Ohio Ag Connection - Ohio's 529 Recognized by Industry Leaders as One of the Best in U.S.

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Ohio's 529 Recognized by Industry Leaders as One of the Best in U.S.
Ohio Ag Connection - 11/23/2020

The Ohio Direct 529 Plan, CollegeAdvantage, is the only 529 college savings plan in the country to receive top honors from both Morningstar and Savingforcollege.com. This year, CollegeAdvantage received again a "Silver" Rating as well as a "Positive" ranking in all four pillars, from Morningstar and a Five-Cap rating from Saving For College.

Each year, 529 plans from all over the country are reviewed and analyzed by Morningstar, the most trusted financial industry investment research company, which then issues a national report based on their findings.

According to this October report, the CollegeAdvantage Direct 529 Plan maintained its "Silver" Rating and the BlackRock CollegeAdvantage 529, the Ohio Advisor plan, retained its "Bronze" ranking. Ohio is one of only four states that have both their Direct and Advisor 529 plans ranked as medal-class college savings programs by Morningstar.

The plans are rated based on the quality of the portfolio of investments options, skill of the options' managers, stewardship practices of the 529 plan's program manager, and costs associates with the plan.

In addition, Savingforcollege.com, the leading source for unbiased information on saving and paying for college, recognizes Ohio's Direct 529 Plan as one of the best 529 plans in the country. Savingforcollege.com provides analysis of 529 plans on a quarterly basis and plans are ranked according to investment performance in one-, three-, five-, and ten-year categories. According to its recent report, Ohio's Direct 529 Plan is ranked first in the nation in the five- and ten-year categories.

Savingforcollege.com also uses a 5-Cap rating system that declares Ohio's Direct 529 Plan as one of the best plans in the nation for both Ohioans and non-Ohioans. The Ohio Direct Plan is one of only two direct sold plans with the 5-Cap distinction. The BlackRock CollegeAdvantage plan is also well regarded, receiving 5-Caps for Ohioans and 4.5-Caps for non-Ohioans, one of only four plans to receive the highest ranking for advisor sold plans.

"We strive to offer the very best college savings plans in the country," said Tim Gorrell, Executive Director for Ohio's 529 Savings Program. "We take pride in having some of the lowest fees in the country as well as offering a variety of investment options. With everything that's going on in our country, it's important for us to offer a plan that is a solid value for Ohioans," Gorrell said.

2020 has been a challenging year but Ohio's 529 Plan continues to reach milestones. Earlier this year, CollegeAdvantage topped $13.5 billion in Assets Under Management. Families realize the importance of planning and saving amid tough times. According to a recent survey from SavingForCollege.com, college savers are staying the course when it comes to their 529 accounts. The survey found that 67% of 529 account owners have made no changes to their contributions and another 15% actually have increased their contributions.

Funds in CollegeAdvantage may be used for all types of qualified higher education expenses, whether for a typical four-year college or university, two-year community college, technical or trade school, an apprenticeship, or a certificate program. If the postsecondary school your child elects to attend accepts federal financial aid, then Ohio's 529 Plan can be used there.

Ohio's 529 Plan helps families in Ohio and across the country save money for their children's future higher education or training with significant tax-advantaged benefits. All contributions and earnings grow tax free, and withdrawals from CollegeAdvantage are tax free when used to pay qualified higher education expenses. These qualified costs include tuition, fees, room and board, books, and computers. This year, certain apprenticeship programs costs and up to $10,000 student loan repayments have been added as qualified expenses. As always, funds in Ohio's 529 Plan can be used at any college in the country that accepts federal financial aid.

Ohio residents who contributes to an Ohio 529 Plan can deduct their 529 contributions from their Ohio taxable income, up to $4,000 per year, per beneficiary, with unlimited carry forward. While $4,000 per year, per beneficiary, is the maximum state tax deduction amount, it is not the maximum contribution amount. With unlimited carry forward, an Ohio taxpayer will continue to subtract $4,000 per year, per beneficiary, from their State of Ohio taxable income until all the 529 contributions are deducted. All contributions must be received in good order before 4 p.m. Thursday, Dec. 31, to be included in the 2020 tax deduction total.

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