Indiana 529 Plan And College Savings Options
Indiana has a 529 plan called CollegeChoice that can help you save for college. Indiana does not have a 529 ABLE plan.
If you live in Indiana, 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 Indiana. Each state has different rules when it comes to 529 plan savings. Here are the Indiana 529 plan rules.
Average Cost Of College In Indiana
When saving for college in Indiana, 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 131 colleges and universities in the State of Indiana.
The total average cost of college (Cost of Attendance) in Indiana for in-state residents is $19,217 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 $6,752 for 2023. The cost of tuition in Indiana has been relatively flat.
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.
Indiana 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 Indiana.
Contributions
Indiana offers a 20% tax credit worth up to $1,500 ($750 for married filing separately) for contributions made to an Indiana 529 Plan, regardless of tax filing status.
Minimum: $10
Maximum: Accepts contributions until all account balances for the same beneficiary reach $450,000.
Rollovers
Rollovers into the state plan allowed but not considered for the tax credit.
Outbound rollovers are subject to recapture of tax credits.
Qualified Distributions
Qualified distributions from an Indiana and non-Indiana 529 plan are tax-free.
K-12 Education
Indiana does semi-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. The K-12 school must be located in Indiana to qualify.
Student Loans
Indiana does not conform with Federal law for using a 529 plan for student loans, yet. This may change before tax filing.
Rollover To Roth IRA
Indiana does not 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 Indiana 529 is subject to recapture of previous tax credits, or 20% Indiana state income tax on the withdrawal amount, whichever is less.
Indiana 529 College Savings Plan Options
Indiana has several 529 plan options - two consumer plans 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).
Indiana CollegeChoice 529 Plan
The Indiana CollegeChoice 529 Plan is the name of Indiana's traditional investment-based 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, DFA, and Dodge & Cox.
Fees:
There is a $20 annual fee, which is waived for Indiana residents, or those with account balances greater than $25,000.
There is a program management fee of 0.16% to 0.31%.
The underlying funds all charge expense ratios from 0.02% to 0.63% depending on the investment option.
Who Should Use It:
We recommend that Indiana residents use the Indiana CollegeChoice 529 plan due to the tax benefits, low fees, and plan investment options.
We recommend that out-of-state residents utilize other plans.
Indiana CollegeChoice CD 529 Plan
The Indiana CollegeChoice 529 CD Plan is a bank-based 529 Plan. This plan offers the choice between a certificate of deposit, or a high yield savings account. Both of these options are FDIC-insured.
Fees:
This plan as no fees.
Who Should Use It:
We don't recommend a bank-based 529 plan for long term growth of money for college. This could be a viable option if you're close to needing the funds. But most people would likely be better served using the traditional Indiana CollegeChoice 592 Plan.
Indiana 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.
Indiana is one of the few states that doesn't offer a 529 ABLE plan.
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.
Indiana 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 Indiana Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Chris Muller
