WV Prepaid Tuition Plan

IMPORTANT INFORMATION:
As previously communicated, the Prepaid Tuition Plan is scheduled for termination on June 30, 2022. The West Virginia College Prepaid Tuition and Savings Program Board of Trustees is offering to buy out the remaining units in your Prepaid Tuition Plan account in anticipation of the Prepaid Tuition Plan termination. If part of this program, you should have received a letter in the mail. To review your options again, view letter. On March 8, 2003, the West Virginia Legislature enacted House Bill 2953, which continued the Prepaid Tuition Plan, but closed it to new enrollments. This action did not affect those already enrolled in the Plan.

 

The WV Prepaid Tuition Plan is scheduled for termination on June 30, 2022.

Buyout Offer

The West Virginia College Prepaid Tuition and Savings Program Board of Trustees is offering to buy out the remaining units in Prepaid Tuition Plan accounts in anticipation of the Prepaid Tuition Plan termination. The buyout offer will expire automatically on May 31, 2020. See the list of Frequently Asked Questions.

If you choose to accept the buyout, your remaining units will be distributed in one of the following two options:

 

Option #1: Rollover/Transfer

The rollover value of the remaining units in your Prepaid Tuition Plan account can be distributed as a non-taxable rollover into a SMART529 savings account. Don’t have a SMART529 savings account? You may open a SMART529 savings account now by visiting How to enroll. For new account funding, choose the Rollover/Transfer option. Partial rollovers are not permitted. The buyout value noted above will be transferred to your SMART529 savings account.

The rollover value of remaining units is tax-free and allows you to have all the rights and benefits of owning a SMART529 savings account, including a wide variety of investment options.  Additionally, by rolling over to a SMART529 savings account, you as the account owner would be able to change to another eligible beneficiary, subject to program guidelines.

Please note that this option may only be selected if the funds are being rolled over into a SMART529 savings account. A SMART529 savings account number is required to select the Rollover/Transfer option. For more information, please consult your financial planner or www.SMART529.com.

 

Option #2: Voluntary Cancellation with Distribution to Account Owner

The buyout value of the remaining units in your Prepaid Tuition Plan can be distributed to you, the account owner, as a Voluntary Cancellation distribution.  Please note that if the distribution is not used for eligible plan expenses or rolled over into another qualified tuition plan within 60 days, it will be considered a Non-Qualified Distribution. You should consult with a qualified tax advisor and review plan disclosure documents for more information on this option, as this type of distribution generally is considered a taxable event subject to both federal and possibly state income tax, as well as an additional 10% federal tax penalty.

 

The buyout offer will expire automatically on May 31, 2020

If you choose not to accept either option mentioned above, the units will remain in your Prepaid Tuition Plan account until they expire under normal plan rules or June 30, 2022, whichever comes first.

 

FAQs

BUYOUT OFFER QUESTIONS

Why am I being offered a buyout? 

What is the buyout value? 

What happens if I take the buyout for non-qualified expenses? 

What happens if I do nothing?  

ROLLOVER QUESTIONS

How do I rollover my Prepaid Tuition Plan benefits into the SMART529 plan? 

Will I receive a 1099? 

Why should I roll over my Prepaid Tuition Plan benefits? 

SMART529 COLLEGE SAVINGS PLAN QUESTIONS

What is the SMART529 College Savings Plan? 

What can my SMART529 benefits be used for?  

SMART529 assets can be used at thousands of eligible education institutions across the United States and some overseas schools. They include colleges, universities, vocational & technical schools, or other post-secondary educational institutions eligible to participate in federal student aid programs administered by the U.S. Department of Education. There is no time limit for use of SMART529 benefits.

What can my SMART529 benefits be used for?  

Can I change the beneficiary on my SMART529 account? 

Can I contribute additional money to SMART529? 

Can I lose money? 

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