Benefits & Tax Advantages

Invest in your loved one’s future with the Minnesota College Savings Plan.

Families hope to see their child or loved one graduate from college but it takes more than hope to get there. The Minnesota College Savings Plan is the state of Minnesota’s official Section 529 college savings plan. It can help your family save for future higher education expenses.

Learn about the benefits of the Minnesota College Savings Plan, including:

Affordable and Easy to Contribute

Low Minimum Contribution
It is easy to open a Minnesota College Savings Plan account. The minimum contribution is $25 per beneficiary. There are many ways to contribute including personal check, electronic funds transfer, automatic contribution plan from your bank account, payroll deduction, or a transfer of funds from another qualified 529 college savings plan. The minimum contribution is $15 (per pay period; per investment option, per beneficiary) when contributions are made using payroll deduction.

No Income Limitations
There are no account owner or account beneficiary income limitations.

High Maximum Account Contribution Level of $235,000
You can contribute as much as $235,000 per beneficiary account as long as the total balance of all accounts for that beneficiary does not exceed $235,000. Accounts reaching the maximum account balance limit may continue to accrue earnings but no additional contributions may be made.

Tax Advantages

> See the Difference Tax Advantaged Savings Can Make.

Any earnings on your account will be federal and state income tax-free if account proceeds are used to pay for qualified college expenses.

Federal Estate and Gift Tax Benefits
Contributions to a Minnesota College Savings Plan account may reduce the taxable value of your estate. For example, contributions to the Minnesota College Savings Plan, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $13,000 per donor ($26,000 for married contributors), per beneficiary. If an account owner's contribution to a Minnesota College Savings Plan account for a beneficiary in a single year exceeds $13,000 ($26,000 for married contributors), the account owner may elect to treat up to $65,000 of the contributions, or $130,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion.

Flexible Features

Anyone May Open an Account
Parents, grandparents*, other relatives and friends who are U.S. citizens or resident aliens and at least 18 years of age may open an account and contribute to a Minnesota College Savings Plan account on behalf of a beneficiary. Minnesota residency is not required. However, investors residing outside of Minnesota should consider their own state's plan first as it may have tax advantages only available through that state's plan.

Funds Can be Used at Eligible Schools Nationwide
Whether your beneficiary decides to go to a private or public college or university, in-state or out-of-state, trade or graduate school, funds in the account may be used for any type of degree program at any eligible higher educational institution in the nation and many abroad, not just Minnesota institutions.

Funds Can be Used for a Variety of Qualified Higher Education Expenses
Funds can be used for tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs, and certain expenses for "special needs" students.

The cost of room and board may be treated as qualified higher education expenses only if it is incurred during an academic period in which the beneficiary is enrolled or accepted for enrollment in a degree, certificate, or other program which leads to a recognized educational credential awarded by an eligible educational institution, and during which the beneficiary is enrolled at least half-time. (Half-time is defined as half of a full-time academic workload for the course of study the student is pursuing based on the standard at the beneficiary’s eligible educational institution.) The amount of room and board expenses that may be treated as qualified higher education expense are generally limited to the room and board allowance applicable to the student that is included by the eligible institution in its “cost of attendance” for purposes of determining eligibility for federal education assistance for that year. For students living in housing owned or operated by the eligible educational institution, if the actual invoice amount charged by the eligible educational institution for room and board is higher than the “cost of attendance” figure, then the actual invoice amount may be treated as qualified room and board costs.

Choice of Investment Options

Choice of Investments
The Minnesota College Savings Plan offers a choice of six Investment Options varying in risk and objective. You can choose a single option or multiple options when contributing to the Minnesota College Savings Plan.

Ability to Transfer to Another Beneficiary
If your beneficiary does not attend an eligible educational institution, you may name another eligible beneficiary for your account. The new beneficiary must be a member of the previous beneficiary's family, as described in the Disclosure Booklet (PDF), in order to avoid having this change treated as a non-qualified withdrawal. There is no time restriction or age restriction to use the account proceeds.

Low Fees

With the Minnesota College Savings Plan there are no sales charges, start-up or maintenance fees. An annual asset-based management fee will be paid to TIAA-CREF Tuition Financing, Inc. to cover the cost of investment management and administrative services. This fee ranges, depending on the investment option, from 0.5125% to 0.6125% of the average daily net assets of your account, excluding assets held in the Guaranteed Option. The Guaranteed Option is offered without the annual asset-based management fee.

Please note that the Minnesota Office of Higher Education and the Minnesota State Board of Investment reserves the right to change the current fee and impose new or additional fees, expenses, charges or penalties in the future. For details on the management fee, please see fees and expenses.

Managed By a Leading Financial Services Provider

The state of Minnesota selected TIAA-CREF Tuition Financing, Inc. to serve as Program Manager for the Minnesota College Savings Plan. TIAA-CREF Tuition Financing, Inc. is an affiliate of TIAA-CREF, a financial services organization with more than 90 years of investment experience. TIAA-CREF Tuition Financing, Inc. is also a leader in managing 529 college savings plans. Visit TIAA-CREF.

Matching Grant

As of July, 2011, the state of Minnesota discontinued the matching grant program for account contributions made after December 31, 2010. Beneficiaries who have received the matching grant in the past will continue to accrue earnings on their matching grant account, but no additional contributions will be made. For more information on the matching grant, please read the Disclosure Booklet.

Easy Access to Your Account

You'll have online access to your account information 24 hours a day, or you can call 1-877-338-4646 and speak to one of our college savings specialists Monday through Friday, 7 a.m. - to 7 p.m. CT. You'll receive quarterly and annual statements showing account activity. A separate confirmation statement will also be mailed following each transaction in your account.

You can perform the following account transactions online: request a withdrawal from your account; rebalance funds among investment options, request e-Delivery versus paper delivery, establish or change automatic contributions and view pending account contributions.


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