The LoneStar 529 Plan is a tax-advantaged 529 college savings plan designed to help families and individuals nationwide save for Qualified Higher Education Expenses: Undergraduate and graduate tuition, fees, books, supplies, and equipment required for a Beneficiary’s enrollment or attendance at an Eligible Educational Institution. The term includes computers and peripherals, software (except for non-educational sports, games, or hobby software), and internet service if used primarily by the Beneficiary while enrolled at an Eligible Educational Institution. Expenses for special needs services incurred in connection with enrollment or attendance at an Eligible Educational Institution are also included in the definition. The term also includes reasonable room and board for beneficiaries who are enrolled at least half-time at an Eligible Educational institution Qualifying expenses also include fees, books, supplies, and equipment necessary to participate in a registered apprenticeship program, and the ability to repay up to $10,000 (lifetime per student) in student loans for the Beneficiary or the Beneficiary’s sibling. Additionally, 529 Plans may be used for K-12 tuition for private, public, or religious school (up to $10,000 per year per Beneficiary). Recent tax reform legislation changes allowing for payment of K-12 tuition were on a federal level, and the tax consequences of using 529 plans for elementary or secondary education tuition expenses will vary depending on state law and may include recapture of tax deductions received from the original state as well as penalties. The account owner should consult with a tax or legal advisor before using the plan for K-12 tuition. Individuals must enroll in the plan through their financial advisor. All U.S. citizens and permanent resident aliens 18 years of age or older can open and contribute to a LoneStar 529 Plan account.
The Texas Prepaid Higher Education Tuition Board administers the plan, and Orion Advisor Solutions, Inc. is the plan manager. For more information on the plan, call us at 800-445-GRAD (4723), option 4.