Money Magazine recently ranked North Carolina's 529 Plan, which is offered by the State Employees' Credit Union, one of the country's top three state college savings plans.
In its October issue, the publication highlighted plans in North Carolina, Delaware and Utah. "These 529s, all with ultralow fees and age-based portfolio options, are top picks for college savers shopping nationally," it said. "Even though many states offer resident tax perks, those breaks can't always make up for high fees."
Whether a North Carolina taxpayer is an NC 529 account owner or contributing to someone else's account, his or her contributions of up to $2,500 for individuals and $5,000 for joint filers per year are eligible for a state tax deduction. The account earnings are also free from federal and state taxes as long as college savings are used for qualified higher education expenses such as tuition, room and board, books, fees and required equipment. Money in an NC 529 account can be used at almost any four-year or two-year college, in-state or out-of-state.
In April, the College Foundation of North Carolina announced that the state's National College Savings Program added the NC 529 Plan to the investment options it offers. The new investment option was the culmination of a collaboration between the $19 billion SECU, College Foundation Inc. and the NC State Education Assistance Authority. CFI administers the NC 529 Plan.