SACRAMENTO, Calif.--(BUSINESS WIRE)--As we celebrate Grandparents Day this Sunday, September 8, families are reminded of the invaluable role that grandparents can play in supporting and shaping their grandchildren’s future. This year, ScholarShare 529 invites grandparents to extend that support to their grandchild’s education by opening a ScholarShare 529 account and providing a powerful gift that will benefit them for years to come.
ScholarShare 529 is California’s official tax-advantaged college savings plan, designed to help families save for higher education expenses in a flexible and tax-efficient manner. By opening a ScholarShare 529 account, grandparents can contribute regularly to a child’s educational journey, easing potential financial burdens and supporting their academic achievements.
Recent Free Application for Federal Student Aid (FAFSA) rules have made opening a ScholarShare 529 account even better. Starting with the 2024-2025 school year, distributions from grandparent-owned 529 plans are no longer reported as student income and not considered when calculating a family’s expected contribution. This means that withdrawals from a ScholarShare 529 account owned by grandparents won’t negatively impact the student’s federal financial aid eligibility and broadens the base of support for the student’s future.
“Opening a 529 account provides an opportunity for grandparents to not only give but to receive as well,” says Patricia Roberts, Chief Operating Officer at Gift of College, Inc., and author of Route 529: A Parent’s Guide to Saving for College and Career Training with 529 Plans. “In addition to receiving the valuable tax benefits associated with these accounts, grandparents receive the benefit of a meaningful connection to their grandchild’s academic and career dreams, whatever they may be.”
Why Else Should You Choose ScholarShare 529?
- Tax Benefits: Contributions to a ScholarShare 529 account grow tax-free, and withdrawals for qualified educational expenses are also tax-free.
- Easy to Set Up: Opening an account is simple and can be done online in less than 15 minutes. You can start with as little as $1, set up a contribution schedule or simply contribute when you want to, and there are no annual fees.
- Control and Flexibility: Account holders retain control over the account and can change beneficiaries if needed. Grandparents who don’t want to open an account themselves, can contribute to parent or student-owned ScholarShare 529 accounts easily with Ugift.
To open a ScholarShare 529 account, visit ScholarShare529.com/open. For a helpful step-by-step video on how to get started, click here. In just a few minutes, you’ll be on your way to setting up a ScholarShare 529 account and providing a valuable gift for your grandchild’s educational journey.
About ScholarShare 529: ScholarShare 529 serves as California’s official college savings plan. Administered by the ScholarShare Investment Board, ScholarShare 529 provides families with a valuable tool that offers a diverse set of investment options, tax-deferred growth, and withdrawals free from state and federal taxes when used for qualified higher education expenses, such as tuition and fees, books, certain room and board costs, computer equipment, and other required supplies. ScholarShare 529 manages $16 billion in plan assets across more than 442,000 ScholarShare 529 accounts as of 8/31/2024. To open a ScholarShare 529 account or get more information about the plan, visit www.ScholarShare529.com. For information about the ScholarShare Investment Board, visit www.treasurer.ca.gov/scholarshare, like ScholarShare 529 on Facebook at www.facebook.com/scholarshare529, and follow them on X at @ScholarShare529. For more information about ScholarShare 529, visit www.ScholarShare529.com.
To learn more about California's ScholarShare 529, its investment objectives, risks, charges and expenses see the Plan Description at ScholarShare529.com. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, is the distributor and underwriter for ScholarShare 529. Prior to investing, check with your home state to learn if it offers tax or other benefits such as financial aid, scholarship funds or protection from creditors for investing in its own 529 plan. If the funds aren't used for qualified higher education expenses, a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Non-qualified withdrawals may also be subject to an additional 2.5% California tax on earnings.
