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Treasurer promises quick resolution as he takes over embattled 529 savings plan

State contributes $250/500 to Maryland 529 college savings accounts
Posted at 4:54 PM, Jun 01, 2023
and last updated 2023-06-02 14:00:55-04

ANNAPOLIS, Md. — The State Treasurer’s Office takes over the Maryland 529 College Savings Plan today.
Account holders and the Maryland 529 prepaid trusthave been going back and forth for months over interest payments.

The trust sent out statements at the end of 2021 with some accounts showing their money doubled since they opened it.

Then the prepaid trust froze accounts and only allowed people to access what they put in while their accounts were being recalculated.

The legislature stepped in and decided to give the college savings plan to the treasurer’s office.

Since Treasurer Dereck Davis knew he was taking over Maryland 529, his office started working with current employees and the board to figure out what the issue was.

He found a miscommunication over when interest payments would increase between the board and either the staff or the vendor.

“It got misconstrued from being from Nov. 1, 2021, forward to when the accounts were opened. Nobody wants to hear that, I get it," said Davis.

That miscommunication is the difference between thousands of dollars for those with prepaid trust accounts.

The account holders we’ve talked with all want their money restored to the balances they saw before the board froze them.

Treasurer Davis doesn’t know if that’s going to happen.

“What they wanna know is are they going to get their money and we’re going to find out, right now we’re working through it, we’re going through our processes but we’re going to find out exactly how much they’re entitled to and we’re going to make every effort. I’m going to bend over backward to try and get them that FAFSA amount," said Davis.

Parents with students in college now are worried about taking the money out to use for tuition until the issue is resolved.

Treasurer Davis says it’s a personal decision parents have to make but he’s working with in-state universities to alleviate some of the pressure.

“If they can work with these parents to give them time and withhold any penalties or negative consequences," said Davis.

He says most have been cooperative, adding that he can’t give an exact date for when his office will have this resolved.

“What I can tell them is we’re targeting having this ready to go by the start of the semester but I can’t give a date at this point in time," said Davis.

Account holders with general questions can direct them to the treasurer’s office.

Intuition or T. Rowe Price will handle questions on specific information about your account.

The treasurer promised his office will be transparent throughout the process and is working diligently to get it revolved.