LEARN

Types of Investments

The Texas College Savings Plan vs. Other Education Savings Options

Features The Texas College Savings Plan Coverdell Education
Savings Account
UGMA/UTMA Account
Beneficiary Age Limit None Can contribute until child reaches 18. Must spend assets by child’s 30th birthday 18 or 21, depending on state law
Account Owner Income Limit None Phases out for incomes between $95,000 and $110,000 if single, $190,000 and $220,000 if married None
Federal Tax Exemption For qualified withdrawals For qualified withdrawals None
Contribution Limit $370,000 per child1 $2,000 per beneficiary anually None
Account Control Parent/account owner Parent/account owner Child assumes control at legal age of majority
Beneficiary Flexibility Flexible beneficiary designation2 Flexible beneficiary designation2 May not be transferred
Financial Aid Impact Considered account owner’s assets Considered account owner’s assets Considered student’s assets
Asset Use Can be used for a broad range of higher education expenses Can be applied to elementary, secondary and higher education expenses Unrestricted, provided it is for the benefit of the minor
Gift Tax Treatment Qualifies for up to $15,000 ($30,000 for married couples) per child, or a combined five-year gift of up to $75,000 ($150,000 for married couples) Qualifies for up to $2,000 gift tax exclusion2 Qualifies for up to $15,000 ($30,000 for married couples) per child, or a combined five-year gift of up to $75,000 ($150,000 for married couples)
Estate Tax Treatment Considered removed from donor’s estate (partial inclusion if donor dies during the five-year election period) Considered removed from donor’s estate Considered removed from donor’s estate
Investment Flexibility Yes3 Yes Yes

1. The maximum contribution limit is currently $370,000 per Designated Beneficiary aggregated across all accounts in Texas sponsored 529 plans and cannot exceed this limit. Accounts that have reached the limit may continue to accrue earnings, but additional Contributions including those from Rollovers are prohibited. See the Plan Description and Savings Trust Agreement for details.

2. Changes in beneficiary are limited to qualified family members of the current beneficiary to avoid federal tax consequences.

3. Account Owner may only change how previous contributions and any earnings thereon are invested twice per calendar year or upon a change in beneficiary.