Here are some examples of questions that have recently been posted through this feature along with their responses from the College Savings Plans of Maryland:
Question - My two boys, ages 16 and 9, have existing ESA and UTMA accounts. Can they be rolled over to your 529 plan?
Response from the College Savings Plans of Maryland - Yes, ESA and UTMA accounts can be transferred to a 529 plan, including the two that Maryland offers (the Maryland Prepaid College Trust and the Maryland College Investment Plan). You would first need to open the 529 plan account (which you can do on our website or via a paper application) and you would then submit to us a rollover form along with a copy of a recent statement from the ESA/UTMA account(s). We will initiate the rollover of your current plan into the Maryland plan that you open.
Question - It looks like I missed the open enrollment this year for the Maryland Prepaid College Trust. Do I have to wait until December of 2008 to enroll my two children, ages 10 and 13 years old?
Response from the College Savings Plans of Maryland - It is likely that the next Maryland Prepaid College Trust enrollment period will begin on December 1, 2008 but I recommend checking our website over the summer and fall – we will have an exact date available at that time. The only enrollments that the Prepaid College Trust will accept from now until the beginning of our next enrollment period are for newborns under one year of age and existing account holders adding additional years or semesters.
Question - My daughter starts school in the fall. How do we begin to pull money out of her 529 College Savings Plans of Maryland account or eligible expenses?
Response from the College Savings Plans of Maryland - If your daughter has a Maryland Prepaid College Trust (MPCT) account, the account holder will receive a Benefits Claim form in the mail in June. This form needs to be signed by the account holder and returned to the MPCT along with a copy of the tuition invoice from the university. The MPCT will then pay the university directly. This step needs to be completed every semester your daughter attends college.
If your daughter has a Maryland College Investment Plan (MCIP) account, the account holder will need to complete the following distribution form (which can be found on our website) and mail it to the MCIP – T. Rowe Price will then issue a check for the amount requested: http://65.36.246.229/cspmd/documents/MCIP_Distribution_Form.pdf.
Question - I have two children for which I have purchased 4 year University Plans for each. My oldest child used about 2 years worth of her benefits and chooses not to return to college and my younger child will be starting college this fall. Can the remainder of the older child's benefits be appiled to cover expenses (room and board) for the younger child?
Response from the College Savings Plans of Maryland - You have two options as to what you can do with your oldest child’s remaining two years of benefits – you can transfer one year to your younger child (so that child would then have a total of five university years, which is the maximum per beneficiary in the Prepaid College Trust) and then transfer the remaining year to the Maryland College Investment Plan. You can also transfer both years of benefits that your oldest did not use to the Maryland College Investment Plan – funds in a Maryland College Investment Plan account can be used towards any eligible higher education expenses such as room and board, books, fees, etc. In either case, the remaining two years of tuition must be transferred to the Maryland College Investment Plan first in order to pay out towards other college expenses.
Question - What happens to our (Maryland Prepaid College Trust) plan if we move out of state?
Response from the College Savings Plans of Maryland - If you have an account with the Maryland Prepaid College Trust (MPCT) and you move out of state, you can keep your account here in Maryland; you would no longer, however, be eligible for the $2,500/year Maryland state tax deduction nor would you be able to purchase additional years of tuition. The MPCT would still pay the full in-state tuition and mandatory fees at a Maryland public university and the weighted average tuition towards a Maryland private or out-of-state university. The MPCT would not cover any out-of-state student fees if the child attended a Maryland public university. You may also choose to "rollover" your MPCT account to the 529 plan offered by the State in which you are moving to.
Question - What happens to our (Maryland Prepaid College Trust) funds if the student decides not to attend college?
Response from the College Savings Plans of Maryland - If your child decides not to attend college, you have several options: you can change the beneficiary on the account, you can transfer the account to the Maryland College Investment Plan or you could request a refund. The way refunds are calculated is if the account has been active for less than three years, you would receive back your full contribution plus or minus 50% of any earnings, and if the account has been active for more than three years, you would receive back your full contribution plus or minus 90% of any earnings. You would have to reverse the $2,500/year Maryland state income deduction you had previously claimed and you would also receive a 10% federal tax penalty on any earnings. Please keep in mind that the Maryland Prepaid College Trust also allows account holders to delay the use of their benefits for up to 10 years plus any active time served in the military if the student reverses their decision and decides to attend college.
Question - My daughter is enrolled at Frostburg State University and is studying abroad at one of their programs during the next school year. Can I still use my Prepaid Plan and my Investment Plan?
Response from the College Savings Plans of Maryland - The Maryland Prepaid College Trust and the Maryland College Investment Plan can be applied to international studies provided they are offered by an institution that is accredited by the U.S. Department of Education. In this case of studying abroad via a program offered by Frostburg State Universty, benefits in either plan can be used.
Question - Do rollover contributions count towards the $2,500 per account or beneficiary Maryland State income deduction?
Response from the College Savings Plans of Maryland - Yes, rollover contributions do count towards the $2,500/year Maryland state tax deduction. If you have a Maryland Prepaid College Trust account, you can deduct up to $2,500/year per account until you have reached the full amount that you have contributed to the account (including any rollover contributions). If you have a Maryland College Investment Plan, you can deduct up to $2,500/year per beneficiary up to $27,500 or a total of 11 years.
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