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Ohio Life

Frequently Asked Questions About Ohio’s 529 Plan

Ohio’s 529 plan is a tax-free way to set aside money for expenses related to education beyond high school. Here are answers to some commonly asked questions.  

The average student-loan repayment costs nearly $400 a month — a hefty bill to face after earning a degree.

“Picture yourself in that position where you have worked hard to get a degree or credential, and for the foreseeable future, you have that much to pay back,” says Tim Gorrell, executive director of the Ohio Tuition Trust Authority that administers the state’s 529 plan. “And it’s often at the expense of retirement savings or maybe buying a home and starting a family. Those things fall by the wayside because of student-loan debt.”

With Ohio’s 529 plan, families can save for whatever comes after high school by growing tax-free savings that are also tax free when you spend them. You can start the plan once a child is born, but it’s never too late. Plus, the plan can be used to fund a variety of postsecondary options, including trade schools, certificate programs, apprenticeships and more. Here, Gorrell answers some common questions about Ohio’s 529 plan.

What if you do not have a lot of money to save in a 529 plan?
A lot of people are paralyzed by the enormity of saving for education after high school, but the key is to start. A minimum contribution is $25, and if you save that every month for 18 years, you’ll have some return. Even starting small and increasing your contribution as other debts are paid off or if your economic situation improves can make a big difference. As you see your investment grow, you might adjust your goals. 

How can a 529 plan be used to pay for educational expenses after school? 
Some families say, “I can’t predict what my child will use the funds for or what type of school they will go to.” But you can assume there will be something and it will cost, even if there are other funding sources like scholarships or gifts. Your 529 plan can be used for room and board, computers, books — any expense related to a program. A 529 can be used in combination with other financial resources. Plus, a new aspect of the program is that a 529 plan can be used to pay for apprenticeships and student loans.

Who can contribute to a 529?
Anyone can contribute. It doesn’t have to be parents, grandparents, aunts or uncles. We have a very easy-to-use gift-giving platform. We hear so often that kids don’t need more “things,” so maybe on a birthday or special occasion or holiday, a gift is a contribution to a 529 plan.

How does a person who gives a gift to a 529 plan benefit? 
Ohio residents who contribute to a 529 plan can qualify for up to $4,000 per year per account to take off of their taxable income. So, if you have two 529 accounts and max out the tax benefit, you could take an $8,000 tax deduction. It’s not a maximum contribution, just a cap for the benefit and it has unlimited carryover. So, if you go over the $4,000 contribution, you can carry that over to the next year, and this benefit is for any person who contributes to the account, not just a parent or grandparent. 

To learn more about Ohio’s 529 plan, visit

This story ran in the Winter-Spring 2023 issue of College 101.