More accounts and $36,100 in incentives added in first half of 2023

Almost twice as many people as last year have started saving for higher education with DE529 Education Savings Accounts according to State Treasurer Colleen Davis. More than 1,400 new DE529 accounts opened through June of 2023, a number 41% higher than during the same time last year.

“As the cost of college and trade school continues to rise, it has become more crucial than ever for families to plan for their children’s future,” said Treasurer Davis. “Our office is proud to sponsor the DE529 Education Savings Plan, which provides tax-advantaged accounts designed to help parents, grandparents and others pay for higher education expenses.”

Managed by Fidelity Investments, money in a DE529 account grows on a tax deferred basis, and withdrawals for qualified expenses like tuition, fees, and books are federal and Delaware income tax-free.

In addition to making the plan available, the Office of the State Treasurer (OST) and the Plans Management Board, the group that directs and serves as trustees of the money invested in the plans, credit the First State, First Steps incentive program with boosting enrollment.

“Through the first half of the year, 361 new DE529 accounts qualified for the First State, First Steps incentive which makes a $100 contribution to eligible accounts,” Davis said. “If the beneficiary is five years of age or younger and a Delaware resident at the time of account opening, the DE529 plan will add the contribution to every new account opened with an initial deposit of at least $100.

To help spread the word about DE529 and the benefits of saving for higher education, Fidelity recently sponsored Kids’ Day at the Delaware State Fair. DE529 is also the proud sponsor of “Kids Run the Bases” after every Sunday afternoon home game of the Wilmington Blue Rocks, and serves as the exclusive sponsor of the Route 1 Rivalry between the University of Delaware and Delaware State University.

For more information on the DE529 Education Savings Plan and the First State, First Steps program, visit 529.delaware.gov.

Also, unused education savings can soon rollover for retirement

“First State, First Steps,” a pilot incentive program for Delawareans offering a $100 contribution to a new DE529 Education Savings Plan account added $37,700 to accounts over the last six months of 2022.

“I am thrilled that our First State, First Steps program gave 377 young Delawareans a head start on saving for college,” State Treasurer Colleen Davis said. “Because of the project’s success, the Plans Management Board approved its extension until at least June 30, 2023.”

First State, First Steps will contribute $100 into every newly opened DE529 account if:

• The beneficiary is five years of age or younger at the time of account opening
• The beneficiary is a Delaware resident at the time the account is opened
• A minimum contribution of at least $100 is made to the DE529 account when the account is opened

Managed by Fidelity Investments, the DE529 Education Savings Plan provides tax-advantaged accounts designed to help parents, grandparents and others pay for higher education expenses. Withdrawals for qualified higher education expenses like tuition, fees, and books are federal and Delaware income tax-free.

Money in a DE529 account not spent on education costs can now continue to help with future saving thanks to the recent passage of the Secure 2.0 Act in the omnibus spending bill supported by Treasurer Davis, approved by congress and signed by President Biden at the end of December.

“The need to save for future expenses goes beyond the college years and beginning in 2024, money left in a DE529 account can be rolled into a Roth IRA belonging to the beneficiary of the 529 account,” Treasurer Davis said. “Up to $35,000 in total can be moved without penalty though funds cannot exceed Roth IRA annual contribution limits, and the DE529 account that holds the money will need to have been open for at least 15 years.

For more information on the DE529 Education Savings Plan and the First State, First Steps program, visit 529.delaware.gov.

Qualified accounts to receive $100 contribution

Continuing her commitment to make saving for higher education easier, Delaware State Treasurer Colleen Davis announces the “First State, First Steps” program.

“I have said time and time again that it’s never too early to save for college and ‘First State, First Steps’ will help people get started,” Davis said. “I know families with young children have competing financial priorities, so we want to help them get started.”

“First State, First Steps” is an incentive program for Delawareans. The program provides for a $100 contribution to a DE529 Education Savings Plan account opened between July 1, 2022, and December 31, 2022.

In addition to the account being opened during the applicable time period, in order to qualify for the $100 incentive:

• The beneficiary must be five years of age or younger at the time of account opening
• The beneficiary must be a Delaware resident at the time the account is opened
• A minimum contribution of at least $100.00 must be made to the DE529 account when the account is opened

Delaware’s 529 Plan is sponsored by the State of Delaware and managed by Fidelity Investments. The Plan provides tax-advantaged accounts designed to help parents, grandparents and others pay for higher education expenses.

The cost of a four-year public college has increased 225% over the last 30 years, according to the College Board. Each year it becomes harder and harder for families to afford a quality education without setting themselves up for years of student loans payments.

“The student loan balance for Delawareans averages more than 37-thousand dollars,” Davis said. “Proper saving can help students graduate without facing years of loan payments allowing them to save for other financial goals including a home, car, and retirement.”

Money in a DE529 account grows on a tax deferred basis, and withdrawals for qualified education expenses like tuition, fees, and books are federal and Delaware income tax-free.

For more information on the “First State, First Steps Program,” visit 529.delaware.gov.