District of Columbia – Saving For College in 2024
As parents, grandparents and students, we know college is coming and that we're somehow going to have to pay for it someday. Fortunately, we have many options available to us, including savings bonds, the stock market and 529 plans. Starting a 529 account now is always the best option, no matter how old you (or your child) is. While playing the stock market may yield higher returns on your investment, placing your money into a 529 plan allows it to grow in a tax-free environment. One study even found that when the federal tax benefits were taken into consideration, 529 plans outperformed their benchmarks in every category.
District of Columbia has its own state-operated 529 plan called DC 529 College Savings Program. It is important to note that your child does not have to go to a DC college or university to use this savings account. 529 plan funds can be used at any accredited college or university across the nation, including some K-12 private schools!
District of Columbia College Costs & Trends
Colleges and universities across the United States experienced increased operating costs of 2.5% in 2019. This most recent inflation figure was down slightly from the 2.9 percent increase in 2018 and 3.4 percent increase in 2017. These costs are forwarded directly to students in the form of higher tuition and living expenses. As these costs steadily rise every year, parents are investigating how to help offset these future higher education costs.
These rising costs are hitting closer to home in District of Columbia as well. District of Columbia's higher education costs rose by 0% in just the last 10 years, ranking as the 0th highest state.
The table below shows the average one-year costs last year (2023) for different types of District of Columbia colleges and universities.
| Ownership | Degree | Schools | Public Out-of-State Tuition | Public In-State Tuition | Median Debt | Total Annual In-State Cost |
|---|---|---|---|---|---|---|
| Private | 2 year | 4 | $9,900 | $9,900 | $0 | $9,333 |
| Private | 4 year | 16 | $34,537 | $34,537 | $24,579 | $26,035 |
| Public | 4 year | 2 | $12,092 | $5,756 | $24,699 | $17,548 |
These costs rise every year. Rising tuition is a major driver of these increased higher education costs. Tuition at a 4-year university in DC rose 15% (ranked 31st in the US), while a 2-year or trade school increased their tuition by 0 percent.
529 Tax Benefits for District of Columbia Residents
District of Columbia offers tax benefits and deductions when savings are put into your child's 529 savings plan.
| For single filers: | $4,000/yr |
|---|---|
| For joint filers: | $8,000/yr |
Best 529 Plans in District of Columbia
Ascensus College Savings took over the management of the DC College Savings Plan in March 2017. The program was formerly sold nationally through financial advisors and on a load-waived basis to District of Columbia residents. The plan is now sold nationally on a direct-sold basis only and features a menu of age-based and static portfolio options featuring funds from a number of fund families.
| State Plan Name: | DC 529 College Savings Program |
|---|---|
| Minimum Contribution: | $25 |
| Maximum Contribution: | up to $500,000 across qualified accounts for a single beneficiary |
| Fees: | 0.25% asset management fee; 0.05% state administrative fee; $10 annual maintenance fee for D.C. residents; $15 annual maintenance fee for non-residents; The annual maintenance fee gets waived on accounts totaling $15,000 or more. |
District of Columbia 529 Plan Statistics
There are 28,085 registered schools in District of Columbia with a total value of $685,505,473. That is an average of $24,408 per account. Unfortunately, 529 plans are not widely used... a 2018 study by Edward Jones found that only 29 percent of Americans were even aware that 529 savings plans exist!