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Alaska 529 Plan Review

How Does Alaska 529 Work? 

The Alaska 529 works like a mutual fund. The plan is managed by the T-Rowe Price. It offers a general stock fund that covers different education programs and a University of Alaska system education fund. The type of investments picked for the plan is based on a student's time horizon. A parent can start the plan for as little as $25 or by putting their PFD in it. The limit for a married couple is $150,000 per year and for divorced or separated parents is $75,000 each. The best feature of the Alaska 529 plan is that the student can attend college anywhere in the USA.

The plan is popular enough that Dr. Kara Dillard who lives in Bridgewater, VA has an Alaska 529, in addition to a Virginia 529.

@virginia529: Please add daily gains/loss performance info to your dashboard! Unless I'm logging in daily, I can't see the actual performance vs. contributions of my account. My other 529 w/ @Alaska529 has an awesome dashboard!

— Dr. Kara Dillard (@karadillard) January 19, 2021



Enrollment Requirement  

There is no residency requirement to enroll.


Educational Programs Funded By Alaska 529

  • K-12 Education - Alaska 529 allows the distribution of $10,000 per beneficiary, per year to fund K-12 tuition at a public, private or religious school. This program is beneficial for parents who like to send their children to private or religious schools.
  • Apprenticeship - More and more students are opting for apprenticeships over a four-year college degree. The plan allows a student to pay books, equipment, fees, and supplies for on-the-job training with classroom instruction. The apprenticeship program must be registered with the U.S. Department of Labor.
  • Vocational School - Trade schools are popular once again. The Alaska 529 plan can be used to pay for a vocational school with a Federal School Code. A future tradesman/woman can pay for all qualified expenses including tuition, fees, housing, meal plans, books, supplies, computer technology, and equipment.
  • Graduate and Undergraduate College - The 529 plan can pay for qualified expenses including tuition, fees, housing, meal plans, books, supplies, computer technology, and equipment at any college or university in the U.S. as well as some international schools. 
  • Loan Repayment - If the beneficiary of the plan or their sibling has an outstanding loan, they can pay up to $10,000 from the Alaska 529.  
  • Continuing Education - The reality today is that to stay competitive in the job market we have to continue upgrading our skills. That may require us to go back to school to pursue a continuing education program or a degree program. The Alaska 529 plan can pay for tuition, fees, housing, meal plans, books, supplies, computer technology, and equipment at a qualified institution. 


Qualified Colleges

  • University of Alaska - All branches
  • Alaska Pacific University
  • Other state colleges
  • Other colleges and universities in the US


Benefits of Alaska 529

  • Tax-Deferred - All earnings on the plan are tax-deferred. The qualified distributions are also exempt from federal taxes if residency requirements are met.
  • Can be funded with a PFD - The Permanent Fund Dividend is an annual dividend that is paid to Alaska residents from investment earnings of mineral royalties. It allows for Alaskans to share in a portion of the State minerals revenue. You can use the PFD to fund Alaska 529.
  • Anyone can contribute - Anyone whether related by blood or not can contribute up to $15,000 per year to your plan. It includes parents, grandparents, guardians, aunts, uncles, and cousins.  
  • Supports in-state and out-of-state schools - You can use your savings for schools that are inside Alaska or in other states.
  • Non Residents - Non-residents can get in-state tuition for any school in the University of Alaska system funded with an Alaska 529 plan.


How to Enroll 

You can enroll by going to the Alaska 529 website.


Criticism for Alaska 529 Plan

  • Since the plan mainly invests in the stock market, the plan beneficiary may not have enough funds due to the  market fluctuations. 
  • Some distributions may be taxable.
  • It gives an unfair advantage to the rich since a couple can invest up to $150,000 per beneficiary. 


Co-parents and College Savings Plan

The Alaska 529 plan is a great college saving plan for residents of Alaska since it allows them to attend a school anywhere in the US and fund it using their PD. It can also be a good option for divorced and separated parents residing in different states, with one parent living Alaska.  


Since co-parents have separate finances and only one person can start a Alaska 529 plan, both parents can start one separately for the same child, and fund half of the balance.  This way, if the child decides not to attend college or they need to withdraw funds for some other reason, or assign a different beneficiary for their portion, they can do so easily.  Alternately, one parent can fund the entire plan and the other one can reimburse them for their half.  Another option is that they can start 529 plans in different states and fund half each.


If neither of the coparents can afford to fund an education plan, your child can also apply for an Alaska 529 scholarship.

Here's a story about a little scholarship account we give out every year.
Thank you @alena__naiden!

— Alaska 529 (@Alaska529) December 21, 2021



Comparison With Other 529 Plans

Feature Alaska California Washington
Max Contribution $415,000


 4 year tuition
Full In-state Tuition Yes Yes Yes
Full Out-of-state Tuition Yes Yes No (Partial)
State Tax Exemption N/A Yes N/A
Federal Tax Exemption Yes Yes  Yes
Primary Contributors Anyone Anyone Anyone
Student Loan Repayment Option Yes Yes No
Plan Review   Link Link



What is a 529 plan?


Warning:  This post is neither financial, health, legal, or personal advice nor a substitute for the advice offered by a professional. These are serious matters, and the help of a professional is recommended as it can impact your future.

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