Kentucky Education Savings Plan Trust

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Parents can now use Kentucky’s 529 plan for K-12 tuition

New law expands use of 529 account funds
Jul 13, 2018

FRANKFORT, Ky.—A new law going into effect July 14 will allow parents to use funds saved in a Kentucky Education Savings Plan Trust (KESPT) account to pay for K-12 tuition. KESPT is a tax-advantaged 529 savings plan designed to help families invest money for qualified education expenses.

Kentucky lawmakers amended legislation during the 2018 session to conform with the Tax Cuts and Jobs Act of 2017, which allows for expanded use of 529 account funds. Kentucky House Bill 434 gives parents the option to withdraw up to $10,000 per year from a KESPT account to pay tuition at an elementary or secondary public, private or religious school. Tuition is defined as the quarterly or semester charges imposed to attend an educational institution and required as a condition of enrollment.

“We encourage families to start saving for educational cost while their children are young, and timing is certainly a factor if a family is saving for K-12 tuition,” said David Lawhorn, KESPT program manager. “KESPT offers many advantages for Kentucky residents, and this new law gives families an opportunity to leverage those benefits for many years.”

Kentucky’s 529 plan provides a variety of professionally managed investment options. Not only can earnings grow tax free in a KESPT account, but withdrawals are also tax-free when used to pay for qualified education expenses. An account can be opened online at with $25, or $15 dollars per pay period if using automatic payroll deduction.

Parents also have the option of using KESPT’s eGifting feature to invite grandparents, family and friends to make gifts to a KESPT account for maximum growth potential. Funds may be transferred to another eligible family member if the beneficiary receives a scholarship or doesn’t need to withdraw the full amount saved.

Additionally, KESPT savings are not included in determining Kentucky need-based financial aid for beneficiaries of Kentucky residents who plan to attend college. (Federal and institutional aid programs may take the 529 plan account balance into consideration when determining eligibility, so account owners should check with their preferred institution and refer to the KESPT Plan Disclosure Booklet.)

For more information about KESPT, visit or call toll-free 1-877-598-7878. The plan is managed by TIAA-CREF Tuition Financing, Inc., a leader in 529 program management.

Download a flyer with more information!

No public funding is used for KESPT marketing, promotions or contest awards. Funding is provided by TIAA-CREF program manager for KESPT.

Consider the investment objectives, risks, charges and expenses before investing in the Kentucky Education Savings Plan Trust. Please visit for a Plan Disclosure Booklet containing this and other information. Read it carefully. Investments in the plan are neither insured nor guaranteed and there is the risk of investment loss.

The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. Taxpayers should seek advice from an independent tax advisor based on their own particular circumstances. Non-qualified withdrawals may be subject to federal and state taxes and the additional 10% federal tax.

TIAA-CREF Tuition Financing, Inc., Plan Manager. TIAA-CREF Individual & Institutional Services, LLC, Member, FINRA and SIPC, distributor and underwriter for the Kentucky Education Savings Plan Trust.


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