan offers a variety of investment options — from ready-made, age-based or ready-made, risk-based portfolios; to individual investment vehicles to build a personalized portfolio; to FDIC-insured banking options. As OTTA is the program manager of Ohio’s Direct 529 plan, the state agency has selected to partner with leading investment managers Vanguard, Dimensional Fund Advisors, and Fifth Third Bank to provide these 529 plan investments. The Ohio Tuition Trust Authority Investment Board oversees the investments of the CollegeAdvantage Direct Plan.
CollegeAdvantage is your plan, your way. By saving regularly through automatic contributions or payroll deduction, even small amounts add up to big savings over time. Also, saving for college in Ohio’s 529 plan does not mean that those funds can only be used in Ohio. 529 plans can be used nationwide (and even overseas) at any accredited two-year, four-year, graduate or professional, or any other post-secondary schools that accepts federal financial aid. And remember, 529 accounts are an excellent alternative to student loan debt.
Interested in opening an Ohio 529 plan? Visit CollegeAdvantage online to start saving for future college expenses today. For a good overview on what is a 529 plan, visit SavingForCollege.com for a quick video.