West Virginia – Saving For College in 2023
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.
West Virginia has its own state-operated 529 plan called SMART529 WV Direct College Savings Plan. It is important to note that your child does not have to go to a WV 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!
West Virginia 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 West Virginia as well. West Virginia's higher education costs rose by 52.8% in just the last 10 years, ranking as the 12th highest state.
The table below shows the average one-year costs last year (2022) for different types of West Virginia 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 | 21 | $0 | $0 | $7,750 | $8,326 |
| Private | 4 year | 13 | $0 | $0 | $0 | $0 |
| Public | 2 year | 27 | $0 | $0 | $0 | $0 |
| Public | 4 year | 13 | $0 | $0 | $0 | $0 |
These costs rise every year. Rising tuition is a major driver of these increased higher education costs. Tuition at a 4-year university in WV rose 27% (ranked 4th in the US), while a 2-year or trade school increased their tuition by 17 percent.
529 Tax Benefits for West Virginia Residents
West Virginia offers tax benefits and deductions when savings are put into your child's 529 savings plan.
| For single filers: | No Limit |
|---|---|
| For joint filers: | No Limit |
Best 529 Plans in West Virginia
West Virginia’s 529 plan selection includes two direct-sold 529 college savings programs and one advisor-sold 529 plan. On a direct-sold basis, the SMART529 Select plan features funds from Dimensional Fund Advisors (DFA), while the SMART529 WV Direct plan (available only to WV residents or beneficiaries) primarily offers Vanguard index funds. West Virginia’s advisor-sold plan, The Hartford SMART529, primarily utilizes mutual funds from Hartford Funds, as well as additional underlying investments from iShares (BlackRock), MFS, and Invesco. West Virginia's prepaid tuition plan is closed to new enrollment and will terminate in June 2022.
| State Plan Name: | SMART529 WV Direct College Savings Plan |
|---|---|
| Minimum Contribution: | $0 |
| Maximum Contribution: | $400,000 for all plan types |
| Fees: | The Smart529 Select and The Hartford Smart529 plans have a $25 annual maintenance fee. There’s a sales charge for The Hartford Smart529 as account holders work with a financial adviser to choose investments. This charge varies by investment options. |
West Virginia 529 Plan Statistics
There are 120,024 registered schools in West Virginia with a total value of $2,694,626,184. That is an average of $22,451 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!