Family & friends
Give that special child in your life a chance for a brighter future by helping him or her save for college.
When you save with the Direct Plan, you can:
Open an account for any beneficiary
You don't have to be related to the student (beneficiary) or live in the same state as he or she does. You can open an account on behalf of any special child in your life, even if someone else has already opened an account for that child.
Take advantage of tax breaks
If you're a New York taxpayer, and a Direct Plan account owner, you can deduct up to $5,000 ($10,000 if you're married filing jointly) of your account contributions when you file your state income taxes.* (If the child's parents invest your college savings gift in an existing 529 account, you won't be able to take this deduction.)
Learn about the Direct Plan's tax benefits
Keep control of the account
As the account owner, you control the account, not the child or his or her parents. So you decide where and when the money can be used.
Get your money back if your beneficiary doesn't go to college
If your beneficiary doesn't attend an eligible educational institution, you have several options for the funds remaining in your account without paying federal or New York State taxes. You may:
- Keep the money invested in the Direct Plan in case your beneficiary decides to attend school later, as there's no age limit on using the money.
- Change the beneficiary to an eligible family member of the beneficiary, without incurring taxes or penalties. You can make yourself the beneficiary if you’re an eligible family member.
- Repay certain student loans for your beneficiary or a sibling of the beneficiary up to a lifetime maximum of $10,000 per individual.
- Roll up to $35k of unused funds into a Roth IRA for the benefit of the beneficiary. Certain terms and limits apply.***
Also, you always have the option to withdraw the money from the account for other uses, although you'll pay a 10% federal penalty, as well as federal, state and local income taxes.**
