In 1997, the Maryland 529 Board originated as the Maryland Higher Education Investment Program Board (Chapters 110, 111, Acts of 1997). It was renamed the Maryland Higher Education Investment Board in July 2000 (Chapter 494, Acts of 2000), and the College Savings Plans of Maryland Board in July 2003 (Chapter 382, Acts of 2003). The Board adopted its present name in July 2016 (Chapter 39, Acts of 2016).
The Maryland 529 Board administers qualified tuition savings programs created by the U.S. Congress in 1996, and savings accounts used to fund specific expenses for eligible people with disabilities created in 2014. The programs are named after section 529 of the Internal Revenue Code which provides for them.
Ten members constitute the Maryland 529 Board. Five are appointed to four-year terms by the Governor. Six serve ex officio (Code Education Article, secs. 18-1901 through 18-1916).
Entrance, 217 East Redwood St., Baltimore, Maryland, August 2015. Photo by Diane F. Evartt.
To encourage families to save for future college expenses and reduce their dependence on student loans and other forms of debt, the College Savings Plans of Maryland were established. The plans function under the federal Internal Revenue Code (Section 529), which allows states to establish and administer tax-deferred college savings plans. Also, State laws provide certain income tax benefits for Maryland taxpayers who choose to participate in the College Savings Plans of Maryland (Code Tax-General Article, sec. 10-208).
Maryland Prepaid College Trust. The Maryland Prepaid College Trust was established by the Board in 1997 to hold investments. Under the Trust, Maryland and District of Columbia residents at the time of enrollment in the plan may prepay tuition for a college education. Parents, grandparents, or other interested parties may purchase a contract for an individual based on current tuition and fee amounts. Payments are combined with those of other account holders and are invested to fund future benefit payments. Investments in the Maryland Prepaid College Trust are guaranteed by State law.
At Maryland public colleges and universities, the Trust is designed to pay the equivalent of the in-state student tuition and mandatory fees. Benefits also may be applied to the tuition costs at any accredited private or out-of-state college (Code Education Article, Sec. 18-1903).
Children from birth through 12th grade may participate, but accounts must be open for at least three years before tuition benefits can be paid. Each year, there is an enrollment period although accounts for newborns may be opened at any time. The current enrollment period ended April 24, 2017. The next opportunity to enroll begins December 1, 2017.
Maryland College Investment Plan. The Maryland College Investment Plan formed in July 2000 (Chapter 494, Acts of 2000). To save for college on behalf of a qualified designated beneficiary, contributors establish an investment account tied to mutual fund investment portfolios. The Plan is managed and distributed professionally through a contract with the State and any investment earnings in an account are exempt from State and federal tax if used for tuition, housing, books, and other eligible higher education expenses. Maryland residents and nonresidents of any age may participate in the Plan. Enrollment is open year round (Code Education Article, secs. 18-19A-01 through 18-19A-07).
Maryland Broker-Dealer College Investment Plan. Though authorized effective October 1, 2008, this plan has not yet been implemented (Chapter 548, Acts of 2008). The Maryland Broker-Dealer College Investment Plan would allow Maryland families to invest in an investment account, using private investment advisors. However, the Plan is not yet operating, since the Board has not chosen to offer this option (Code Education Article, secs. 18-19B-01 through 18-19B-08).
Maryland Achieving a Better Life Experience (ABLE) Program. In July 2016, the Maryland Achieving a Better Life Experience (ABLE) Programwas established (Chapter 39, Acts of 2016). Also in July 2016, the Maryland 529 Board was assigned to establish, administer, manage, and promote the ABLE Program. For disabled individuals and their families, the federal Stephen Beck, Jr. Achieving a Better Life Experience Act of 2014 authorizes states to establish such programs (Public Law 113-295). Maryland's ABLE Program will help individuals with disabilities and their families invest and save for disability-related expenses in tax-exempt accounts. The Program is to launch by October 1, 2017 (Code Education Article, secs. 18-19C-01 through 18-19C-10).
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