Utah Educational Savings Plan

General Plan Questions

What is a 529 plan?

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529 plans are tax-advantaged savings vehicles designed to encourage individuals to begin to save for the costs of higher education. They are authorized by Section 529 of the Internal Revenue Code.

 

What is the Utah Educational Savings Plan?

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The Utah Educational Savings Plan (UESP) was established by the Utah State Legislature and is designed to comply with Section 529 of the Internal Revenue Code. UESP is administered and managed by the Utah State Board of Regents acting in its capacity as the Utah Higher Education Assistance Authority.

A nonprofit trust fund, UESP is the official and only 529 plan sponsored by the State of Utah. It is a direct-sold 529 plan, which means you can set up an account and make contributions by dealing directly with UESP.

 

What if I don't live in Utah?

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You don't need to be a Utah resident or taxpayer to open a UESP account—you can invest in any 529 plan and still enjoy the same federal tax benefits. You should determine if the state in which you or your beneficiary pay taxes or live offers a 529 plan that provides state tax or other benefits not offered to you by investing in UESP. Forty-nine states and the District of Columbia currently offer at least one 529 plan.

 

What are the income tax incentives for saving through UESP?

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Earnings on your account grow tax deferred from federal and Utah state income taxes while you save. Withdrawals are exempt from federal and Utah state income taxes when used for qualified higher education expenses. Utah taxpayers have additional state income tax benefits. For additional information, click here for Utah resident tax benefits.

 

Does UESP have any FDIC-insured investment options?

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Yes. UESP offers an underlying FDIC-insured investment held in trust by UESP at Sallie Mae Bank and U.S. Bank* in several investment options.

The FDIC-insured investment is the sole underlying investment for the FDIC-Insured investment option. Selecting FDIC-Insured as your investment option for an account would give you FDIC insurance up to $250,000 per bank. (Some limitations might apply if you hold other accounts at Sallie Mae Bank or U.S. Bank.**)

Additionally, some age-based and static investment options allocate funds to the FDIC-insured investment. For example, if you select the Age-Based Moderate investment option and have a beneficiary who is age 13, 25 percent of the account funds are allocated to the FDIC-insured investment, and thus that portion is insured by the FDIC.**

Read the UESP Program Description to learn more.

*Contributions to and earnings on the FDIC-insured accounts are allocated between Sallie Mae Bank and U.S. Bank (Banks) to maintain a static allocation according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent).

**Funds in the FDIC-insured accounts are insured by the FDIC on a pass-through basis to each account owner at each Bank up to the maximum amount set by federal law, which is $250,000. The amount of FDIC insurance provided to an account owner is based on the total of (1) the value of an account owner’s investment in the FDIC-insured account at each Bank plus (2) the value of other accounts held (if any) at each Bank, as determined by the Banks and by FDIC regulations.

 

What level of earnings can I expect to receive?

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Investments in UESP accounts are subject to the market performance of the underlying investments. There are no guarantees that accounts will increase in value, not decrease in value, or achieve any rate of return. You could lose money, including the principal you invest, or not make money by investing in UESP.

 

Are there any guarantees?

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No. Neither the State of Utah nor UESP make any guarantees concerning the rate of return or preservation of your contributions to UESP accounts. Additionally, investments are not guaranteed by the Utah State Board of Regents, the Utah Higher Education Assistance Authority, the FDIC (except as noted below), or any other government agency. Account owners assume all the investment risks associated with these kinds of investments, including loss of principal.

Subject to the application of the rules and regulations of Sallie Mae Bank, U.S. Bank, and the FDIC to each account owner, money in the FDIC-insured accounts will retain its value, whether in the FDIC-Insured investment option or when allocated to portions of another investment option that has the FDIC-insured accounts included as an underlying investment.

Please read the UESP Program Description for more information on how FDIC insurance would apply to your investments.

 
 
 

Important Legal Notice

You should read the Program Description and consider all investment objectives, risks, charges, and expenses before investing. The Program Description is available for download on the web or a hard copy can be mailed to you by requesting it online here.

FDIC Insurance. Except for the underlying investment specified below, investments in UESP are not insured by the Federal Deposit Insurance Corporation (FDIC). FDIC insurance, up to applicable limits, is provided for the FDIC-insured accounts held in trust by UESP at Sallie Mae Bank and U.S. Bank National Association (U.S. Bank) (collectively Banks). Contributions to and earnings on the FDIC-insured accounts are allocated between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner at each Bank up to the maximum amount set by federal law, which is $250,000. The amount of FDIC insurance provided to an account owner is based on the total of (1) the value of an account owner’s investment in the FDIC-insured account at each Bank plus (2) the value of other accounts held (if any) at each Bank, as determined by the Banks and by FDIC regulations.

No Other Insurance and No Guarantees. Investments in UESP are neither insured nor guaranteed by the State of Utah, UESP, the Utah State Board of Regents, the Utah Higher Education Assistance Authority, other state agencies, federal government agencies (except to the extent noted above regarding FDIC insurance), or any employees or directors of any such entities. Units in UESP have not been registered with the United States Securities and Exchange Commission or with any state securities commission.

Account Value. The value of your UESP account may vary depending on market conditions and the performance of the UESP investment option you select. It could be more or less than the amount you contribute; in short, your investment could lose value. However, subject to the application of the rules and regulations of the Banks and the FDIC to each account owner, money in the FDIC-insured accounts will retain its value, whether in the FDIC-Insured investment option or when allocated to portions of another investment option that have the FDIC-insured accounts included as an underlying investment.

Non-Utah Taxpayers and Residents. You should determine whether the state in which you or your beneficiary pay taxes or live offers a 529 plan that provides state tax or other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP.