The NC 529 Plan Defined!

When it comes to saving your money, it’s important that you understand how a college savings vehicle works. We know that investing in a savings account for college can be a little confusing, especially if you are not familiar with financial jargon about your investment.

That’s why the NC 529® Plan is working to make it as easy as possible for our NC 529 Account holders to understand what they are reading. With our toll-free help line, our FAQs page and social media pages ready and waiting to help answer your questions, there are plenty of ways to get assistance when you need it.

To give you a head start, we’ve developed handy definitions for common terminology and information related to the NC 529 college savings plan:

Beneficiary – This is the person who will go to college in the future and benefit from savings the NC 529 Account owner has put away to help with his or her college education. The beneficiary is often the child or grandchild of an account owner, but can be anyone of any age who will benefit from savings in the account. If you are over 18 with your own college plans, you can even open an account for yourself as both the Account owner (Participant) and the Beneficiary!

Participant – This is the owner of the NC 529 Account. Often a parent or grandparent of the beneficiary is the person who opens an account in the NC 529 Plan to begin saving for a beneficiary’s college expenses. A participant must be 18 years of age or older and have a valid Social Security or tax payer identification number.

Contribution – This is money that the Participant (account owner) puts into his or her  NC 529 Account.  Others may send contributions to the account too, but once their contributions go into the account, the money is the property of the account owner. There is a $25 minimum on NC 529 Account contributions, but higher contributions are always possible.

Qualified Higher Education Expenses (QHEE) – Qualified Higher Education Expenses are costs associated with enrolling in a higher education institution, such as tuition, room and board, a computer and related equipment, books, fees, supplies, and other required equipment used while enrolled. The earnings on NC 529 Account savings will be tax-free upon withdrawal as long as the money is spent on Qualified Higher Education Expenses.

Eligible Higher Education Institution – An eligible higher education institution is a school eligible to participate in the financial aid programs of the U.S. Department of Education. The institution must provide programs of study that award an associate’s, bachelor’s, graduate or professional degree or other postsecondary credential; certain vocational or foreign institutions may also be eligible institutions. If you are uncertain whether your school is eligible, check this information with the financial aid office.

Tax-advantaged – This is a term you may see often while learning about or enrolling in your NC 529 Account. This is because earnings on an NC 529 Account are free from federal and North Carolina taxes when included in your savings and used for Qualified Higher Education Expenses. Learn more about the tax advantage of the NC 529 Plan here.

Saving for college in an NC 529 Account is a great way to save for your child’s college education. Get started today at https://cfnc.org/save-for-college/open-an-nc-529-account/.