Paying for Higher Education

Whether you’re a parent or you personally are looking to obtain a degree, it's easy to get sticker shock when reviewing education costs. With a price tag that's constantly rising, it may seem impossible to pay upfront or even someday pay off financial aid loans. Future students should apply for scholarships, grants and even consider schools with lower tuition fees. But two things ring true in nearly every situation - it's never too early or too late to start, and a dollar saved now is better than one borrowed later. You can even start a 529 account before you have children!

529 Plans

Named for Section 529 of the federal tax code, earnings on 529 investments are tax-deferred and become tax-free when used to pay for qualified higher education expenses.

Indiana offers one of the most generous up-front tax incentives for 529 contributors. Hoosiers can annually get a 20% credit on contributions worth up to $1,000. This credit is available to each taxpayer that contributes. That means the credit is available to account owners as well as third-­party gift contributors, such as parents, grandparents, and family friends.  

529s are incredibly flexible. Qualified expenses include tuition, room and board, books, fees, and computers at any school that's eligible to receive federal financial aid. Whether your child wants to become a doctor or a skilled tradesperson, 529 savings can be used to help them pursue their goals. But one thing to note is that 529 savings cannot be used to pay off student loans, so it’s better to save up in advance of pursuing a degree.  

Perhaps most importantly, 529 Plans are affordable and easy to use, with a variety of investment options and strategies to meet savers' needs. Here in Indiana, the CollegeChoice 529 program consists of three different plans:

  • CollegeChoice Direct - The Direct plan features quick online account setup and a low minimum contribution of $10. Year of Enrollment portfolios are set to automatically grow more conservative as the beneficiary gets older.
  • CollegeChoice Advisor - The Advisor plan offers access to a wider variety of investment options. As with any financial service involving professional assistance, the Advisor plan comes with slightly higher fees.
  • CollegeChoice CD - The CD plan resembles a traditional bank product in that it offers principal protection. Its streamlined lineup of FDIC-insured options includes one-, two-, and three-year fixed rate certificates of deposit (CD) and a savings account.


If you have questions about CollegeChoice 529 plans, call (866) 485-9415 or visit www.CollegeChoiceDirect.com to obtain a Disclosure Booklet, which includes investment objectives, risks, charges, expenses, and other important information.

It’s also a good idea to consult your financial, tax, or other advisor to learn more about how state-based benefits (or limitations) would apply to your specific circumstances.

Helpful Resources