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529 College Savings Plans in Florida

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by Javier Simon Updated

Florida sponsors a direct-sold 529 college savings plan as well as a prepaid tuition 529 program. The direct-sold Florida 529 savings plan offers several investment portfolio options designed for savers at all risk levels, even though fees for some can be a bit higher than those in plans other states sponsor. And in the face of increasing college costs across America, the Florida Prepaid College Plan lets you lock in tuition at today’s prices even if they skyrocket by the time your child is ready for college. But the plan may not cover all required educational expenses. Even though Florida doesn’t sponsor an advisor-sold plan, you can still use SmartAsset’s SmartAdvisor matching tool to get paired with an expert who can help you create a customized college savings strategy.

Plan Name Program Type How to Enroll Fees
Florida 529 Savings Plan Florida 529 Savings Plan logo Read Review College Savings Plan Direct-Sold 0.39% - 0.75%
Florida Prepaid Florida Prepaid logo Read Review Prepaid Tuition Plan Direct-Sold Varies

Florida 529 Savings Plan

Florida 529 Savings Plan

The Florida 529 Savings Plan allows you to begin investing in your child’s educational future as early as possible with as little or as much as you want. There is no minimum contribution and you can deposit $418,000 total, which puts the Sunshine State on the high end of contribution maximums across the country. The plan offers various investment options for all types of savers. You can even invest in an age-based portfolio, which automatically changes its asset allocation to become less risky as your child gets closer to college—when your savings would matter the most. 

How Do I Enroll in The Florida 529 Savings Plan?

The easiest way to open an account with the Florida 529 College Savings Plan is enrolling online. You can do so in a few minutes if you prepare the following information about yourself and your beneficiary: 

  • Address
  • Birthdates
  • Social Security or tax identification numbers
  • Your bank account and routing number if making your first payment electronically 

You can also fill out a physical application and mail it out. Remember, you don’t have to be a Florida resident to open an account. The plan is open to any legal-age U.S citizen or legal resident with a valid Social Security or Tax Identification number. 

How Much Does the Florida 529 Plan Cost?

The Florida 529 Savings Plan charges an annual administrative fee based on the fees it pays out to investment managers, recordkeepers and other entities involved in the management of the plan. This fee varies based on your investment option and it currently ranges up to 0.75%. In addition, every investment option carries an underlying fund fee or expense ratio. Currently, these expense ratios stretch from about 0.39% to 0.75%—except for the money market portfolio, which has no underlying fund fees. These are all paid indirectly by being factored out of total assets in each portfolio, so your account faces a pro-rata share depending on the portfolio or portfolios you invest in. Still, the fees are very low to moderately high when compared with the investment options of direct plans sponsored by other states. 

Tax Benefits of The Florida 529 Savings Plan

When you invest in the Florida 529 Savings Plan, your earnings are not subject to federal income tax. This allows your money to make the most out of compound interest. In addition, withdrawals are tax free as long as you use them on qualified higher education expenses. 

However, any nonqualified withdrawals may be subject to taxation. The earnings portion of a nonqualified withdrawal will face federal income tax at your tax bracket in addition to a 10% penalty. You should consult a qualified tax advisor for information on how nonqualified withdrawals may affect your tax situation.  

What Are My Investment Options?

The Florida 529 Savings plan allows you to invest in a range of age-based portfolios. These automatically rebalance their asset allocation to become more conservative or less risky as your child approaches college. 

You can also choose a blended equity portfolio that invests entirely in stock funds or a balanced portfolio that invests in stock and bond funds. Asset allocations in these options don’t change.

In addition, you can contribute toward individual funds. Each of these invests in a particular asset class or a mix based on a specific risk level. So you can invest in multiple individual portfolios to design a customized investment strategy based on your risk appetite. 

In addition, you get to choose from actively managed and passively managed individual funds. Passive strategies tend to recreate the performance of a given index of different securities such as emerging market stocks. Fees tend to be low because of the “passive” nature of selecting assets for portfolios. Active strategies, on the other hand, aim to beat the market instead of mimicking it by incorporating different research and strategies in selecting what to invest in. 

How Do I Withdraw Money from Florida’s 529 College Savings Plan?

You can request a withdrawal online. You can direct payments to yourself, your beneficiary or an eligible educational institution. As far as 529 college savings plans go, eligible schools span from vocational schools to four-year universities. You can use 529 plan money on basically any school that accepts financial aid from the U.S. Department of Education, which even includes some foreign institutions. 

Your child can also use 529 funds with financial aid and scholarships. 

Florida Prepaid College Plan

Florida Prepaid

As tuition prices are projected to climb well into the next decade, many parents are turning to 529 prepaid tuition programs to reverse the damage and send their kids to school without a mountain of debt. The Florida Prepaid College Plan lets you lock in tuition and credit hours at Florida community colleges and universities at today’s prices. Based on the plan you choose, your child will be able to redeem a certain amount of credit hours at one of these institutions in the future even if tuition skyrockets by the time he or she is ready to go to college. 

Your child can use these benefits in combination with financial aid packages and scholarships.

That’s why these plans are potentially most effective if you open accounts when your child is very young and if he or she ends up using the benefits at a Florida college or a school in the Florida State University system. 

How Do I Enroll in the Florida 529 Prepaid Tuition Plan?

You can enroll online. The process should take a few minutes if you’ve collected the following details about yourself and your beneficiary: 

  • Address
  • Birthdates
  • Social Security or tax identification numbers
  • Your bank account and routing number if making your first payment electronically 

How Does The Florida Prepaid College Plan Work?

The Florida Prepaid College Plan offers different college plans, which span from one year at a Florida university to four years at a Florida university or a combination of two years at an in-state community college and two years at an in-state four-year university. 

You can choose to pay for your plan in one lump-sum or lock in a monthly payment. This means the price you got at enrollment sticks even if the actual price of tuition goes up as you save. 

In addition, your benefits are guaranteed by the state of Florida. So if you pay your four-year university plan in full by the time your child gets accepted into college, you can use that to cover tuition and fees at a four-year Florida university. Your child can redeem his or her benefits at any school you can use 529 plan funds at, but it may be a better idea to stick to a Florida school. The reason is that your plan is based on the prices of credit hours at Florida schools at the time of enrollment. So the plan can only cover what it's worth, and you’d be responsible for any difference at an out-of-state or private college. 

How Much Does the Florida 529 Prepaid College Plan Cost? 

Prices for each plan are set through an actuarial process that considers several factors, including current tuition prices, projected tuition inflation and investment expectations. The plan pools account holders’ money together and invests it in order to shore up funds so it can make its guaranteed payments. 

Certain variables determine plan prices, so they change each academic year or enrollment period. For example, monthly payment options during the 2017-2018 enrollment period spanned from  $55.42 to $186.28.

Always check with the Florida Prepaid Plan for current prices. 

What Are My Payment Options in Florida’s 529 Prepaid College Plan?

The Florida Prepaid Tuition Program offers several different types of plans and flexible payment options. You can pay for your plan in one lump sum or you can establish a monthly payment plan to cover it as your child grows up and gets closer to college. If you’re hesitant to open a multi-year plan, you can start out by setting up a one-year plan. You can add as many more years as you can comfortably afford in time. Below are the different payment plans. 

  • 1-Year Florida University Plan: Covers tuition and most fees for 30 credit hours generally needed for a bachelor’s degree at a Florida State University.
  • 2-Year Florida College Plan: Covers tuition and most fees for the 60 credit hours generally needed for an associate's degree or trade certification.
  • 4-Year Florida College Plan: Covers tuition and most fees for the 120 credit hours generally needed for a bachelor's degree at a Florida College.
  • 2 + 2 Florida Plan: Covers tuition and most fees for the 60 credit hours generally needed for an associate’s degree at a Florida College as well as the remaining 60 credit hours generally required for a bachelor’s degree at a state university.
  • 4-Year Florida University Plan: Covers tuition and most fees for the 120 credit hours usually needed for a bachelor's degree at a state university.
  • University Dormitory Plan: Covers on-campus housing and is available in 1-year increments (2 semesters) for a standard, double-occupancy dormitory room at any of Florida's 12 state universities.

Tax Benefits of Florida’s 529 Prepaid Tuition Plan 

The Florida Prepaid College Savings plan offers many of the same tax benefits as the Florida 529 College Savings Plan. So your contributions grow tax-exempt and you can use money in the plan tax-free for qualified higher education expenses. 

Your child can also use his or her benefits in conjunction with scholarships and financial aid. In fact, you can receive a refund for your plan if your child receives a full-ride scholarship. 

How Do I Withdraw Money from the Florida Prepaid College Plan?

Your child can begin redeeming his or her credits in the Florida Prepaid College Plan to cover tuition and fees as outlined in the plan type beginning the summer of the student’s projected year of college enrollment. Your child would have 10 years after that date to use his or her plan benefits. 

During the spring prior to your child’s expected date of college enrollment, your child will receive a First Time in College Notification, which will provide detailed information about how to use plan benefits. 

You don’t have to schedule payments, because Florida colleges and state universities directly bill the program each semester for the tuition and fees that are covered by the plan type you chose. The program issues payments directly to the school. 

However, students who plan to enroll in private or out-of-state institutions would have to fill a transfer authorization request form. You can download this document from your account online. If an institution requests student IDs and account information, you can print these online as well. 

But keep in mind that you're not limited to investing in just one of these plans. You can invest in both or even open accounts with out-of-state 529 plans. A financial advisor can help you create a personalized college savings road map by investing in or more 529 plans. If you’re not sure how to seek professional guidance, you can use our free SmartAdvisor matching tool. It connects you with advisors in your area based on your financial situation and goals.