529 College Savings Plans in Florida

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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?

Annual fees associated with the the Florida 529 Savings Plan vary based on investment option. This fee can range from 0.02% to 0.77% of your assets. These fees are 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 money grows tax deferred. 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. 

The SECURE Act recently expanded qualified education expenses to include the costs of apprenticeship programs. In addition, up to $10,000 can be withdrawn tax-free to cover the beneficiary’s student loan debt. But keep in mind the latter is a lifetime cap. 

You can also withdraw $10,000 from 529 plans tax free at the federal level to pay for tuition and mandatory fees at public, private and religious K-12 schools. But be sure to check with a local accountant to see how this withdraw may affect your state tax return. 

Still, 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. 

The age-based portfolios in the Florida 529 utilize passive and active investing strategies. 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. 

You can also choose from static portfolios. The asset allocations on these portfolios, tailored toward different risk levels, stay constant. 

In addition, you can contribute toward individual funds. Each of these invests in a particular asset class based on a specific risk level.

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. 

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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 state 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 option offers different types of plans. You can choose from the following

• 2-Year Florida College Plan (Best for an associate's degree)
• 4-Year Florida College Plan (Best for a bachelor’s degree)
• 2 + 2 Florida Plan (Best for starting in community college and earning a bachelor’s degree at a state university)
• 1-Year Florida University Plan (Best for paying for a bachelor’s degree, one year at a time as budget allows)
• 4-Year Florida University Plan (Best for earning a bachelor’s degree at one of Florida's top 12 universities)

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. So 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 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 2020-2021 enrollment period spanned from $53.70 to $180.51.

Always check with the Florida Prepaid Plan website or call them directly 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 top state university.
• Optional University Dormitory Plan Add-On: A 1-year University Dormitory Plan covers a standard, double-occupancy, air-conditioned dormitory room at a state university in Florida (Payments start at $47.89 a month).

The dormitory plan can be added to all plan types except for the 2-Year Florida College Plan and the 4-Year Florida College Plan.

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.

Check Out Other 529 Plans

You do not have to live in Florida to invest in its 529 plan. Take a look at these other states' 529 plans.