FAQs

No, you cannot rebalance the asset allocation in your individual portfolio(s), but you can tweak your overall investment options up to twice a year. There are two ways to adjust how your money is invested: either by selling your portfolio and using those funds to purchase a new one, or by keeping your previous portfolio(s) and then putting future contributions into a new investment option. Learn more about changing your investment choices.

Yes. You can transfer Coverdell Education Savings Account (ESA) funds into your VT529 account by using our Rollover Form (PDF). The transfer of funds can be made tax free so long as the contributions to your account are being made for the same beneficiary within the same taxable year. Consult your tax advisor for more info.

Yes, you can transfer assets from a UGMA/UTMA account into your VT529 account, but only if your VT529 account is also set up as an UGMA/UTMA account. You may wish to speak with your financial or tax advisor, as there could be tax implications and other penalties.

If you receive a refund from an eligible educational institution, you can use our Contribution Form (PDF) to recontribute those funds back into your account without tax penalties or fees, as long as you do so within 60 days of receiving the refund.

In the unfortunate event that your beneficiary dies or becomes disabled, you can withdraw the funds in your account. Please note, the earnings portion (not the amount you contributed) of this withdrawal is subject to federal income tax. However, you will not be charged the additional 10% federal penalty tax. 

If your beneficiary gets a full ride or partial scholarship, you can withdraw your contributions up to the amount of the scholarship without a penalty or additional tax, but you will have to pay income tax on the earnings.

No. VT529 accounts are not guaranteed by The Vermont Student Assistance Corporation, the State of Vermont, any state agency or subdivision thereof, or their authorized agents or affiliates. You could lose money by investing in a VT529 account. Before investing, you should consider investment objectives, risks, charges and any expenses. Before opening an account, you should carefully read and understand the Plan Disclosure Booklet and Participation Agreement and may wish to consult your own financial advisor. 

If you end up with excess funds saved in your VT529 account, you have a few options.

You can transfer your excess funds to a different beneficiary penalty-free (as long as they are considered a “member of the family”).

You can hold on to the funds to use for a beneficiary in the future (possibly a grandchild) or even for yourself at a later time, also penalty-free.

If your beneficiary gets a scholarship, you can withdraw up to the amount of the scholarship without a penalty or additional tax, but you will have to pay income tax on the earnings.

And, you can always withdraw your remaining funds as a non-qualified withdrawal, but the earnings portion (not the amount you contributed) of a non-qualified withdrawal typically is subject to federal income tax, and an additional 10% federal penalty tax.

Yep. You can have payments directly made out to any eligible, U.S.-based educational institution to pay a bill or tuition online or by using our Withdrawal Form. 

Yes. Student loans are considered as qualified expenses.