State contributes $250/500 to Maryland 529 college savings accounts

State contributes $250/500 to Maryland 529 college savings accounts
Posted at 12:23 PM, Dec 10, 2018
and last updated 2018-12-10 12:23:13-05

Thousands of future college applicants will get a hand paying for school thanks to Maryland College Investment Plan and its 2018 Save4College State Contribution Program. 

More than $6.3 million in state funding will be doled out in $250 and $500 contributions to the Maryland Senator Edward J. Kasemeyer College Investment Plan accounts of 13,381 eligible applicants, according to a press release by Governor Larry Hogan's Office.

Designed to help families start saving for college early in a child's life, the Save4College State Contribution Program was established in 2016 with a particular focus on helping low- and middle-income households amass the funds needed to send a child to college. The recently announced contributions are eligible for families who started a Maryland College Investment Plan between Jan. 1 and June 1, 2018 and made the minimum contribution to the account.

To be eligible for the State Contribution Program:

  • The account beneficiary must be a Maryland resident.
  • The account holder's state taxable income must not exceed $112,500 for an individual and $175,00 for a joint-filing couple.
  • The account must have been opened after Dec. 31, 2016.
  • The account holder made the required minimum contribution of $25, $100, or $250, depending on the account holder's income bracket.

The 2019 application period for the program begins Jan. 1 and runs through May 31. More info can be found on the Maryland 529 website.

The program saw growing success in 2018, as applications rose 400 percent, according to the statement. Since funding for the program is limited by the state budget, Governor Hogan agreed to increase state contributions so that all eligible applicants can get their yearly contribution. 

Hogan also announced he would reintroduce the Student Debt Relief Act during the 2019 legislative session. The bill would allow state residents to deduct 100 percent of the interest paid on student loans from state income taxes. It would also expand the Maryland Community College Promise Scholarship Program to include four-year, public institutions in the state. Qualifying students who graduated from a community college with an associate's degree and maintained a 2.3 GPA or higher can receive free tuition for the remaining two years of their schooling.