Arkansas 529 Plan And College Savings Options
Arkansas has a 529 plan called the Brighter Future 529 Plan that can help you save for college. Arkansas also has a 529 Able Plan as well.
If you live in Arkansas, these might be good options for you to save for college.
These programs are designed to help make college more affordable - so that you can get the education you need. By saving for college early on, you can make paying for college easier down the road.
If you're not quite sure how 529 plans work, check out this starter guide to What Is a 529 Plan?
There is also a specific order of operations to save for college that we recommend families follow. These programs are specific to the State of Arkansas. Each state has different rules when it comes to 529 plan savings. Here are the Arkansas 529 plan rules.
Average Cost Of College In Arkansas
When saving for college in Arkansas, it's important to take into consideration the cost of attendance in the state. If you choose to go to an out-of-state school, you need to look at the average cost of attendance in that state.
There are 91 colleges and universities in the State of Arkansas.
The total average cost of college (Cost of Attendance) in Arkansas for in-state residents is $15,064 for 2023. This includes tuition, room and board, books and supplies, and other expenses.
For just tuition alone, the average undergraduate tuition for in-state residents is $5,339 for 2023. The cost of tuition in Arkansas has been relatively flat the last several years.
See how this compares to the average cost of college here. Keep in mind the average student loan debt by graduating class here.
Explore the data here.
Arkansas 529 Plan Tax Information
Tax savings is one of the big benefits of using a 529 plan to save for college. On a federal-level, there is no tax savings for contributions, but qualified distributions are tax-free.
Here are the special tax benefits and considerations for using a 529 plan in Arkansas.
Contributions
Arkansas offers a state tax deduction for contributions to a 529 plan of up to $5,000 for single filers and $10,000 for married filing jointly tax filers. This also has a 4-year carry-forward of over-contributions (allowing for super-funding).
Arkansas is one of the few states that allow state tax deductions for non-Arkansas 529 plan contributions. You can receive a tax deduction up to $3,000 per year for an individual, and up to $6,000 per year for a married couple filing jointly.
Arkansas also gives a tax deduction if you roll an out of state plan into Arkansas. You can receive a one-time $7,500 tax deduction for doing this.
Arkansas is also one of the few states that gives employers a tax deduction for matching contributions. Employers are allowed a $500 deduction per employee for 529 matches into Arkansas plans.
Minimum: There is a $25 minimum contribution.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $366,000.
Rollovers
Rollover contributions from another state's plan are tax deductible on your Arkansas state tax return in the amount of $7,500 per individual and $15,000 per couple.
Outbound rollovers are subject to the recapture of prior state tax deductions.
Qualified Distributions
Qualified distributions from an Arkansas and non-Arkansas 529 plan are tax-free.
K-12 Education
Arkansas does conform with Federal law in regard to using a 529 plan for K-12 tuition. See this guide: Using a 529 Plan For Elementary and High School Private Education.
Student Loans
Arkansas does conform with Federal law for using a 529 plan for student loans.
Rollover To Roth IRA
Arkansas does allow the rollover to a Roth IRA up to $35,000. Learn more about the 529 plan to Roth IRA rollover here.
Non-Qualified Distributions Taxes, Penalties, Recapture
A non-qualified withdrawal from an Arkansas 529 is subject to the total amount (principal and earnings) subject to Arkansas state tax to the extent of any prior state tax deductions.
Arkansas 529 College Savings Plan Options
Arkansas has several 529 plan options - one consumer plan and one plan that is sold by financial advisors (we're big advocates of doing-it-yourself, you don't need to pay a financial advisor for this).
Arkansas Brighter Future 529 Plan
The Brighter Future Plan is the name of Arkansas's 529 Plan. This plan offers a variety of investment options, including age-based portfolios that become more conservative as the child approaches college, and static investment fund options.
The funds offered include Vanguard mutual funds.
Fees:
There is a $20 annual fee, which is waived for Arkansas residents.
There is a program management fee of 0.48%.
There are no expenses on the funds, they are included in the program management fee.
Who Should Use It:
We recommend that Arkansas residents use the GIFT College Investing Plan due to the tax benefits, low fees, and plan investment options.
We recommend that out-of-state residents utilize other plans.
Arkansas 529 Able Plan Options
529A Able accounts are accounts designed to help those with disabilities escape poverty and save for themselves. Learn more about 529A Able Plans here.
AR Able
The AR Able is a 529A plan open to all residents in Arkansas (the plan is actually offered through the National ABLE Alliance).
This plan allows contributions of up to $18,000 per year from all sources.
It does have a minimum initial contribution amount of $25 per account. The minimum subsequent contribution amount is $25.
The plan does have an account maintenance fee of $60 annually, assessed at $15 per quarter. You can reduce these fees by opting for paperless statements, and by maintaining a $250 balance.
It also has a program management fee of 0.32%.
You can open an AR Able plan here.
Other Programs To Save For College
A 529 plan is one way to save for college. Remember, we have a full guide on our approach to college savings here - and it helps you find other options.
If you're looking for ways to boost your college savings, check this out:
Backer
Backer is one of our favorite ways to save for college because they make gifting for college so easy. You can setup an account, link your 529 plan (in most states), and get a unique URL that you can share with friends and family to save for your children's college.
Plus, they have Backer Bucks, which allow you to earn rewards and rebates for the shopping you already do - directly deposited into your children's 529 plan.
Upromise
Upromise is another awesome tool to help you save for college because they have a lot of ways that you can earn money for your 529 plan. You can get rebates and rewards, and you can get cash back into your child's 529 plan by using the Upromise credit card.
Arkansas Financial Aid
Using a 529 plan isn't the only way to save money for college. Each state typically offers a variety of financial aid programs for their residents. These include scholarships and grants, and sometimes unique forgivable student loan opportunities.
Check out the list of Arkansas Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Mark Kantrowitz
