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CollegeAmerica

Virginia's CollegeAmerica is an advisor-sold 529 plan that makes available a line-up target date fund portfolios, multi-fund portfolios, individual fund portfolios from American Funds through Class 529-A, 529-C, 529-E and 529-F-1 shares. To find a financial advisor in your area, use the Directory of Financial Professionals.

Our Ratingx

5 of 5

Fee Scorex

4 of 5

Performancex

4.5 of 5

  • Program typeSavings
  • Inception2002
  • State agency
    Virginia529
  • Tax deduction
    Tax deduction for single filers $4,000/yr
    Tax deduction for joint filers $4,000/yr
  • Program Manager
    American Funds Service Company, American Funds Distributors, and Capital Research and Management Company
  • Program distributor
    American Funds Distributors
  • Manager contract termUNLOCK PRO

Ratings & Rankings

Our overall rating for VA residents

This is a program that offers outstanding flexibility, attractive investments, and additional economic benefits (such as generous state tax incentives) that for some people, at least, will provide a substantial boost to their savings. There are few, if any, weaknesses noted in the program.

Our overall rating for non-residents

This is an excellent program with many benefits for the participant and positive investment attributes. If it has any significant weaknesses then it also has some particularly good things to recommend it.

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.


4.03of 5
top-ten

Each plan's performance score is developed directly from Savingforcollege.com's Quarterly 529 Performance Rankings. A 529 savings plan must have at least one year of performance history before they will be assigned a 5-cap rating. For those plans that are not part of our quarterly performance rankings, such as plans offering a single set of bank-based investment options, we assign a performance score by evaluating the returns currently available on similar types of investments outside of 529 plans.

Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

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

Significant time or age restrictions imposed by the program:

The account must be used within 30 years after the beneficiary graduates from high school or within 30 years after opening the account, whichever is later.

Contributions

Maximum contributions:

Accepts contributions until all account balances in Virginia's 529 plans for the same beneficiary reach $500,000.

Minimum contributions:

The minimum initial contribution is $250 per fund ($1,000 for U.S. Government Money Market Fund), and the minimum subsequent contribution is $50 per fund. For an employer-sponsored program, the minimum contributions are $25 per fund.

Investment Options

Age-based investment options:

The Target-Based Portfolios contain 7 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the number of years to expected enrollment based on the age of the beneficiary or as selected by the account owner. As each fund approaches its target date, it will increasingly emphasize income and preservation of capital by investing a greater portion of its assets in bond, equity-income and balanced funds, eventually investing principally in fixed-income funds and merging into the College Enrollment portfolio.View more age-based investment options

Static investment options:

Select among various multi-fund objective based portfolios, U.S. Government Money Market or individual mutual funds from American Funds.View more static investment options

Underlying investments:

American Funds mutual funds.View a full list of this plan's investment options

Underlying fund allocations:

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Portfolio Fees & Performance Lookup

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Fees & Expenses

Enrollment or application fee:

None, but contributions may be subject to a sales charge depending on share class.

Account maintenance fee:

None.

Program management fees:

None (State administrative effective rate* of 0.07% is included in the underlying fund expenses.
*Calculation is based on the breakpoint schedule per the program description.)

Expenses of the underlying investments:

Ranges from 0.48% to 1.39% for Class 529-A, 0.48% to 2.13% for Class 529-C, 0.47% to 1.55% for Class 529-E, and 0.41% to 1.12% for Class 529-F-1.

Total asset-based expense ratio:

Class 529-A: 0.48% - 1.39%
Class 529-C: 0.48% - 2.13%
Class 529-E: 0.47% - 1.55%
Class 529-F-1: 0.41% - 1.12%

Broker loads and commissions:

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Breakpoint pricing:

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Does breakpoint pricing include non-529 assets under rights of accumulation policies

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Taxes and other Benefits

  • Tax deduction for single filers$4,000/yr
  • Tax deduction for joint filers$4,000/yr

Example

Married filing jointly residents contributing $100/month can expect an additional $0 a year in tax savings.

Program match on contributions:

None.

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 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 definition of qualified expenses

The state conforms with the federal definition of qualified education expenses, which includes expenses for higher education, as well as up to $10,000 per year in tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.

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?

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?

Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Upromise Helps Families Save for College

Upromise Helps Families Save for College

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Account owner, beneficiary, or eligible educational institution

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

No

Documents and other services accessible or downloadable on the program's public Web site:

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Contact

Website:

https://www.americanfunds.com/college/collegeamerica.html

Telephone:

1-800-421-4225

Twitter

CollegeAmerica

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