HI529 is a voluntary program designed to assist families in saving for college. Administered by the State of Hawaiʻi Department of Budget and Finance, HI529 offers valuable tax benefits, high contribution limits, expert investment management, and the flexibility of choosing from a range of investment options.
Contributions are made with after-tax dollars, the earnings on the account grow tax-deferred, and distributions used for qualified higher education expenses are tax-free (Hawaiʻi State and federal taxes).
Employees are allowed to contribute to HI529 through payroll deduction.
All faculty, staff, and student employees (including casual and 89-day hires) are eligible to participate in the HI529 College Savings Program.
Enroll
- Open an account at www.hi529.com
- Your initial investment, by any source of funds, must total at least $15
Payroll Deduction
Please make sure the name on your HI529 account matches the name on your paycheck. If your employment with the State of Hawaii is terminated, you must cancel your payroll deduction instructions on your HI529 account. If HI529 does not receive payroll contributions for 12 months your payroll deduction will be automatically discontinued.
HI529 offers unique tax advantages, including:
- Tax-deferred growth: Earnings can grow tax deferred from federal and state income tax.
- Tax-free withdrawals: Withdrawals for qualified higher education expenses are tax-free.*
See the full list of Hi529 tax benefits
*Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. See the Disclosure Booklet for more details on qualified expenses.
What impact does a 529 plan have on eligibility for federal financial aid?
529 plan assets are counted at different rates when calculating a student’s Expected Family Contribution (EFC) in the FAFSA formula. As of July 1, 2009, federal guidelines are as follows:
- If the student is a dependent, a 529 plan account is considered as the parent’s asset (if the account owner is the parent or the dependent student). As a result, it will generally be counted at a rate of only 3-6% of its value for the EFC.
- If the student is not a dependent and is the account owner, the 529 plan account is treated as the student’s asset and is generally factored into the EFC at the higher rate of 20%.
- In other cases, the account does not count as an asset for federal financial aid purposes. (However, a student may have to report distributions received from the account as income for these purposes.)
Note: Financial aid programs offered by educational institutions and other non-federal sources may have their own guidelines for the treatment of 529 plan accounts. For complete information about financial aid eligibility, you should consult with a financial aid professional and/or the state or educational institution offering a particular financial aid program, since rules and regulations often change.
Everything to open and manage your account
- Update your investment options.
- Change your contribution amount.
- Check your 529 balance.
- Make qualified withdrawals, and much more.