VHEIP Reduces Fees on 529 College Savings Plan
Governor says Vermonters benefit from tax credit and lower fees
WINOOSKI (January 29, 2014) – Governor Peter Shumlin joined the Vermont Student Assistance Corp. today to announce new, lower program management fees for the state’s 529 college savings plan, potentially saving more than $100,000 annually for account holders.
(Watch the news conference here.)
“Vermont has one of the most competitive and well-run 529 plans for its size, including strong performance on the investments and the some of the lowest management fee among our peers,” Shumlin said. “Thousands of Vermonters have made long-term, prudent investments for the educational future of loved ones and the state has encouraged millions in these savings with the tax credit – an added incentive to make higher education more affordable.”
Since it started in 1999, VHEIP has grown to 14,000 accounts with more than $225 million in assets, qualifying it for a reduction in program fees of 5 basis points.
To date, 3,470 students have used more than $78 million from VHEIP accounts to pay for education or training after high school.
“Our goal is to provide families with a college savings plan that is affordable, accessible and flexible,” said Scott Giles, VSAC president and CEO. “It is encouraging to see so many students using VHEIP funds to attend colleges and universities, both in Vermont and across the country.”
Nearly all states offer tax advantages of some type for 529 college savings plan, but Vermont provides a nonrefundable tax credit of 10 percent of the first $2,500 contributed per beneficiary, per year, State Treasurer Beth Pearce said. In 2012, $36 million was invested into VHEIP with about $1.8 million realized in tax credits.
“I am pleased that these reduced fees will assist families as they save for college,” Pearce said. “We know that when Vermonters make smart money decisions, everyone benefits. It is gratifying to see that a growing number of Vermonters are taking advantage of the added benefit of VHEIP accounts so they have adequate savings to pursue higher education. This is proof that the plan is being used as it was designed.”
VHEIP accounts can be started with as little as $25, making them affordable to most Vermonters. VHEIP’s website, www.vheip.org, provides comprehensive account and program information, and includes online enrollment, e-gifting instructions and other services. Information and applications can also be obtained by calling (800) 637-5860.
The VHEIP 529 college savings plan was established in 1999 and is the only Vermont state-sponsored 529 plan. VHEIP is administered by the Vermont Student Assistance Corp. and managed by TIAA-CREF Tuition Financing Inc. For more information about VHEIP, visit www.vheip.org or call the customer service center at (800) 637-5860.
Vermont Student Assistance Corporation is a public, nonprofit corporation created by the Vermont Legislature in 1965 to help Vermonters plan and pay for education or training beyond high school. VSAC administers Vermont’s 529 college savings plan; outreach services to encourage low-income students to aspire to and complete college; college and career planning services for all Vermonters; need-based state grants for full-time, part-time and non-degree study; public and private scholarship programs; and private education loans. Find us at www.vsac.org or on Facebook at https://www.facebook.com/VermontStudentAssistanceCorporation.