Facts About Colorado's 529 Plans

Higher education is getting out of reach for many Coloradans, but there is hope in the form of the 529 tax-advantaged savings plan the state offers to help offset rising costs. These 529 tax-advantaged savings plans are authorized by the Internal Revenue Service to encourage people to save for future college costs. According to the United States Securities and Exchange Commission, these 529 plans, legally known as "qualified tuition plans," are sponsored by states, state agencies or educational institutions and differ from one state to the next on what they offer and entail. 

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Colorado offers three different direct-sold 529 plans and one advisor-sold program. All are tax-deductible, according to the Colorado Department of Revenue, which tells how to access these plans. Here are some details about the Colorado 529 plans according to Savingforcollege.com. 

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Colorado's Direct Portfolio College Savings Plan, is the largest and it is managed by Ascensus College Savings – which uses Vanguard mutual funds. Regulations for this plan include that it allows members to enroll directly with the program. U.S. citizens, resident aliens, trusts, 501(c)(3) organizations, and local governments are eligible to participate. Caps for each beneficiary are $350,000, with a $25 minimum initial contribution, and $15 minimums after that. There are three different risk-based levels to consider for investment options. There are fees involved. Matching grants are available for up to $400 for lower- to middle-income participants. Apply between Sept. 1 and Dec. 31 annually. 
Colorado's Smart Choice College Savings Plan has two Federal Deposit Insurance Corporation-insured options through FirstBank. This plan features an age-based, static portfolio using mutual funds. This plan has no state residency requirements. All U.S. citizens, resident aliens and 501(c)(3) organizations and local governments may participate in the plan. The cap is $350,000 with a minimum contribution of $25, but additional contributions can be made starting at just $15. Similar to the Direct Portfolio College Savings plan, there are fees for the Smart Choice plans that include account and management expenses. There are matching grants for the program that provide for up to $400 in contributions for lower- to middle-income Colorado residents to accounts with an eligible beneficiary. Apply between September 1 and December 31. 
The Stable Value Plus College Savings Program offers savers an investment through MetLife Insurance Co. This plan's interest rate is declared each year. U.S. citizens, resident aliens, Uniform Gifts to Minors Act/ Uniform Transfer to Minors Act (UGMA/UTMA) custodians, and legal entities may participate. The cap per beneficiary is $350,000, with a minimum contribution of $25. There are fees associated with this fund. There are matching funds up to $500 in contributions for lower- to middle-income Colorado residents. Apply between Sept. 1 and Dec. 31. 
The Scholars Choice College Savings Plan, managed by Legg Mason, is sold through financial advisors. For this plan, members must enroll through a financial advisor. Participation restricted to U.S. citizens, resident aliens, UGMA/UTMA custodians, and legal entities. The cap per beneficiary is $350,000, with a minimum of $250 initial investment and a $50 periodic automatic fund transfer investment. The plan has some age-based enrollment options. There are fees associated with this plan. The matching grant is comparable to the Stable Value Plus plan.