A new DC 529 Plan will be coming in 2017.
The new DC 529 Plan provider, Ascensus, will hopefully eliminate the high-cost elements in the existing plan.
529 plans are a great way to save for college. Nearly all states have 529 plans. A 529 plan allows your contributions to grow tax free. You don’t pay federal and state taxes if you withdraw money to pay for qualified college expenses. Qualified expenses include tuition, room and board, and books.
State residents receive a state tax deduction for contributions to their state plan. In DC, the tax deduction is $4,000 for an account owner per year (or $8,000 for a married couple that own two accounts).
The DC Government will release details on the transition timetable, new fund offerings, and administrative fees in the next few months. I’ll then offer suggestions on how you can best use the new DC 529 Plan.