So, you’re entering college (or getting ready to) and you’ve got your Florida 529 Savings Plan and/or Florida College Prepaid Plan in hand. That’s a very good thing, but you may be wondering how to take advantage of your college savings, particularly how to use it and what your plan(s) covers. No problem, we’re here to help.
It is easy to use your Florida 529 Savings Plan at colleges nationwide. The Account Owner just submits a Withdrawal Request for the desired amount. You can do this online at Account Holder Resources or using our Withdrawal Request Form. You’re then free to use the withdrawals tax-free as long as they are spent on qualified educational expenses wherever you choose to go to school. Whether it’s a lease on a new apartment, a stack of textbooks or countless other items—as long as it’s a qualified educational expense you’re in good shape.
If you have a Florida Prepaid College Plan, you may not know much about it. Chances are it was started before you could even write your own name. We’ll help get you up to speed below on what the plan covers, its key features and how the school you go to gets paid.
Tuition is just one expense for a college education. All 28 Florida Colleges and 12 State Universities charge mandatory fees, known as Local Fees. The 12 State Universities also charge a mandatory Tuition Differential Fee, which was approved by the 2007 Florida Legislature. Florida Prepaid College Plans with a contract year of 2011 or later include the cost of these mandatory fees.
Prior to the 2010-2011 Open Enrollment Period, the Florida Prepaid College Board sold separate Prepaid Plans to cover Tuition, Local Fees and the Tuition Differential Fee individually. All 2 + 2 Tuition Plans and 4-Year University Tuition Plans purchased during the 2006-2007 Open Enrollment Period or earlier are exempt from the Tuition Differential Fee, but unless you have a Local Fee Plan, you will still be responsible for those fees. The only way to know the specifics of your plan is to login to your account. You can create an account for yourself, or check with the Account Owner for information on your specific plan(s).
Here are several key features of the plans to familiarize yourself with:
Absolutely! The value of your plan can be applied at an accredited, postsecondary educational institution offering credit toward a bachelor’s degree, an associate’s degree, a graduate-level or professional degree, or another recognized postsecondary degree, including certain proprietary institutions and postsecondary vocational schools. The institution must be eligible to participate in U.S. Department of Education student aid programs and must qualify under Section 529 of the Internal Revenue Code.
Need help identifying eligible institutions? Just use the Free Application for Federal Student Aid (FAFSA) Federal School Code search available at https://fafsa.ed.gov/FAFSA/app/schoolSearch?locale=en_EN.
Students planning to attend an eligible private or out-of-state institution must submit a Transfer Authorization request before benefits will be paid to a private or out-of-state school. Transfer Authorizations may be submitted online by the Account Owner or the Beneficiary. Please log in to your account at myfloridaprepaid.com/my-account, choose the Plan Details tab and click on See Usage.
When Florida school rates are available at the start of each semester, then Florida Prepaid will know the benefit amount that can be paid per credit hour from your plan to the school of your choice.
It is important to note that the Transfer Form will require you to select how Florida Prepaid will make payments to your school, either Restricted or Unrestricted. Since out-of-state and private schools have different tuition rates than in-state public schools, Florida Prepaid can either pay the equivalent of the in-state public school rate to your school for the number of credit hours enrolled or pay the actual invoiced amount, up to the entire value of the plan.
Please read the options carefully, as the Unrestricted payment option can deplete your plan at a much faster rate than a Restricted payment option, since it will be paying actual invoiced amounts rather than what would have been paid to a Florida public school. Please call Customer Service if you have any further questions.
Payment is automatic as long as you let the school know that you have a Prepaid Plan. The school will bill Florida Prepaid directly each semester for the tuition and fees covered by your plan(s). Payment is issued by Florida Prepaid directly to the school.
Students planning to attend an eligible private or out-of-state institution must complete a Transfer Authorization request before benefits will be paid. The Transfer Authorization includes additional details about how these schools are paid.
Transfer Authorizations may be submitted directly online by the Account Owner or Student. Please log in to Account Holder Resources, choose the Plan Details tab, and click on See Usage. Or you may download the Transfer Authorization request at Forms.
One of the best things about Prepaid Plans is that they may be used at any eligible educational institution. The value of the plan purchased may be applied toward the costs at the school the student chooses to attend. For example, benefits available under a 2-Year Florida College Plan or a 4-Year Florida College Plan can be paid to a State University. Similarly, benefits available for a 4-Year Florida University Plan or a 1-Year Florida University Plan can be paid to a Florida College.Please keep in mind, in the first example above, that Florida College Plan benefits paid to a State University will deplete at a faster rate because the cost per credit hour at a State University is generally higher that the cost of a credit hour at a Florida College. The student will be responsible for any difference not covered by their plan.
The plan will pay the amount otherwise paid for an approved dormitory to any eligible university-held residence, including a fraternity or sorority that is university-held. The amount paid may not exceed the cost of dormitory fees covered by the plan at the institution. The student will be responsible for any amount not covered by their plan.The plan will also transfer funds to either a state college that directly operates one or more dormitory residences or to a state college direct-support organization (DSO) that operates dormitory residences. The plan will pay either the fees charged by the state college or DSO, or the maximum fees charged for state university dormitory residence, whichever is less. The student will be responsible for any amount not covered by their plan.
A Dormitory Plan may not be used for privately owned housing or apartments. However, the Account Owner may request a refund for the basis of unused Dormitory Plan benefits.
Yes. A 1099Q tax form will be provided in January of each year to Beneficiaries who have used their Prepaid Plan benefits during the previous calendar year, as well as to Account Owners who have received a scholarship refund or reimbursement during the previous calendar year.If you have elected for electronic delivery, 1099Q forms will be available online at Account Holder Resources, under the Your Documents tab. Otherwise, a 1099Q will be mailed.
For specific information regarding the 1099Q, please consult a professional tax consultant or certified public accountant.
Your parents, grandparents or the benevolent stranger made an outstanding choice that will help you avoid some or all of the student loan debt that so many graduates have to deal with. It’s a great idea to thank them and then get started using your college savings!