The Florida Prepaid College Board recently announced significant enhancements to the Florida 529 Savings Plan, a savings and investment plan that allows Florida families to save at their own pace for college and K-12 education expenses. 

 What’s new?

  • Reduced fees on all investment options, some by more than 70 percent
  • Expanded investment options, including four new static portfolios
  • Addition of well-known investment managers such as Vanguard, Dimensional Fund Advisors, and Eaton Vance
  • Enhanced investment allocations within the static and age-based funds
  • Redesigned website and savings tools to help participants meet their college savings goals

Investments in the Florida 529 Savings Plan grow on a tax-deferred basis and can be withdrawn completely tax-free when used to pay for qualified education expenses, including college tuition, fees, room and board costs, and up to $10,000 per year in K-12 tuition. 

Given the significant fee reductions, the Florida 529 Savings Plan is now offered exclusively to Florida residents. The plan will accept rollovers from residents who want to transfer funds from another 529 plan. Families who currently live out-of-state and already have a Florida 529 Savings Plan will be able to remain in the program and enjoy all the new benefits.

There are 80,000 Florida 529 Savings Plan accounts with $675 million in assets under management (AUM). 

Competitive fees

The lower a 529 savings plan’s fees are, the more a participant is able to save for college. In recent years, competition among 529 plan managers has been driving down 529 plan fees and expenses. The Florida 529 Savings Plan has dramatically reduced its fees, with the lowest being the Vanguard Domestic Equity Index Fund coming in with an annual fee of just 0.02% (2 bps). For example, if $10,000 is invested in this fund, the fee would be just $2 per year. All of the fund options, fees and allocations can be viewed at myfloridaprepaid.com.

New investment offerings

The Florida 529 Savings Plan now features funds from Vanguard, Dimensional Fund Advisors and Eaton Vance. These funds historically outperform, provide forward-looking investment strategies, and each received a Bronze, Silver or Gold medal rating from Morningstar.

Changes to the Plan’s investment lineup will better support do-it-yourself investors and families wanting a simplified investment approach with an age-based portfolio. 

About the Florida Prepaid College Board

The Florida Prepaid College Board manages the Stanley G. Tate Florida Prepaid College Program and the Florida 529 Savings Plan. Both are tax-favored 529 college savings plans authorized by Section 529 of the Internal Revenue Code. The first Florida Prepaid College Plans were sold in 1988, and were augmented with the addition of the Florida 529 Savings Plan in 2002.

Florida Prepaid is the largest, longest running and most successful prepaid plan in the nation with more than 800,000 active accounts and more than $15.7 billion in assets under management. The Florida 529 Savings Plan has more than doubled its number of accounts in the last five years and now has 80,000 active accounts with a market value of more than $675 million.