Vermont – Saving For College Report in 2022

We discuss the tax benefits, trends, do's and don'ts and various plan options of setting up a 529 college savings plan in Vermont

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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.

Vermont has it's own state-operated 529 plan called Vermont Higher Education Investment Plan. It is important to note that your child does not have to go to a VT college or university in order 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!

Vermont 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 looking for ways to help offset these future higher education costs.

These rising costs are hitting closer to home in Vermont as well. Vermont's higher education costs rose by 30.1% in just the last 10 years, ranking as the 33th highest state.

The table below shows the average one-year costs in 2020 for different types of Vermont colleges and universities.

OwnershipDegreeSchoolsPublic Out-of-State TuitionPublic In-State TuitionMedian DebtTotal Annual In-State Cost
Private 2 year 2 $0 $0 $0 $0
Private 4 year 17 $0 $0 $0 $0
Public 2 year 1 $0 $0 $0 $0
Public 4 year 5 $0 $0 $0 $0

These costs rise every year. Rising tuition is a major driver in these increased higher education costs. Tuition at a 4-year university in VT rose 14% (ranked 35th worst in the US), while a 2-year or trade school increased their tuition by 20 percent.

529 Tax Benefits for Vermont Residents

Vermont offers tax benefits and deductions when savings are put into your child's 529 savings plan.

For single filers:10% on up to $2,500/yr per beneficiary
For joint filers:10% on up to $5,000/yr per beneficiary

Best 529 Plans in Vermont

Vermont’s 529 plan is managed by Intuition College Savings, LLC and features age-based and equity options utilizing Vanguard , TIAA-CREF and DFA funds.

State Plan Name:Vermont Higher Education Investment Plan
Minimum Contribution:$25
Maximum Contribution:Contributions are cut off once the total balance of all accounts for the beneficiary reaches $352,800. The funds continue to accrue earning, though.
Fees:0.39% annual asset-based management fee; $10 per year for anyone who wants paper statements mailed to them.

Vermont 529 Plan Statistics

There are 22,468 registered schools in Vermont with a total value of $414,263,717. That is an average of $18,438 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!