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The Vanguard 529 College Savings Plan

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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.

Smitha Walling, Head of Education Savings talks about 529s at Vanguard
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Smitha Walling:  I’m a Mom of two, a daughter and a son.  One who graduated from college already and one who is still there.  And 529s have been a big part of helping save to pay for college.

Education has always been a really important value to our family.  And that's the case for many investors in the country who cite education as a top three savings goal.

529s are one of the most popular investment vehicles for saving for education.  They let you save in a tax-deferred way. And in some cases, even benefit from a state tax deduction.  And when you use the funds for qualified expenses, you can take the withdrawals tax-free.

Disclosure on screen:

Earnings 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.  

You can use the funds to cover tuition and expenses for K through 12, for 2- or 4-year colleges, trade school, apprenticeship, even study abroad, and potentially even put the funds toward student loan repayment. And if the funds go unused, you can transfer the funds to your other children, grandchildren or other qualified family members.  And if that is still not flexible enough, you can use the funds and rollover up to $35,000 into a Roth IRA for your beneficiary.

With a 529 account, you can feel confident knowing your investing in your loved one’s future.  At Vanguard, it’s our mission to give you, and your loved ones, the best chance for investment success.

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Important Information

For more information about The Vanguard 529 College Savings Plan, visit vanguard.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor.

The Vanguard 529 College Savings Plan is a Nevada Trust administered by the office of the Nevada State Treasurer.
 
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.

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.

Investment returns are not guaranteed, and you could lose money by investing in the Plan. Account owners assume all investment risks, including the potential for loss of principal, as well as responsibility for any federal and state tax consequences.

Certain restrictions apply to Roth IRA rollovers, including to whom the assets may be transferred, a required holding period of 15 years, and limits on rollovers of contributions made within the 5 years prior to the rollover. The annual rollover limit is subject to Roth IRA annual contribution limits with a lifetime limit of $35,000 for each 529 account beneficiary. Consult your tax advisor prior to initiating a rollover.

©2024 The Vanguard Group, Inc.  All rights reserved.

529 plans offer all kinds of flexibility

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Spending

You can use 529s on more than just tuition. Education-related expenses aren’t taxed. Think room and board, computers and equipment, books and supplies, student loan repayment, general education expenses, and more.1

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Beneficiary

You can update the plan’s beneficiary and give the remaining money to a child, grandchild, or any qualified family member.

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Rollover

You can roll over up to $35,000 into a Roth IRA for a beneficiary when certain conditions are met, thanks to the SECURE 2.0 Act.2

Qualified family member

You can change the beneficiary of your account at any time as long as the new beneficiary is a qualified family member of the original beneficiary. Here is a partial list of relatives that are considered qualified family members according to the IRS:

  • Brother, sister, stepbrother, stepsister, half-brother, or half-sister.
  • Son, daughter, or a descendant of either.
  • Father, mother, or an ancestor of either.
  • Son-in-law, daughter-in-law, brother-in-law, or sister-in-law.
  • Beneficiary's spouse or the spouse of any individual listed above.
  • First cousin.

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.*

Select a state from the dropdown menu.
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state tax details

*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

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Low costs

Our costs are among the lowest in the industry.3 By minimizing costs and fees, you’ll have more money for educational expenses. 

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Expert management

Saving for education should feel smart. As one of the largest 529 plan money managers, we only hire top investment professionals.4 

Two ways to save

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The hands-off approach

With our Target Enrollment Portfolios (TEPs), you make just one decision—and your portfolio does a lot of the work for you.

The hands-off approach

With our Target Enrollment Portfolios (TEPs), you make just one decision—and your portfolio does a lot of the work for you.

 Explore Target Enrollment Portfolios
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The hands-on approach

Design and manage your own investment strategy by choosing from our individual portfolios.

 

The hands-on approach

Design and manage your own investment strategy by choosing from our individual portfolios.

 

 Explore individual 529 portfolios
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The hands-off approach

With our Target Enrollment Portfolios (TEPs), you make just one decision—and your portfolio does a lot of the work for you.

The hands-off approach

With our Target Enrollment Portfolios (TEPs), you make just one decision—and your portfolio does a lot of the work for you.

 Explore Target Enrollment Portfolios
A man looking at a pie chart with hand up.

The hands-on approach

Design and manage your own investment strategy by choosing from our individual portfolios.

 

The hands-on approach

Design and manage your own investment strategy by choosing from our individual portfolios.

 

 Explore individual 529 portfolios

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.

Start a college savings plan today

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Education savings tools

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529 state tax deduction calculator

If your state offers a tax benefit, you can estimate the deduction you could receive for your 529 contribution this year.

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Compare 529 savings plans

Compare the features of a Vanguard-associated 529 savings plan to another state-sponsored 529 plan.

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College savings plans

Estimate how much you may need to save to meet your education savings goals.

Calculate savings needed

Want to learn more?

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How does having a 529 impact financial aid?

Financial aid: scholarships, grants, and loans. What are they and how can they help with your college plan?

 

How does having a 529 impact financial aid?

Financial aid: scholarships, grants, and loans. What are they and how can they help with your college plan?

 

 Go to article
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When should you start saving for college?

The earlier you save for college, the better. But it's never too late to get started.

 

When should you start saving for college?

The earlier you save for college, the better. But it's never too late to get started.

 

 Access the article
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10 things that may surprise you about 529s

Learn surprising advantages of 529 education savings plans, including tax benefits and investment options.

10 things that may surprise you about 529s

Learn surprising advantages of 529 education savings plans, including tax benefits and investment options.

 Read the facts

Frequently asked questions

Getting started with a 529 account

529 account ownership

529 account rollovers and transfers

Gifting a 529 plan

Qualified higher-education expenses

These include room and board, books, supplies, tuition, and other costs at any accredited trade or vocational school, apprenticeship, college, or graduate school in the United States or abroad. If you use 529 plan money to pay for qualified expenses, you won't owe taxes or penalties.

Qualified family member

You can change the beneficiary of your account at any time as long as the new beneficiary is a qualified family member of the original beneficiary. Here is a partial list of relatives that are considered qualified family members according to the IRS:

  • Brother, sister, stepbrother, stepsister, half-brother, or half-sister.
  • Son, daughter, or a descendant of either.
  • Father, mother, or an ancestor of either.
  • Son-in-law, daughter-in-law, brother-in-law, or sister-in-law.
  • Beneficiary's spouse or the spouse of any individual listed above.
  • First cousin.

Beneficiary

The person you're opening the account for, or the future student. This person doesn't have control of the money in the account, but can use the money from the plan for school costs. The account owner controls the money on behalf of the beneficiary.

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Investing on your own?

Check out key information you can use as you begin your successful DIY investing journey.

 

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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.