I live in NC but both sets of grandparents live in VA and we are looking at whether it makes sense to start a state specifclic 529. Currently we have the nevada one (lived in tx when we started it and there is no state specific benefit so everyone picks nevada for low fees).
Virginia has one of the only "prepay" style 529s and it would be cool to be able to get the kids to go there, but out of state tuition is insane.
If a grandparent who is a resident of VA started the VA 529 that purchases blocks of VT tuition would that work even if the student comes from a different state?
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As I understand it, yes 529 funds can be applied to out-of-state tuition within the VA system.
But what if you prepay in-state tuition? Are you covered?
You have to meet the residency requirements. You can't "force" in-state tuition without proving residency in-state. If you don't live in state, they won't honor that rate, but will allow application towards out-of-state.
Ok - this is the heart of my question... if the contribution comes from a VA resident and does the prepaid tuition option would the student need to separately confirm they are an in state student at time of enrollment.
As part of enrollment you'll need to go thru the residency part of the process. You can add money based on the in-state guidelines, but without being an actual in-state resident, it won't be applied as in-state. But it will be applied to a portion of the out of state tuition.
You save $5 for the suggested in-state level. When it comes time to enroll, out-of-state is $11. That $5 (plus growth) will be applied towards the $11. You won't get the $5 rate because unless you move to VA, you won't qualify for in-state. If it was that easy, people would have 529's in all sorts of states to game the system. There's no way around in-state requirements.
If they can confirm and meet all requirements for in-state (and it's like filing taxes for a few years, having a license in that state, etc...) then yes, the $5 would be applied toward the $5 cost. But it sounds like you'd have to move now in order to cover those bases...
Thanks for the clarification - even if it isnt the result I was hoping! We have 10+ years until our oldest is going to college but unless something changes it is very unlikely we speing for VT out of state ... Even though my wife and I are both alums
Assuming the children are dependent then the state of affiliation goes to the parents/guardians of those children. In other words, the people who are claiming them on their tax return and also providing financial support for them. In-state tuition requires one year of documented residency and you need to apply and go through the process. It takes a couple months and a lot of paperwork. Just did it.
May want to look into declaring residency for your kids with the grandparents so then they would move to in state tuition. Not sure all the steps on that but knew a couple guys back in my time that did that.
I should have done that. Of course, in-state tuition is now higher than my out-of-state tuition was so...
I'm sure it's changed but in my day grandparents in VA did not help at all. There were so many things to do that it became impossible in 4 years for me to do.
Look at the Utah plan, it has the best options for investments and lower fees
Yup, I live in UT, and by far it's one of the most flexible options for 529, I'd look into it! (Granted I'm not sure you can obtain a UT based plan without being a resident here)
Don't need to be a resident, I live in NC
My wife and I got 2 plans as we could not decide which to settle on. One of them was Utah as it seemed to be one of the best in terms of options and fees. The other was Iowa.
I knew a guy my freshman year who wanted to do Mechanical Engineering but he opted for Ocean and Aerospace Engineering (close 'nuff, right?) because he was from Tennessee and Tennessee didn't have any Ocean Engineering programs and he used this loophole that VT would allow him to pay in-state tuition for a degree track that wasn't offered in his own state (the caveat being that his state had to border Virginia). So Tennessee guy got in-state tuition to study Ocean and Aerospace Engineering instead of paying more than double for the almost equivalent Mechanical Engineering he originally intended on.
So, if you can find a program that your kid is interested in that you can't get in North Carolina (which, doubtful, tbh) then that is a possible route to go
I also live in NC with both sets of grandparents residing in Virginia. We have a 529 set up for our kiddo (turns 4 in a month) but I can't remember which state we filed it with. Regardless, I'm just planning on winning the lottery sometime between now and when he goes to college to afford it :p. To that end, I spend about $500 a month on lottery tickets. Why save it when I can invest it? /s
I did the same thing, but I'm from Maryland. You can complete the coursework for Aero + ocean in 4 years, and although I was a 3 credits shy of two degrees, you can get your degree in your primary major (it was aero for me) and still get in state tuition because of your secondary major.
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Does he have a VA 529? Does it help with recruiting if he does? Haha
Thanks...Monday Quality Control ✅️
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Say, seeing this topic, I have to ask, if you do the prepay part, doesn't the student have to attend school in Virginia? One of the reasons we chose not to do a prepay is that we did not know where she would want to go. There has to be some rule to allow you to get the money to use in another state, but we did not feel like trying to figure that out and just went with normally invested 529s. Do people knew how that worked if you prepay for State A and then you child wants to go in State B? Other than telling her, tough shit, you are going to State!
Our daughter is 17 now, so we're definitely not changing anything at this point. Just a curiosity of mine.