Overview

What is a 529 plan?
What is College SAVE?
What is Ascensus Broker Dealer Services, Inc.?
What is Vanguard?
What is Upromise®?
What is Ugift® - Give College Savings?

Plan Basics

Who can open an account?
Who can contribute to College SAVE?
How much do I need to open an account?
How do I open a College SAVE account?
Can I open a College SAVE account with the money from my child's UGMA/UTMA?
As the participant, do I retain control of the account's assets?
Who can be a designated beneficiary?
Can I open an account for an unborn child?
Can I change the designated beneficiary?
What if my beneficiary decides not to go to college?
Is my designated beneficiary required to attend school in North Dakota?

Investments

What are my investment choices?
Are portfolio returns guaranteed?
Can I change my investment options?
If I'm invested in an age-based savings option, do I need to do anything as the designated beneficiary grows older?
Can I see a list and description of the portfolios' underlying funds?
Where can I find information on investment performance?
How is investment performance determined?

Financial Aid

What impact does a 529 plan have on eligibility for federal financial aid?

Taxes

What are the income tax benefits of College SAVE?
Is there a tax benefit for North Dakota taxpayers?
What are the gift and estate tax benefits?

Using College SAVE

How can I use the money in my account?
What are qualified higher education expenses?
What if I do not use the money in my account for a qualified higher education expense?
How can I contribute to my account?
If I choose to mail a check, when will my contribution be invested in the plan?
If I make a one-time contribution via electronic bank transfer (EBT), when will my contribution be invested?
If I set up a recurring contribution, when will my contributions be invested?
If I want to establish a recurring contribution or EBT option on my 529 account, what type of bank account can I use?
Can I invest by recurring contribution or EBT from a mutual fund?
Can I contribute to more than one 529 plan?
What if I move to another state?
Is paying off a student loan a qualified higher education expense?
Does my designated beneficiary have to attend college in North Dakota?
What if my beneficiary does not go to college immediately after high school?
How do I make distributions from the plan?
How long does the distribution process take?
How soon can I begin making distributions after investing?
What tax forms will I receive when I make a distribution?
How do I obtain my matching grant funds?
If I receive a Children FIRST grant, can I still apply for/receive a College SAVE Matching Grant?

Overview

What is a 529 plan?
529 plans are tax-advantaged programs designed to help families save for college and other higher education. Generally, 529 plans are sponsored by individual states. (The name "529" comes from section 529 of the Internal Revenue Code that regulates the plans.)

What is College SAVE?
College SAVE is a 529 plan established by the State of North Dakota and administered by Bank of North Dakota.

What is Ascensus Broker Dealer Services, Inc.?
Ascensus Broker Dealer Services, Inc., the plan manager for College SAVE, is the leading provider of administrative services for 529 plans.

What is Vanguard?
Vanguard is the investment manager for College SAVE and is one of the nation's leading mutual fund managers. Vanguard is committed to providing a low-cost, wide-ranging choice of investments, including index portfolios, to help College SAVE participants accumulate the assets they need to send their children to college.

What is Upromise®?
Upromise is a free to join rewards program that can turn every day purchases -- from shopping online to dining out, from booking travel to buying groceries -- into cash back for college. A percentage of your eligible spending will be deposited into your Upromise account. You can link your Upromise account to your eligible 529 account and have your college savings automatically transferred. Visit Upromise.com/NorthDakota to learn more and enroll.1

What is Ugift® - Give College Savings?
Ugift - Give College Savings is an innovative service that lets you invite family and friends to celebrate milestones with a gift contribution to your College SAVE account. Learn more.

Plan Basics

Who can open an account?
Any U.S. citizen or resident alien, 18 or older, with a Social Security number or taxpayer identification number and a U.S. street address (not a post office box) can open a College SAVE account, regardless of income level or state of residence. Certain other types of entities may open an account as well. If you are opening an account as a trust, you must include copies of the pages of the trust agreement containing the name of the trust, the date of the trust, and a listing of all trustees and their signatures. A state or local government (or agency or instrumentality) or organization described in Section 501(c)(3) of the U.S. tax code may open an account to fund scholarships. Please provide any legal documentation that identifies person(s) who has the authority to act on the behalf of the account.

Who can contribute to College SAVE?
Anyone can contribute to an existing College SAVE account, but total contributions cannot exceed $269,000. The easiest way for third parties to contribute to your College SAVE account is to use Ugift. Please see the College SAVE Plan Disclosure Statement for complete information regarding contributions.

How much do I need to open an account?
You can open a College SAVE account with as little as $25. You can also establish a recurring contribution with a minimum initial contribution of $25 per month or $75 per quarter.2

Subsequent contributions may be made by check, money order, recurring contribution, payroll direct deposit, EBT, transfer from a Upromise account, third-party checks payable to a participant or a designated beneficiary and properly endorsed to the Plan, Ugift - Give College Savings, or a rollover. The maximum contribution limit is $269,000.

How do I open a College SAVE account?
It's easy! Enrolling online is the easiest way; just go to the Enroll Now section. You can also download an Enrollment Kit, fill it out and mail it in. Before you enroll, be sure to read the Plan Disclosure Statement. It contains important details regarding the College SAVE Plan. If you have questions at any time, you can call College SAVE at 1.866.SAVE.529.

Can I open a College SAVE account with the money from my child's UGMA/UTMA?
College SAVE permits a custodian for a minor under the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act (UGMA/UTMA) to apply funds held in an UGMA/UTMA account to open an account in the Plan and to fund additional contributions to such an account, subject to the laws of the state under which the UGMA/UTMA account was established. You should consult with a tax advisor before using UGMA/UTMA assets to fund a 529 plan account.

As the account owner, do I retain control of the account's assets?
Yes. The participant retains control of the account's assets, including when and how the assets are used.

Who can be a designated beneficiary?
The designated beneficiary may be of any age, from newborn to adult, as long as they have a Social Security number or taxpayer identification number. There are no restrictions on a designated beneficiary's state of residence or income. You do not have to be related to the designated beneficiary and you can even open a College SAVE account for yourself.

Can I open an account for an unborn child?
No. The designated beneficiary must have a Social Security number or taxpayer identification number. However, you may open an account with you as the designated beneficiary and then change the name of the beneficiary to the child upon birth.

Can I change the designated beneficiary?
You can change the designated beneficiary on your account at any time provided that the new designated beneficiary is an eligible Member of the Family of the former designated beneficiary.

What if my beneficiary decides not to go to college?
In this case, you have three options:

  • Stay invested. You can leave the money in the account in case the designated beneficiary decides to attend school at a later time. There is no age - or time - limit for using the money.
  • Change the designated beneficiary. You can change the designated beneficiary on your account at any time provided that the new beneficiary is an eligible Member of the Family of the former beneficiary. Please see the Plan Disclosure Statement for more information on who qualifies.
  • Withdraw the money for other uses. The earnings portion of a withdrawal not used for a designated beneficiary's qualified higher education expenses is subject to federal and state income taxes and may be subject to a 10% federal penalty tax. (For exceptions to this penalty, please see the Plan Disclosure Statement.)

Additionally, any accumulated earnings that are withdrawn from your account must also be reported on the recipient's income tax return for the year in which they are withdrawn. Contact your tax advisor to determine how to report a non-qualified withdrawal.

Is my designated beneficiary required to attend school in North Dakota?
No. The money in your College SAVE account may be used at any eligible higher education institution in the United States or abroad that qualifies under federal guidelines. This includes most 2- and 4-year public and private colleges and universities, graduate and post-graduate schools, and certain technical and vocational schools. To check on the eligibility of a school, please click here

Investments

What are my investment choices?
The plan offers nine investment options. You can choose the type of investment that best meets your particular investment style, from the one-step ease of an age-based option to the hands-on approach of individual portfolios.

  • Age-based options: For those who prefer a simplified approach to investing, College SAVE offers three age-based options - conservative, moderate, and aggressive. When you select any of these options, your assets will be managed according to the age of your designated beneficiary and your risk tolerance through a series of investment portfolios with increasingly conservative asset allocations over time.
  • Individual portfolios: You can choose from six individual options that can help you build a portfolio according to your specific investment goals. Your risk tolerance and time horizon will determine which investments best meet your needs. There is no automatic re-allocation with this investment option; you must do it yourself.

For complete details on the investment options offered by College SAVE, please see the Plan Disclosure Statement.

Are portfolio returns guaranteed?
Your returns are never guaranteed and your account value will fluctuate with market performance. As with any investment in securities, you can lose money by investing in College SAVE. Keep in mind that the holding period for college investors is short (generally 5 to 20 years), and you should consider investing more conservatively as the time approaches for you to begin making distributions. Before you select an investment option, you should carefully consider your investment time horizon and risk tolerance.

Can I change my investment options?
You can change the direction of your future contributions at any time. Federal law permits you to move the assets in your College SAVE account to a different mix of investment options up to two times per calendar year or whenever you change the account's designated beneficiary.

If I'm invested in an age-based savings option, do I need to do anything as the designated beneficiary grows older?
No. Each age-based option's investments will automatically change from time to time as your designated beneficiary ages. They will shift automatically from more aggressive investments when the designated beneficiary is younger to more conservative investments as he or she approaches college-age.

Can I see a list and descriptions of the portfolios' underlying mutual funds?
Yes. Refer to the Plan Disclosure Statement or go to the Investments section of our website.

Where can I find information on investment performance?
You can obtain performance figures for the Plan's portfolios in the Investments section of this website.

How is investment performance determined?
The returns displayed on the website reflect past performance, are net of all asset-based fees, and are not a guarantee of future performance. Keep in mind that you do not actually own shares in the underlying funds. Instead, you own portfolio units of College SAVE, which means the returns for a particular portfolio will differ from the returns of the underlying funds.

Financial Aid

What impact does a 529 plan have on eligibility for federal financial aid?
529 plan assets are counted at different rates for the Expected Family Contribution (EFC) in the FAFSA formula. As of July 1, 2009, federal guidelines are as follows:

  • If the student is a dependent, a 529 plan account is considered as the parent's asset (if the account owner is the parent or the dependent student). As a result, it will generally be counted at a rate of only 3-6% of its value for the EFC.
  • If the student is not a dependent and is the account owner, the 529 plan account is treated as the student's asset and is generally factored into the EFC at the higher rate of 20%.
  • In other cases, such as a student who is neither a dependent nor the account owner, the account does not count as an asset for federal financial aid purposes. However, a student may have to report distributions received from the account as income for these purposes.

Note: Financial aid programs offered by educational institutions and other non-federal sources may have their own guidelines for the treatment of 529 plan accounts. For complete information about financial aid eligibility, you should consult with a financial aid professional and/or the state or educational institution offering a particular financial aid program, since rules and regulations often change.

Taxes

What are the income tax benefits of College SAVE?

  • Federal income: Earnings grow tax-deferred and are free of federal income taxes when used for qualified higher education expenses. Qualified distributions include tuition (room and board), mandatory fees, books, supplies, equipment, and computer-related expenses.3
  • State income: Earnings are exempt from North Dakota state income taxes when used for qualified higher education expenses. If you're not a North Dakota taxpayer, consider whether your home state offers a 529 plan that provides its taxpayers with tax benefits not available to you through this plan. Be sure to weigh all the pros and cons of a particular plan before you choose to invest.

Is there a tax benefit for North Dakota taxpayers?
Yes. North Dakota taxpayers can take a special tax deduction - up to $10,000 if married, filing jointly; up to $5,000 if single - from their state taxable income for contributions into the College SAVE Plan.4 A North Dakota tax payer may only receive this tax deduction if they contribute to College SAVE. You do not need to be the account owner in order to receive the tax deduction on your contributions to a College SAVE account.

What are the gift and estate tax benefits?

  • Gift-tax free: You can contribute up to $28,000 if married, filing jointly ($14,000 if single) per designated beneficiary each year without incurring gift taxes.
  • Accelerated gifting: There is also a special provision that lets you make up to five years' worth of gifts to your designated beneficiary in one year without incurring gift taxes ($140,000 if married, filing jointly; $70,000 if single) and elect to apply the contribution against the annual exclusion equally or over a five-year period.5

Using College SAVE

How can I use the money in my account?
The money in your College SAVE account can be used for any purpose. However, to qualify for federal tax-free withdrawals on earnings and avoid penalties, the money must be used for qualified higher education expenses for the beneficiary at an eligible educational institution.3

What are qualified higher education expenses?
Qualified higher education expenses can include tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs during any academic period the beneficiary is enrolled at least half-time; computers and peripheral equipment, computer software, Internet access and related services (if such computer equipment, software or services are used primarily by the designated beneficiary while enrolled at an Eligible Educational Institution); and certain expenses for a special-needs student.3

What if I do not use the money in my account for a qualified higher education expense?
The earnings portion of a distribution not used for a designated beneficiary's qualified higher education expenses is subject to federal and state income taxes and a 10% federal penalty tax. Exceptions to this penalty include a distribution made because the designated beneficiary:

  • Has died (if paid to a beneficiary of the Designated Beneficiary or the estate of the Designated Beneficiary).
  • Has become disabled.
  • Received a scholarship, to the extent the distribution amount does not exceed the scholarship amount.
  • Has enrolled in the United States Military Academy, the United States Naval Academy, the United States Air Force Academy, the United States Coast Guard Academy, or the United States Merchant Marine Academy, to the extent that the amount of the distribution does not exceed the costs of education attributable to such attendance.

Any accumulated earnings that are withdrawn from your account must be included on the income tax return of the recipient for the tax year in which they are distributed. Contact your tax advisor about how to report a non-qualified distribution.

How can I contribute to the account?

  • By electronic bank transfer (one-time contributions, from your checking or savings account).
  • By recurring contribution2 (scheduled contributions in set amounts from your checking or savings account).
  • By payroll direct deposit2 (through participating employers only).
  • By check (made payable to College SAVE).
  • By rollover from another 529 plan.
  • By transfer from a Coverdell Education Savings Account or a Series EE or I U.S. Savings Bond.
  • By transfer from an UGMA/UTMA account.6

We will not accept contributions made with cash, traveler's checks, starter checks, bank courtesy checks, credit cards, credit card checks, instant loan checks, foreign checks not in U.S. dollars, checks dated more than 180 days prior to when we receive it, post-dated check, check with unclear instructions, or any other check the Plan deems unacceptable. We also will not accept non-cash assets, such as mutual fund shares or other securities.

If I choose to mail a check, when will my contribution be invested in the plan?
If we receive your request on a business day that the New York Stock Exchange (NYSE) is open for trading and prior to close (generally 4:00pm ET, Monday through Friday), your transaction will be processed with the current day as the trade date. In the event your request is received after the close of the NYSE, then your request will be processed using a trade date of the following business day. All checks should be made payable to College SAVE.

If I make a one-time contribution via electronic bank transfer (EBT), when will my contribution be invested?
If you request an electronic bank transfer on a business day by 10 p.m., Eastern Time, you will receive a trade date of the next business day. Your purchase will be made at that day's closing price for units of the applicable portfolio. Your bank account will be debited on the business day following the trade date.

If you request an electronic bank transfer after 10 p.m. Eastern Time on a business day, you will receive a trade date of the second business day after your request date. Your bank account will be debited on the business day following the trade date (i.e., the third business day after your request date).

If I set up a recurring contribution, when will my contributions be invested?
Your bank account will be debited on the day you designate, provided the day is a regular business day. If the day you designate falls on a weekend or a holiday, the recurring contribution will occur on the next business day. You will receive a trade date of one business day prior to the day the bank debit occurs. For example, if the 15th of every month was selected as the debit date and the 15th falls on a business day, then the trade date for the transaction will usually be the 14th. If you indicate a start date that is within the first four days of the month, there is a chance that your investment will be credited on the last business day of the previous month. Please note that recurring contributions with a debit date of January 1, 2, 3 or 4 will be credited in the same year as the debit date. The first debit of a recurring contribution must be at least three days from the receipt of the recurring contribution request. Quarterly recurring contributions will be made on the day indicated every three months, not on a calendar quarter basis. If no date is designated, your bank account will be debited on the twentieth day of the month. (If the twentieth is not a business day, the debit will be made on the next business day.)

If I want to establish a recurring contribution or EBT option on my 529 account, what type of bank account can I use?
You must have a personal checking or savings account held with a U.S. financial institution that is a member of the Automated Clearing House (ACH) network. You cannot use a passbook savings account for a recurring contribution or EBT option. Generally, money market accounts are not eligible.

Can I invest by recurring contribution or EBT from a mutual fund?
No. Most mutual fund companies are not members of the ACH network.

Can I contribute to more than one 529 plan?
There is no limit to the number of accounts a participant or designated beneficiary may have. In fact, participants and designated beneficiaries may have multiple accounts in multiple states.

What if I move to another state?
You can maintain your account and continue to make contributions no matter where you live in the United States.

Is paying off a student loan a qualified higher education expense?
Repayment of student loans is not considered a qualified higher education expense.

Does my designated beneficiary have to attend college in North Dakota?
No. You can use your College SAVE assets toward the costs of any eligible public or private, 2-year or 4-year college, graduate school, vocational school, or technical institute nationwide. In fact, many U.S. colleges and universities now have campuses or locations outside of the country, where money from your College SAVE account can be used. To check on the eligibility of a school, please click here.

What if my beneficiary does not go to college immediately after high school?
College SAVE does not require the student to attend college immediately after graduating high school. There are no restrictions on when you can use your account to pay for qualified higher education expenses.

How do I make distributions from the plan?
Qualified distributions can be requested either online, or by submitting a Distribution Request Form. Proceeds from qualified distributions can be sent to the participant, the designated beneficiary, or the higher education institution.

Non-qualified distributions must be requested by submitting a Distribution Request Form. Proceeds from non-qualified distributions can be sent to the participant or the designated beneficiary.

How long does the distribution process take?

  • For distributions requested online (qualified distributions only): If we receive your request on a business day that the New York Stock Exchange (NYSE) is open for trading and prior to close (generally 4:00pm ET, Monday through Friday), your transaction will be processed with the current day as the trade date. In the event your request is received after the close of the NYSE, then your request will be processed using a trade date of the following business day. Proceeds can be sent by check or by electronic transfer to your bank account. Proceeds by check will be mailed to the recipient typically within three business days. Allow 10 business days for the check to be received. To receive proceeds by electronic bank transfer, you must have established banking instructions on your account at least 15 business days prior to your distribution request. For a mailing address change, distributions will be held for 15 business days if proceeds are requested by check to the participant or to the designated beneficiary.
  • For distributions requested by submitting a Distribution Request Form: If we receive your request on a business day that the New York Stock Exchange (NYSE) is open for trading and prior to close (generally 4:00pm ET, Monday through Friday), your transaction will be processed with the current day as the trade date. In the event your request is received after the close of the NYSE, then your request will be processed using a trade date of the following business day. . A check will be mailed to the appropriate recipient within three business days. Allow 10 business days for the check to be received. For a mailing address change, distributions will be held for 15 business days if proceeds are requested by check to the participant or to the designated beneficiary.

During unusual conditions such as when the NYSE is closed and during emergency circumstances as determined by the U.S. Securities Exchange Commission, or during heavy year-end processing, distribution requests may take up to five business days to process. Please allow 10 business days for the proceeds to reach you.

How soon can I begin making distributions after investing?
You can withdraw money at any time, but if the distribution includes uncollected assets, your distribution proceeds will be held for up to 10 business days for checks and five business days for electronic transfers.

What tax forms will I receive when I make a distribution?
The plan will generate a Form 1099-Q in January of the calendar year following a year in which there was a distribution from the account. The recipient of the 1099-Q will be either the participant or the designated beneficiary, depending upon who received the proceeds of the distribution. Distributions sent to the participant will be reported under the participant's Social Security number or taxpayer identification number. Distributions sent to the designated beneficiary or to an educational institution will be reported under the designated beneficiary's Social Security number or taxpayer identification number, per IRS guidelines.

How do I obtain my matching grant funds?
Payments from the matching grant account may only be made for qualified distributions to an eligible educational institution. The qualified distribution will generally be taken proportionately from your College SAVE account and your matching grant account. For example, if you request a qualified distribution from your College SAVE account in the amount of $1,000 to be sent to an eligible educational institution and the balance in your College SAVE account is $5,000 and the balance in your matching grant account is $500, then $909.09 would be withdrawn from your College SAVE account and $90.91 would be taken from your matching grant account. If the qualified distribution amount you request will cause the matching grant account to have a market value that falls below $10.00, the prorated amount will be adjusted so that your matching grant account is fully liquidated and the amount taken from your College SAVE account will be reduced.

If I receive a Children FIRST grant, can I still apply for/receive a College SAVE Matching Grant?
Yes. Eligible North Dakota residents can apply for a College SAVE Matching Grant even if they have received a Children FIRST grant (and vice versa).7 Contributions to meet program parameters are applied to Children FIRST first.

This website contains links to other websites as a convenience to users. Neither the Plan, the State of North Dakota, Bank of North Dakota, or Ascensus Broker Dealer Services, Inc., Vanguard nor their respective affiliates, endorses or takes any responsibility for such websites or for any information contained therein, except, in each case, with respect to their own websites.

1Upromise is an optional service offered by Upromise, Inc. It is separate from the College SAVE 529 Plan, and is not affiliated with the State of North Dakota. Specific terms and conditions apply. Participating companies, contribution levels, terms and conditions subject to change without notice. Transfers subject to $25 minimum.
2A plan of regular investment cannot assure a profit or protect against a loss in a declining market.
3Earnings on non-qualified distributions are subject to federal income tax and may be subject to 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.
4Rollovers from another state's 529 plan are not eligible for the state income tax deduction.
5In the event the donor does not survive the 5-year period, a pro-rated amount will revert to the donor's taxable estate.
6You should consult with a tax advisor before using UGMA/UTMA assets to open a 529 plan account.
7Matching grants are subject to the availability of funds and can be reduced or stopped at the discretion of Bank of North Dakota.

Ascensus Broker Dealer Services is the distributor of the North Dakota College SAVE plan, Learn more about Ascensus Broker Dealer Services, Inc. on FINRA's BrokerCheck.

For more information about North Dakota's College SAVE Plan (College SAVE), call 1-866-SAVE-529 (1-866-728-3529) or click here to obtain a Plan Disclosure Statement. Investment objectives, risks, charges, expenses, and other important information are included in the Plan Disclosure Statement; read and consider it carefully before investing. Ascensus Broker Dealer Services, Inc. (ABD) is Distributor of the College Save.

Before investing in any 529 plan, you should consider whether your or the designated beneficiary's home state offers a 529 plan that provides its taxpayers with state tax and other benefits that are only available through the home state's 529 plan. You also should consult your financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state's 529 plan(s), or any other 529 college savings plan, to learn more about those plans' features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

College SAVE is a 529 plan established by the State of North Dakota. Bank of North Dakota (Bank) acts as trustee of College SAVE Trust, a North Dakota Trust, and is responsible for administering College SAVE Trust and College SAVE. ABD, the Plan Manager, and its affiliates, have overall responsibility for the day-to-day operations of the Plan, including recordkeeping and marketing. The Vanguard Group, Inc. (Vanguard) provides underlying investments for the Plan. The College SAVE's Portfolios, although they invest in mutual funds, are not mutual funds. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.

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

Not FDIC Insured. No Bank, State or Federal Guarantee. May Lose Value.

Vanguard and the ship logo are trademarks of The Vanguard Group, Inc. Upromise is a registered service mark of Upromise, Inc. All other marks are the exclusive property of their respective owners. Used with permission.