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 Maryland 529 was 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 Maryland 529 (Code Tax-General Article, sec. 10-208).
Maryland Senator Edward J. Kasemeyer Prepaid College Trust. The Maryland Prepaid College Trust was established by the Board in 1997 as the Maryland Prepaid College Trust to hold investments. It assumed its present name in June 2018. 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 Senator Edward J. Kasemeyer 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 next opportunity to enroll begins December 1, 2018.
Maryland Senator Edward J. Kasemeyer College Investment Plan. The Maryland College Investment Plan formed in July 2000 as the Maryland College Investment Plan. It received its present name in June 2018 (Chapter 494, Acts of 2000; Chapter 419, Acts of 2018). 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) Program was 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 allows individuals with disabilities and their families to contribute up to $15,000 per year for disability-related expenses in tax-exempt accounts. Eligibility and benefits under federal and State means-tested programs, such as Medicaid, housing and food assistance, are not altered by the balance in the account. The Program opened enrollment in November 2017 (Code Education Article, secs. 18-19C-01 through 18-19C-10).
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