Alaska 529 Plan And College Savings Options
Alaska has a 529 plan called Alaska 529 that can help you save for college. Alaska also has a 529 Able Plan as well. There is also T. Rowe Price's nationally-marketed 529 Plan which is a mirror of Alaska 529 with a slight variation of investment options.
If you live in Alaska, 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 Alaska. Each state has different rules when it comes to 529 plan savings. Here are the Alaska 529 plan rules.
Average Cost Of College In Alaska
When saving for college in Alaska, 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 9 colleges and universities in the State of Alaska.
The total average cost of college (Cost of Attendance) in Alaska for in-state residents is $18,504 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 $7,143 for 2023. The cost of tuition in Alaska has been relatively flat the last two years.
See how this compares to the average cost of college here. Keep in mind the average student loan debt by graduating class here.
Alaska 529 Plan 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 Alaska.
Contributions
Since Alaska doesn't have a personal income tax, there are no state tax deductions for contributions.
Minimum: $25
Maximum: Accepts contributions until all account balances for the same beneficiary reach $475,000.
Rollovers
The state has no personal income tax - rollovers into and out of the plan are permitted.
Qualified Distributions
Qualified distributions from an Alaska 529 plan are tax-free as the state has no personal income tax.
K-12 Education
Alaska 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
Alaska does conform with Federal law for using a 529 plan for student loans. You can use up to $10,000 one-time to repay your student loan debt.
Rollover To Roth IRA
Alaska 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
There are no personal income taxes in Alaska. However, non-qualified distributions are subject to federal taxes and a 10% penalty on earnings.
Alaska 529 College Savings Plan Options
Alaska has several 529 plan options - two consumer plans 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).
The two consumer plans are nearly identical - except one is marketed nationwide, and the other is geared for Alaska residents. The Alaska 529 plan for residents has a special tuition-value guarantee that is helpful.
Alaska 529 Plan Facts
Alaska has the following currently invested in 529 plans in the state as of December 31, 2023:
529 Plan | Number Of Accounts | Total Assets | Average Account Balance |
|---|---|---|---|
Alaska ‐ John Hancock Freedom 529 | 171,338 | $5,683,869,163 | $33,173 |
Alaska 529 | 43,916 | $738,643,506 | $16,819 |
Alaska ‐ T. Rowe Price College Savings Plan | 105,667 | $3,560,522,665 | $33,695 |
Total | 320,921 | $9,983,035,344 | $31,107 |
Alaska 529
Alaska 529 is the name of Alaska'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 are from T. Rowe Price.
University of Alaska Portfolio Tuition-Value Guarantee:
You can purchase University of Alaska (UA) tuition credits now for future use by using the University of Alaska Portfolio. The University of Alaska Portfolio locks in the current tuition value at the University of Alaska, so it can be a good choice if you believe your child may attend UA. However, this investment option can also be used to save for any college in the country.
Your portfolio will be reported in both dollar-value and UA tuition credits so you can see what happens if you go to an in-state school or elsewhere.
Fees:
There is a program trust fee of 0.05%. This fee is waived for the University of Alaska Portfolio.
The underlying funds all charge expense ratios from 0.28% to 0.64% depending on the investment option.
Who Should Use It:
We recommend that Alaska residents use the Alaska 529 plan due to the tuition-value guarantee, low fees, and plan investment options.
We recommend that out-of-state residents utilize the Alaska T. Rowe Price College Savings Plan if they are considering this plan.
Alaska T. Rowe Price College Savings Plan
The T. Rowe Price College Savings plan is the name of Alaska's nationally-marketed 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 are from T. Rowe Price.
Note, this plan does have slightly different minimums than the in-state plan. You must have an initial deposit of $250, and subsequent deposits of at least $50.
Fees:
There is a program trust fee of 0.05%. This fee is waived for the University of Alaska Portfolio.
The underlying funds all charge expense ratios from 0.30% to 0.64% depending on the investment option.
Alaska 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.
Alaska ABLE Plan
The Alaska ABLE Plan is a 529A plan open to all residents in Alaska (the plan is administered by the National ABLE Alliance).
This plan allows contributions of up to $18,000 per year from all sources.
It does have a minimum initial contribution amount of $25 per account. The minimum subsequent contribution amount is $25.
The plan does have an account maintenance fee of $60 annually, assessed at $15 per quarter. This can be discounted for enrolling in paperless statements, and for being a resident of Alaska.
It also has a program management fee of 0.32%.
You can open an Alaska ABLE Plan 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.
Alaska 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 Alaska Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Mark Kantrowitz