529 Comparison

529 Maryland College Savings Plan

The 529 College Savings Plan of Maryland includes two programs from which to choose.

  • Maryland Prepaid College Trust
  • Maryland College Investment Plan

The Maryland Prepaid College Trust allows Maryland families to prepay college tuition by purchasing years of college now. Buy it at today's price and it will pay for tuition whenever the beneficiary is ready for college. College costs have been rising over the last several years at a pace far greater than inflation, so this Maryland 529 plan can be advantageous to those who enroll.
Purchase a Maryland Prepaid contract and it will guarantee to pay for tuition and mandatory fees at Maryland public colleges and universities. Should the beneficiary decide to attend a private or out of state school, the funds can be used both in Maryland and around the country. Full tuition payment is not guaranteed then, but the fund will pay the weighted average tuition of Maryland's public colleges.

One nice feature of the Maryland 529 Prepaid Plan allows the funds to be used for expenses such as books, fees or room and board if the beneficiary receives scholarships or grants and doesn't need the full amount for tuition and fees.

Payment Plans

University Plan You may purchase from one semester up to five full years at a four year college.
Community College Plan Purchase one or two years at a Maryland community college. Should the beneficiary decide to go to a four year school instead, the amount of the weighted average cost of community colleges can be credited towards tuition amd fees.
Two and Two This payment plan allows you to buy two years at a community college and two years at a four year school.

Payment Options

Don't have the money to pay up front? Not a problem. Although you can buy with a one time lump sum payment, you can also choose to pay with annual payments, 60 equal monthly payments, or monthly payments that can be stretched out over a longer period of time leading up to the student's college entry year. With these payment plans, down payments of 25%, 40% or 55% are required.

The Maryland College Investment Plan (MCIP) is a 529 program managed by T. Rowe Price that allows you to save for anyone's college education with only a $25 minimum deposit. MCIP has many different investment possibilities, including eight enrollment based portfolios which use aggressive investments for younger beneficiaries and move towards more conservative allocations as they approach college age. Also available are five fixed portfolios ranging from 100% stocks to 100% moneymarket. There are no guarantees with this Maryland 529 Plan and the account value will fluctuate up or down depending on the individual investments chosen.

Your investment in the 529 College Savings Plan of Maryland will grow federal tax-deferred. 529 owners who are Maryland taxpayers can deduct up to $2,500 per year from their Maryland State income tax return. If you own more than one plan for multiple beneficiaries, you can deduct up to $2,500 for each. The deductions for larger deposits can saved and used in upcoming years. Unlike the Prepaid College Trust, which only covers tuition and fees, funds invested in the 529 Maryland College Investment Plan can also be used for various other educational expenses like room and board, books, supplies and equipment. Qualified withdrawals will also be Federal and state tax free.

For more information on Maryland's 529 plan options, visit http://www.collegesavingsmd.org/.