Does Georgia Have a 529 Plan for College Savings?
Navigate Georgia's 529 plans for college savings. Understand their benefits and how to effectively manage your education funding journey.
Georgia offers state-sponsored college savings programs, known as 529 plans. Administered by the Georgia Office of the State Treasurer, these plans help families save for future education expenses.
Understanding Georgia’s 529 Plans
Georgia’s primary college savings vehicle is the Path2College 529 Plan. This program operates as a college savings plan, with contributions invested in various portfolios. While some states offer prepaid tuition plans that lock in future tuition rates, the Path2College 529 Plan is a savings-based model.
These accounts can be opened by a wide range of individuals, including parents, grandparents, other relatives, or friends. An adult saving for their own education can also establish an account. The beneficiary can be anyone with a valid Social Security Number or Taxpayer Identification Number, and does not need to be related to the account owner. Funds are not restricted to Georgia institutions and can be used at any accredited college, university, vocational school, or eligible educational institution across the United States and some abroad.
Key Financial Aspects and Usage
The Path2College 529 Plan offers tax advantages at both federal and state levels. Federally, investment earnings grow tax-deferred, and withdrawals for qualified education expenses are entirely free from federal income tax.
For Georgia residents, contributions to the Path2College 529 Plan provide a state income tax deduction. Single filers can deduct up to $4,000 per beneficiary per year, while married couples filing jointly can deduct up to $8,000 per beneficiary per year from their Georgia adjusted gross income. Investment earnings within the plan are 100% exempt from Georgia state income taxes when used for qualified education expenses.
Qualified education expenses are broadly defined by the IRS and include tuition and fees. They also encompass room and board costs, provided the student is enrolled at least half-time. Other eligible expenses include books, supplies, and equipment, such as computers.
Beyond traditional higher education, up to $10,000 per year per student can be used for K-12 tuition expenses. Funds can also cover fees, books, supplies, and equipment for registered apprenticeship programs, and up to a lifetime limit of $10,000 for student loan repayment.
The Path2College 529 Plan accepts contributions until the total account balance for a single beneficiary reaches $235,000. There is no minimum amount required to open an account, though contributions begin at $25. The plan has no sales charges, startup, or maintenance fees, and an annual asset-based management fee less than one percent.
Opening and Managing an Account
Establishing a Path2College 529 Plan account is primarily completed online through the official plan website. To open an account, applicants provide personal details for both the account owner and the designated beneficiary, including full names, dates of birth, and Social Security Numbers or Taxpayer Identification Numbers. Banking information, such as routing and account numbers, is also necessary to facilitate contributions.
During the setup, account owners select investment options for their contributions. The Path2College 529 Plan offers various choices, including age-based portfolios that automatically adjust their asset allocation as the beneficiary approaches college age, static portfolios with a fixed investment strategy, and principal plus interest options.
Contributions can be made through one-time electronic transfers, recurring automatic deductions, or payroll deductions. Friends and family members can also contribute directly through gifting platforms. Account owners can adjust investment allocations a limited number of times per year and update beneficiary information. Funds from other state 529 plans or Coverdell Education Savings Accounts can be rolled over into a Path2College 529 Plan.