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Facts About Kansas' 529 Plans

By    |   Wednesday, 20 May 2015 11:37 AM

Saving for college can be a daunting task in today's economy with the escalating costs of higher education, but Kansas has ways to help with its three 529 programs. All Kansas savings plans can be linked to the Upromise rewards service, which has options that direct deposit benefits to plans when used per guidelines, according to Savingforcollege.com.

The 529 tax-advantaged savings plans, authorized by the Internal Revenue Service, are legally known as "qualified tuition plans," and are sponsored by states, state agencies or educational institutions. They may differ from one state to the next on what they offer and entail.

Additionally, 529 plans come in two forms: prepaid tuition plans and college savings plans. Every state and the District of Columbia sponsor at least one type of 529 plan, as do private colleges and universities.

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Here are some facts about Kansas' 529 plans to consider:

1. Kansas has three 529 plans to choose from: Learning Quest 529 Education Savings Program, the Schwab 529 College Savings Plan and the Learning Quest Advisor plan. All Kansas 529 plans are managed by American Century Investments.

2. The highest-rated plan, according to Savingforcollege.com, is the Learning Quest 529 Education Savings Program. It features no state residency requirements to open or own a plan. Participants must be United States citizens, resident aliens, custodians or legal entities. There are no age restrictions. Contribution cap is set at $345,000. Accounts can be opened with a lump sum contribution or monthly automatic minimum investments of $25.

3. In addition for the Learning Quest 529 Education Savings Program
, there are three age-based risk levels with multiple portfolio choices. There are 14 static investment options from which to choose and there are no enrollment, application or maintenance fees. However, there is a management fee of .20 percent that is waived for Money Market portfolios.

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4. Dollar-for-dollar matching for the Learning Quest 529 Education Savings Program is for contributions above $100 and up to $600 annually by Kansas residents with household incomes below 200 percent of the federal poverty income level, but is limited to 300 participants from each of Kansas' four Congressional districts per year. Contributions to in-state and out-of-state sponsored 529 plans of up to $3,000 per beneficiary per year by a lone contributor, and up to $6,000 per beneficiary per year by a married couple filing jointly, are Kansas income-tax deductible. Rollover contributions are not deductible.

5. The Schwab 529 College Savings Plan differs
from the Learning Quest 529 Education Savings Program. For example, initial contribution can be lump sum or $25, with an automatic investment plan of $25 per month. An indexed age-based and static age-based option are offered at four risk levels. There are 13 static investment options with six multi-fund portfolios with different degrees of risk tolerance. Finally, there is no matching money from the state.

6. Kansas' third 529 plan, the Learning Quest Advisor plan, offers a multi-manager, age-based portfolio and static portfolio in addition to a menu of individual funds. It also offers matching dollar contributions from the state with the same caveats as the first plan.

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Saving for college can be a daunting task in today's economy with the escalating costs of higher education, but Kansas has ways to help with its three 529 programs.
529 plan, facts, kansas
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2015-37-20
Wednesday, 20 May 2015 11:37 AM
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