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College Savings Plans of Maryland -- Prepaid College Trust

Maryland

The College Savings Plans of Maryland -- Prepaid College Trust offers a variety of tuition packages to Maryland and District of Columbia families.

5-Cap Rating

Resident:
Non-Resident:

Savingforcollege.com's 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories. (Scale 0 to 5; 5 is highest)

Financial benefits Safety Features Reliability
4.0 3.5 3.5 3.0

General

Program type:

Prepaid contract

How to enroll:

Enroll directly with the program.

Initial year of operation:

1998

State agency(ies):

College Savings Plans of Maryland

Enrollment period:

December 1, 2013 through April 7, 2014. Year round for newborns.

Eligibility

State residency requirements:

The account holder or beneficiary must be a Maryland or District of Columbia resident at the time of program enrollment.

Who can be a participant/owner in the program?

U.S. citizens and resident aliens, UGMA/UTMA custodians, and legal entities organized in the U.S.

Significant time or age restrictions imposed by the program:

Beneficiaries must be in the 12th grade or younger at the time of program enrollment and must be enrolled for at least 3 years before they are eligible to receive tuition benefits. Benefits must start to be used within 10 years after the beneficiary's projected date of high school graduation, not including years spent in the U.S. military.

Contractual Features

Contract prices:

Prices for contracts purchased during the 2013-14 enrollment period range from as little as $4,331 for a one-year community college contract for a newborn to as much as $54,653 for a five-year university contract for a child in the ninth through twelfth grades.

Available tuition packages:

One semester to five years at a Maryland public 4-year university, one or two years at a Maryland community college or a community/university combination (2 years of each).

Benefits for beneficiary attending private or out-of-state institution:

The plan will pay the actual tuition up to either the weighted average tuition in the Prepaid College Trust plan purchased or the minimum benefit, whichever is greater. If the beneficiary receives a scholarship, grant, or tuition remission, the plan will pay any remaining tuition up to the scheduled benefit.

Contract payment options:

Lump sum, annual, monthly, and extended monthly installments with a downpayment option. The first payment for contracts purchased during the 2013-14 enrollment is due August 1, 2014.

Are program benefits backed by the full faith and credit of the state?

No

Are program benefits collateralized or guaranteed in any other way?

Yes, the legislature is required to consider, but not necessarily approve, an appropriation to cover any shortfall, repayable within two years.

Fees & Expenses

Enrollment or application fee:

$75 paper application or $50 with online application, reduced to $20 when purchasing additional years of tuition for the same beneficiary or enrolling a beneficiary with an account in the Maryland College Investment Plan.

Taxes and other Benefits

Program match on contributions:

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State tax deduction or credit for contributions:

Contributions to the Maryland Prepaid College Trust of up to $2,500 per account per year are deductible in computing Maryland taxable income, with an unlimited carryforward of excess contributions. Only contributions made by the account owner are deductible. Rollover contributions are deductible if not previously deducted. Contribution deadline is December 31 postmark.

State tax recapture provisions:

The principal portion of nonqualified withdrawals from this plan are included in Maryland taxable income to the extent of prior Maryland tax deductions. Rollovers are not subject to recapture.

State tax treatment of qualified distributions:

Qualified distributions from Maryland and non-Maryland 529 plans are exempt.

State tax treatment of rollovers:

Maryland follows federal tax-free treatment.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

No

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

No

Does the program have a formal agreement with a rewards program or outside scholarship program?

No

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Eligible educational institution or account owner, as directed by the account owner.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer contract ownership ($10 fee).

Contact

Web site:

Click here to visit

Telephone:

1-888-463-4723