Collegeboundfund 529 plan is not a pre-taxed benefit hence you may enroll at any time.
College savings plans provide tax-advantages that assist employees in saving for future college education costs through payroll deduction contributions. To obtain information regarding the college savings plan available for state employees, CollegeBoundFund, call 877-517-4829 or visit their website at CollegeBound Saver
The Collegeboundfund is a 529 plan (higher education savings program providing tax-exempt benefits), and is managed by Alliance Capital, and monitored by Rhode Island Office of Higher Education, and the General Treasurer’s Office.
With college costs skyrocketing, families need to save early for their children’s higher education. Collegeboundfund offers families a powerful, yet simple way to save and invest for a child’s college education. A way to help your child avoid massive college loans upon graduation.
The Participant (employee) remains in control of this account. This program not only lets employees save for their own children’s college education, but also for themselves, grandchildren, etc. Even non-related individuals.
Please visit the Collegeboundfund web site or call them at 1-888-324-5057 for more information.
Use your CollegeBoundfund savings for:
- Room and Board
- Any required school expense, such as a computer
- Tax-free earnings growth
- Tax-free withdrawals (exempt from Federal and RI taxes on earnings)
- No income limits
- No age limit of the beneficiary
- Lowe minimum investment
- High contribution limit ($301,500 maximum contribution per account)
- Ability to change beneficiary
- Acceptance to all accredited colleges, universities, vocation, and trade schools across the country
- 15 options for investing
Who can you select as a beneficiary?
- Anyone. Your child, grandchild, cousin, yourself, even someone not related to you.
What happens if my beneficiary does not want to use this savings for education?
- You can leave the money in the account for use in the future – either by your beneficiary if he or she eventually decides to pursue a higher degree.
- You can change your beneficiary to someone who is a family member of the former beneficiary, such as the former beneficiary’s child.
- You can make a non-qualified withdrawal, subject to regular income taxes plus a federally mandated 10% penalty or additional tax on the earnings. (Withdrawals may be subject to a deferred sales charge.)
What if my beneficiary receives a scholarship?
There are a number of options:
- You can use Collegeboundfund to pay for education expenses that aren’t covered by the scholarship
- You can leave the funds in the account for use at a future date (such as for an advanced degree)
- You can change the beneficiary to a family member of the original beneficiary.
You may also withdraw from your account the amount of the scholarship without penalty. Withdrawals in this circumstance will be taxable to the participant at the participant’s tax rate.
If you make a withdrawal above the scholarship amount and don’t use it for qualified higher education expenses* it will be subject to tax at your tax rate, plus an additional 10% IRS penalty or additional tax on the earnings.
*Qualified education expenses include tuition, fees, room and board, books and other supplies required for the attendance of a student at an institution of higher education. A 10% penalty or additional tax on the earnings withdrawn for non-qualified expenses will apply. Call Collegeboundfund for more specific information.
Ways to Participate:
- A $250 deposit will open an account
- An amount, as little as $1, can be automatically put into the fund twice a month through your bank account.
- An amount, as little as $1, can be payroll deducted each pay period