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What is a 529 plan and how does it work?
A 529 plan is a tax-advantaged account made specifically for education savings like college, trade school, vocational school, and even K-12. You can open a 529 for anyone.
529 plans offer all kinds of flexibility
Select a state to view your tax benefits
Our 529 benefits tool allows you to view state tax breaks and how your state’s 529 plan stacks up against The Vanguard 529 Plan, sponsored by Nevada.*
*This tool considers the population of direct-sold plans for the chosen state.
All state-related 529 plan data are sourced from SS&C.
There may be other material differences between products that must be considered prior to investing.
The Vanguard 529 plan benefits
Two ways to save
529 rules and considerations
Lifetime limits
The Vanguard 529 has a $500,000 max overall lifetime contribution. Other states and plans may have a different limit.
Gift tax considerations
There’s no annual contribution limit. You can contribute up to $19,000 per year ($38,000 if married filing jointly) in 2025 to a single beneficiary without triggering the federal gift tax.
IRS limits
You can only exchange between the portfolios in the your plan twice a year. Automatic exchanges in Target Enrollment Portfolios don’t count.
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Education savings tools
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Frequently asked questions
Getting started with a 529 account
Through a prepaid tuition plan, you buy credits for tuition, usually at a specific state college or state college system, at today's prices. If the beneficiary attends a different college or doesn't attend college at all, you may not get back the full value of the credits.
Through a 529 savings plan, you can contribute to different types of portfolios offered by the plan. You can use this investment to pay for tuition, room and board, books, supplies, and other qualified expenses at any accredited vocational school, college, or graduate school in the United States or abroad. You can also use your 529 plan assets for K–12 tuition of up to $10,000 per student per year at a public, private, or religious school.
We partner with the New York and Colorado plans—so you'll have access to Vanguard’s investments and 529 plan management—and if you live in these 2 states you may want to consider the following.
- New York’s 529 College Savings Program Direct Plan features Vanguard investments and no minimum contribution amount to get started. Additionally, New York state residents who sign up can receive a generous tax deduction.
- The Colorado CollegeInvest® Direct Portfolio College Savings Plan features Vanguard investments and a low minimum contribution of $25 to open an account and $15 for additional contributions. Additionally, Colorado residents who sign up can receive a generous tax deduction.5
529 account ownership
When a Vanguard 529 account is established, only one person can be designated as the account owner. The named owner will be the only person with online access to see balances, change investments, or withdraw money from the account.
However, account owners may grant permission to additional interested parties (spouse, grandparent, etc.) to view account information and transactions through the contact center by completing the agent authorization form.
Yes, more than one account can be opened on behalf of the same beneficiary. State tax deductions are generally only available to account owners. If that's a benefit you're looking for, you might be better off opening a separate account for your beneficiary even if one already exists.
529 account rollovers and transfers
Yes, the IRS allows one tax-free rollover of a 529 account per beneficiary in a 12-month period. (If you violate the 12-month rule, you must treat the transaction as a nonqualified distribution and pay federal income tax and a 10% penalty on the earnings.)
Keep in mind that when you roll over into another state's plan, some states require you to pay the state income tax on any contributions for which you previously received a deduction.
To roll over your current 529 account into The Vanguard 529 Plan (known as a direct rollover), you'll first need to open a new account in the plan and select With a rollover or transfer when asked to pick a funding method. Then print out your Incoming Rollover Form and mail it to your current plan.
If you prefer, you can instead withdraw the money in your current plan and then send us the check along with an Enrollment Application for a new account (known as an indirect rollover). In order for the transaction to be treated as a rollover, you must redeposit the money within 60 calendar days of withdrawing it, and the application must indicate that the initial contribution is an indirect rollover. You'll also need to enclose documentation that shows the breakdown of contributions and earnings in the account. (If documentation isn't included, we'll treat the entire amount as earnings, which could have negative tax consequences for you.)
Yes, you can move money from a Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) account to The Vanguard 529 Plan (subject to the laws of the state under which the UGMA/UTMA account was opened).
As with the original account, the money in a 529 UGMA/UTMA account will belong to the minor who owns it, meaning that it can't be transferred to a different beneficiary. In addition, the custodian will be required to transfer control of the account to the beneficiary once he or she becomes an adult.
You'll need to sell all assets in the UGMA/UTMA before moving the money to the 529, which could trigger capital gains taxes.
Because money gifted to a child in an UGMA/UTMA account is irrevocable, you shouldn't mix UGMA/UTMA and non-UGMA/UTMA assets in the same 529 account. You should consult with a tax advisor before transferring UGMA/UTMA assets to a 529 plan.
Gifting a 529 plan
You can use Ugift® to invite others to celebrate a child's milestones with the gift of education savings. The gifts are then deposited directly into your Vanguard 529 Plan account.
You can also join Upromise® to get cash back for education when you make everyday purchases. Your Upromise earnings can then be transferred to your 529 account.
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The Vanguard 529 College Savings Plan is a Nevada Trust administered by the office of the Nevada State Treasurer.
1Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. State tax treatment of withdrawals used for i) expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school, ii) expenses related to apprenticeship programs, or iii) student loan repayments is determined by the state(s) where the taxpayer files state income tax. If you are not a Nevada taxpayer, please consult with a tax advisor.
2Not all states allow for Roth IRA rollovers. Use OGC’s disclosure for this
3Vanguard average 529 expense ratio: 0.14%. Industry average 529 expense ratio: 0.48%. Average annual asset-based fees for age-based portfolios. Sources: ISS Market Intelligence, December 2024.
4Vanguard managed approximately $165 billion in 529 plan assets as of December 31, 2023.
5Contributions to the Plan(s) are deductible from Colorado state income tax in the tax year of the contribution, up to your Colorado taxable income for that year. Such deductions are subject to recapture in subsequent years in which nonqualified withdrawals are made.
6In the event the donor does not survive the 5-year period, a prorated amount will revert back to the donor's taxable estate. For more information about The Vanguard 529 College Savings Plan, call 877-930-4972 or obtain a Program Description (PDF), which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor.
For more information about any 529 savings plan, contact the plan provider to obtain a Program Description (PDF), which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing.
If you are not a taxpayer of the state offering the plan, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Other state benefits may include financial aid, scholarship funds, and protection from creditors. Vanguard Marketing Corporation serves as distributor for some 529 plans.
If you are not a Nevada taxpayer, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Other state benefits may include financial aid, scholarship funds, and protection from creditors.
State tax treatment of withdrawals for K–12 tuition expenses, apprenticeship program expenses, and student loan repayments is determined by the state(s) where the taxpayer files state income tax. Please consult with a tax advisor for further guidance.
The Vanguard Group, Inc., serves as the Investment Manager for The Vanguard 529 College Savings Plan and through its affiliate, Vanguard Marketing Corporation, markets and distributes the Plan. Ascensus Broker Dealer Services, LLC, serves as Program Manager and has overall responsibility for the day-to-day operations. The Plan's portfolios, although they invest in Vanguard mutual funds, are not mutual funds. Investment returns are not guaranteed and you could lose money by investing in the Plan.
All investing is subject to risk, including the possible loss of the money you invest.
Upromise is a registered service mark of Upromise, Inc. Ugift is a registered service mark of Ascensus Broker Dealer Services, LLC. Please note that Upromise is an optional service offered by Upromise, Inc., and is separate from the Plan. Specific terms and conditions apply. Participating companies, contribution levels, and terms and conditions subject to change without notice.
Upromise is an optional service offered by Upromise, Inc.; is separate from The Vanguard 529 College Savings Plan; and is not affiliated with the state of Nevada. Terms and conditions apply to the Upromise service. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice. For more information about Upromise, go to upromise.com.