Massachusetts 529 Plan Rules And College Savings Options
Massachusetts has a 529 plan called UFund that can help you save for college. Massachusetts also has a 529 Able Plan as well.
If you live in Massachusetts, 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 Massachusetts. Each state has different rules when it comes to 529 plan savings. Here are the Massachusetts 529 plan rules.
Average Cost Of College In Massachusetts
When saving for college in Massachusetts, 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 141 colleges and universities in the State of Massachusetts.
The total average cost of college (Cost of Attendance) in Massachusetts for in-state residents is $27,158 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 $10,041 for 2022. The cost of tuition in Massachusetts has been rising at about 2% per year.
See how this compares to the average cost of college here. Keep in mind the average student loan debt by graduating class here.
Massachusetts 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 Massachusetts.
Contributions
Massachusetts offers a state tax deduction for contributions to a 529 plan of up to $1,000 for single filers and $2,000 for married filing jointly tax filers.
Minimum: There is no minimum contribution.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $500,000.
Program Bonus: Every baby born in Massachusetts will receive a free $50 deposit into a Massachusetts UFund 529 account.
Rollovers
Rollovers into the state plan are allowed and follow federal tax treatment.
Qualified Distributions
Qualified distributions from a Massachusetts and non-Massachusetts 529 plan are tax-free.
K-12 Education
Massachusetts 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
Massachusetts does conform with Federal law for using a 529 plan for student loans.
Rollover To Roth IRA
Massachusetts 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
A non-qualified withdrawal from a Massachusetts 529 plan is subject to state income tax up to the amount of past tax deductions (i.e. recapture).
Massachusetts 529 College Savings Plan Options
Massachusetts has several 529 plan options - one consumer plan and one pre-paid tuition program.
Massachusetts 529 Plan Facts
Massachusetts 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 |
|---|---|---|---|
Massachusetts U Fund Investing Plan | 269,135 | $8,803,321,057 | $32,710 |
Massachusetts U Fund Prepaid Plan | 5,199 | $91,370,014 | $17,575 |
Total | 274,334 | $8,894,691,071 | $32,423 |
Massachusetts UFund College Investing Plan
The UFund College Investing Plan is the name of Massachusetts' 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 Fidelity.
Open a UFund College Investing Plan here >>
Fees:
There is a program management fee of 0.09% to 0.14%.
The underlying funds all charge expense ratios from 0.05% to 0.95% depending on the investment option.
Who Should Use It:
We recommend that Massachusetts residents use the Massachusetts UFund 529 plan due to the tax benefits, low fees, and plan investment options.
We recommend that out-of-state residents could consider this plan.
Massachusetts UPlan Prepaid Tuition Plan
The Massachusetts UPlan prepaid tuition program issues tuition certificates that may be redeemed for a determined percentage of tuition and fees at Massachusetts colleges.
The minimum contribution is $300.
You can use the certificates for face value plus interest at out of state schools.
Massachusetts 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.
Attainable Savings Plan
The Attainable Savings Plan is a 529A plan open to all residents in Massachusetts. The plan is offered by MEFA (Massachusetts Educational Financing Authority).
This plan allows contributions of up to $18,000 per year from all sources.
It has no minimum contribution.
The plan has a program management fee of 0.20%.
You can open an Attainable Savings 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.
Massachusetts 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 Massachusetts Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Mark Kantrowitz
