South Carolina 529 Plan Rules And College Savings Options
South Carolina has a 529 plan called Future Scholars that can help you save for college. South Carolina also has a 529 Able Plan as well.
If you live in South Carolina, 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 South Carolina. Each state has different rules when it comes to 529 plan savings. Here are the South Carolina 529 plan rules.
Average Cost Of College In South Carolina
When saving for college in South Carolina, 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 94 colleges and universities in the State of South Carolina.
The total average cost of college (Cost of Attendance) in South Carolina for in-state residents is $20,388 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 $8,615 for 2023. The cost of tuition in South Carolina has been rising at about 2% per year.
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.
South Carolina 529 Plan Rules And 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 South Carolina.
Contributions
Contributions to a South Carolina 529 plan are fully deductible - no limit. Rollovers are included.
Note: South Carolina only allows residents to participate in their plans.
Minimum: There is no minimum contribution.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $540,000.
Rollovers
Rollovers into the state plan are considered for the tax deduction up to the limits specified above.
Outbound rollovers are not subject to recapture.
Qualified Distributions
Qualified distributions from a South Carolina or non-South Carolina 529 plan are tax-free.
K-12 Education
South Carolina 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
South Carolina does conform with Federal law for using a 529 plan for student loans.
Rollover To Roth IRA
South Carolina 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 a South Carolina 529 is subject to income tax up to recapture any prior tax deductions received.
South Carolina 529 College Savings Plan Options
South Carolina 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). They also have an old pre-paid tuition program that is no longer taking new enrollment.
South Carolina Future Scholar 529 College Savings Plan
The South Carolina Future Scholar 529 College Savings Plan is the name of South Carolina'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 and iShares.
Fees:
There is no program management fee.
The underlying funds all charge expense ratios from 0.02% to 0.25% depending on the investment option.
Who Should Use It:
We recommend that South Carolina residents use the South Carolina Future Scholar 529 plan due to the tax benefits, low fees, and plan investment options.
Out-of-state residents aren't allowed to use the plan.
South Carolina 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.
Palmetto Able Savings Program
The Palmetto Able Savings Program is a 529A plan open to all residents in South Carolina.
This plan allows contributions of up to $18,000 per year from all sources.
It does have a minimum initial contribution amount of $50 per account. The minimum subsequent contribution amount is $1.
The plan does have an account maintenance fee of $42 annually, assessed at $3.50 per month. It also has a program management fee of 0.19%.
You can open an Palmetto Able Savings Program 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.
South Carolina 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 South Carolina Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Ashley Barnett
