529 Myths

Why haven’t you started saving for education yet?

NJBEST offers many features that NJ families are looking for like low contribution minimums, no sales charges, a wide range of investment options, innovative tools and a special benefits exclusive to New Jersey families.

Or…

Do you still believe the myths about 529 savings plans?


Myths vs Facts

MYTH:

With NJBEST, my child will need to go to college in New Jersey.

 FACT:

Your child doesn’t have to go to college in New Jersey! You can use NJBEST for most schools in the United States, no matter where your 529 savings plan is based.

MYTH:

I can only use NJBEST if my child goes to a 4-year college or university.

 FACT:

NJBEST can be used at most accredited two- and four-year colleges and universities and vocational schools, including many outside the U.S. In addition, up to $10,000 per year per beneficiary can be used for tuition at eligible public, private and religious K-12 schools. At this time, it is not clear what, if any, expenses will be regarded as “tuition” in the case of public schools.1

MYTH:

Grandparents cannot open a 529 plan, only parents can.

 FACT:

Parents, grandparents, aunts, uncles, friends... almost anyone can be an account owner with a valid U.S. Tax ID and a permanent address. You can even open an NJBEST plan for yourself!

MYTH:

I make too much money to contribute to a 529 plan.

 FACT:

It does not matter how much you earn. 529 plans have no income limits.

MYTH:

I can only open a plan if I have children.

 FACT:

529 plans are for people of all ages! Are you considering changing careers or pursuing another degree? Are you planning to have children soon? You can always open an account in your name and change the beneficiary later to another person in your family.

MYTH:

NJBEST will only cover tuition, but I have so many other education expenses which are not covered.

 FACT:

NJBEST savings can be used for any qualified tuition expense. Additionally, for accredited higher education schools (e.g. college or vocational schools), savings can be used for additional qualified expenses including mandatory fees, supplies, books or other required equipment, and room and board, if the beneficiary is enrolled at least half-time.1

MYTH:

When my child turns 18, they will just take the money and use it for something else – like a new car.

 FACT:

You have control! The NJBEST account owner owns the plan’s assets and controls how and when they will be used. Unlike an UGMA/UTMA, the NJBEST beneficiary has no legal rights to the plan’s assets, even when they turn 18.


Don’t you feel better about 529 plans?
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