Colorado 529 Plan And College Savings Options
Colorado has a 529 plan called CollegeInvest (with three different options) that can help you save for college. Colorado also has a 529 Able Plan as well.
If you live in Colorado, 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 Colorado. Each state has different rules when it comes to 529 plan savings. Here are the Colorado 529 plan rules.
Average Cost Of College In Colorado
When saving for college in Colorado, 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 105 colleges and universities in the State of Colorado.
The total average cost of college (Cost of Attendance) in Colorado for in-state residents is $20,235 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 $7,165 for 2023. The cost of tuition in Colorado has been relatively stable for the last few years.
See how this compares to the average cost of college here. Keep in mind the average student loan debt by graduating class here.
Colorado 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 Colorado.
Contributions
Colorado offers one of the most generous state tax deductions for contributions to a Colorado 529 plan - with a state tax deduction of $22,700 for single filers, and $34,000 for married filers (in 2024).
Matching Contributions: The Matching Grant Program provides a dollar-for-dollar match of up to $500 in contributions for lower- to middle-income Colorado residents to accounts with an eligible beneficiary. You must apply annually between October 1 and December 31.
Colorado also offers an employer tax credit for making matching contributions to a Colorado 529 plan. The tax credit is 20% of the amount contributed to a CollegeInvest 529 account, up to $500 per employee.
Minimum: $25.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $500,000.
Rollovers
Rollovers into the state plan are allowed but not eligible for the tax deduction.
Outbound rollovers are subject to recapture of any state tax deduction received.
Qualified Distributions
Qualified distributions from a Colorado and non-Colorado 529 plan are tax-free.
K-12 Education
Colorado does not 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
Colorado does not conform with Federal law for using a 529 plan for student loans.
Rollover To Roth IRA
Colorado does not 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
A non-qualified withdrawal from a Colorado 529 is subject to recapture of any state tax deductions received.
Colorado 529 College Savings Plan Options
Colorado has several 529 investment options in its overall CollegeInvest plan - three 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).
Colorado 529 Plan Facts
Colorado 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 |
|---|---|---|---|
CollegeInvest Direct Portfolio | 206,016 | $6,304,399,310 | $30,601 |
Smart Choice College Savings Plan | 16,054 | $97,186,000 | $6,053 |
Stable Value Plus College Savings Plan | 13,764 | $134,710,000 | $9,787 |
Scholars Choice College Savings Program | 170,196 | $4,929,879,160 | $28,966 |
Total | 406,030 | $11,466,174,470 | $28,240 |
Direct Portfolio College Savings Plan
The Direct Portfolio College Savings Plan is the name of Colorado's "traditional" 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 include Vanguard.
Fees:
There is an account maintenance fee of $20 for accounts with less than $10,000, which is waived for Colorado residents.
There is a program management fee of 0.34%.
The underlying funds' fees are included in the program management fee.
Who Should Use It:
We recommend that Colorado residents use the Colorado CollegeInvest 529 plan due to the significant tax benefits, low fees, and plan investment options.
Stable Value Plus College Savings Plan
The CollegeInvest Stable Value Plus College Savings Plan is the name of Colorado's "insurance-version" 529 Plan. This plan offers a stable-value account backed by Nationwide.
This plan offers a guaranteed rate of return (usually about 2%) but no risk of loss.
Fees:
There is a program management fee of 0.99%.
Who Should Use It:
We don't recommend anyone use this option.
Smart Choice College Savings Plan
The Smart Choice College Savings Plan is the name of Colorado's "bank-version" 529 Plan. This plan offers a savings account offered by First Bank.
This plan offers an FDIC savings account and money market account, both with interest rates set by the bank.
Fees:
None
Who Should Use It:
We don't recommend anyone use this option.
Colorado 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.
Colorado ABLE
The Colorado ABLE is a 529A plan open to all residents in Colorado offered 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. It also has a program management fee of 0.32%.
You can open an Colorado 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.
Upromise
Upromise is another awesome tool to help you save for college because they have a lot of ways that you can earn money for your 529 plan. You can get rebates and rewards, and you can get cash back into your child's 529 plan by using the Upromise credit card.
Colorado 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 Colorado Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Mark Kantrowitz