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Virginia529 prePAID

Virginia

Virginia529 prePAID offers a variety of tuition packages to Virginia 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
3.5 4.0 5.0 4.0

General

Program type:

Prepaid contract

How to enroll:

Enroll directly with the program.

Initial year of operation:

1996

State agency(ies):

Virginia College Savings Plan

Enrollment period:

December 1, 2013 through March 31, 2014.

Eligibility

State residency requirements:

The account owner, beneficiary, or parent of a non-resident beneficiary at the time of program enrollment must be a Virginia resident or member of the U.S. military who is either stationed in Virginia or who claims Virginia as home of record .

Who can be a participant/owner in the program?

U.S. citizens and legal residents at least 18 years old, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

The beneficiary must be in the 9th grade or below at the time the contract is purchased. Contract benefits must be used within ten years after the projected date of high school graduation, unless an extension is granted.

Contractual Features

Contract prices:

In the 2013-14 enrollment, contracts are available in semester increments priced at two levels. Tier I prices range from $7,125 for a 5th to 9th grader to $7,675 for newborn - age 4/5. The Tier II price is $2,900 for newborn to 9th grade.

Available tuition packages:

Tier I prices cover a semester at a Virginia four-year university/college or 2 2/3 semester at a Virginia two-year/community college. The less expensive Tier II contract covers a partial semester at a four-year Virginia university/college or a semester at a two-year/community college.

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

Private Institutions: The contract will pay the lesser of 1) payments made on the contract plus the actual rate of return earned on the invested funds, compounded annually or 2) the highest in-state undergraduate tuition at a Virginia public institutions in the same semester the benefits are used.

Out-of-State Instituions: The contract will pay the lesser of 1) payments made on the contract plus interest at a reasonable rate of return based on institutional money market rates, or 2) the average in-state undergraduate tuition at Virginia public institutions for the same academic semester the benefits are used.

Contract payment options:

Lump sum, initial down payment and installment payments for the balance, or installment payments only. Lump-sum and first monthly payments are due by May 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, state legislation currently provides a financial guarantee in each year's state budget to cover VPEP's contractual obligations in the event of a funding shortfall. This provision can only be changed by the Virginia General Assembly, subject to the Governorís veto, and the General Assemblyís ability to override a veto.

Fees & Expenses

Enrollment or application fee:

$25 non-refundable application fee.

Taxes and other Benefits

Program match on contributions:

Premium subscription required for this data.

State tax deduction or credit for contributions:

Contributions to a Virginia 529 plan of up to $4,000 per account per year are deductible in computing Virginia taxable income, with an unlimited carryforward of excess contributions. Contributions are fully deductible in the year of contribution for taxpayers at least 70 years of age. Contributions from a non-owner are deductible by the account owner and not by the non-owner/contributor. Contribution deadline is receipt (not postmark date) by the last business day of the year based on agency calendar.

State tax recapture provisions:

The principal portion of rollovers and nonqualified withdrawals from this plan are included in Virginia taxable income to the extent of prior Virginia tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability or withdrawals made on account of the beneficiary's receipt of a scholarship.

State tax treatment of qualified distributions:

Qualified distributions from Virginia and non-Virginia 529 plans are exempt. Virginia also exempts distributions from a Virginia 529 plan attributable to the beneficiary's death, disability, or receipt of a scholarship.

State tax treatment of rollovers:

Virginia follows federal tax-free treatment except that outbound rollovers are subject to the recapture of prior state tax deductions.

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

Yes

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:

Premium subscription required for this data.

Distributions & Terminations

To whom are distributions made payable:

Eligible educational institution.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer contract ownership ($10 fee unless account owner has died or became disabled).

Contact

Web site:

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Telephone:

1-888-567-0540

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