Kentucky Education Savings Plan Trust

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College savings can grow tax-free with Kentucky’s 529 Plan

Feb 22, 2017

FRANKFORT, Ky. — The Kentucky Education Savings Plan Trust (KESPT) is encouraging families this tax season to take advantage of the tax-free growth opportunity that comes with a Kentucky 529 college savings plan account. 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.

KESPT offers other advantages for Kentucky residents, too. An account can be started with as little as $25 and can be used at any qualified institution in the nation. Additionally, KESPT savings are not included in determining Kentucky need-based financial aid for beneficiaries of Kentucky residents. (However, other federal and institutional aid programs may take the amount in your account into consideration when determining eligibility so please check with your preferred institution and refer to the Plan Disclosure Booklet.)

“The cost of college continues to increase along with student loan debt for many families. Putting aside money in a 529 plan can help,” said David Lawhorn, KESPT program manager. “We encourage Kentucky families to start saving as early as possible. While families have many financial responsibilities, college remains a wise investment.”

College graduates may earn more over a lifetime, according to a 2015 study by the U.S. Bureau of Labor Statistics (Current Population Survey, 2015), a person with a bachelor’s degree earns a median income that is 68 percent higher than someone with a high school diploma. Over a 40-year career, the difference in earning potential can be more than $950,000. The difference is more significant for those who earn master’s, professional and doctoral degrees.

Parents can open a Kentucky 529 account by visiting and clicking the “Open an Account” button. While on the website, they can also invite family and friends to make secure contributions with KESPT’s eGifting feature. 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.

For more information about KESPT and tax advantages, 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.

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, distributor and underwriter for the Kentucky Education Savings Plan Trust.

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