FAQ
General plan questions
Taxes
Investments
Using plan assets
For Kansas residents

General plan questions

What is Learning Quest?
Learning Quest is a tax-advantaged 529 college savings plan administered by the State of Kansas. It is designed to help people invest for the expenses of a higher education.

How does it work?
The Kansas State Treasurer's Office has contracted with American Century Investments® to serve as program manager, providing you with a variety of investment choices. You can choose between age-based and static options that best suit your risk tolerance and time horizon.

Who administers Learning Quest?
Learning Quest is administered by Kansas State Treasurer Ron Estes. The Treasurer develops rules and regulations to implement the program, selects the financial organizations to handle education savings accounts and ensures that all aspects of the program comply with federal, state and Internal Revenue Service guidelines.

Who manages Learning Quest?
The State of Kansas has selected American Century Investment Management, Inc., as the program manager. This premier investment manager, brokerage, and investment services company manages investor accounts, provides customer service, educates investors and communicates the benefits of the program. American Century Investments manages more than 80 mutual funds. It serves nearly two million individual and institutional investors.

How do I open a Learning Quest account?
There are two easy ways to open an account:

  • Individual investors: It's easy to enroll either online or by mail.
  • Investors using advisors: Enroll through your financial advisor.

Who can contribute to a Learning Quest account?
Learning Quest is available to all U.S. citizens and residents who want to invest for a higher education. There are no age, state residency or income requirements. Trusts and other organizations including corporations, government entities, and not-for-profit organizations may invest in the program.

Anyone can make contributions to an existing Learning Quest account - not just the account owner. It's easy for grandparents or other family members and friends to help you invest for a child's college education.

Who controls the account's assets and withdrawals?
The account owner maintains control of the account, which includes making withdrawals and any changes to the beneficiary or investment.

What is Ugift®?
Ugift is an innovative online feature for account owners. It lets you ask family and friends to celebrate birthdays, holidays, and other occasions with a gift contribution to your beneficiary's Learning Quest account. Here is one of the most meaningful gifts a beneficiary can receive: help toward a higher education. Learn more

What is Upromise®?
Upromise is a free to join rewards program that can turn every day purchases -- from shopping online to dining out, from booking travel to buying groceries -- into cash back for college. A percentage of your eligible spending will be deposited into your Upromise account. You can link your Upromise account to your eligible 529 account and have your college savings automatically transferred. Visit Upromise.com to learn more and enroll.

*Upromise is an optional service offered by Upromise, Inc., is separate from Learning Quest, and is not affiliated with the State of Kansas. Specific terms and conditions apply. Participating companies, contribution levels and conditions subject to change without notice. Transfers subject to a $25 minimum.

How will this account affect my student's eligibility for financial aid?
Federal financial aid may be available to a student even if a parent or student owns a 529 account. Part of the financial aid process is to determine a student's financial need. Parents will need to include 529 assets on which they are the Account Owner as an investment in calculating their net worth on the Free Application for Federal Student Aid (FAFSA). Assets in a 529 account owned by a student, or a custodian of the student, will also be considered assets of the parents. Assets held in a 529 account by someone other than the parents or student, such as grandparents, are not considered in the calculation for financial aid.

NOTE: This information is only a summary and not intended as advice. You should consult a financial aid advisor or the U.S. Department of Education's website at www.ed.gov for more information about financial aid.

What happens if I move?
No matter which state you live in, you can invest in a Learning Quest account. Check with a tax advisor about your state's rules.

Can my business or company offer Learning Quest as an employee benefit?
Learning Quest provides a payroll deduction option for businesses that want to offer employees a college investment solution. Learn more about how Learning Quest can enhance your company's benefits package. 

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Taxes

What tax advantages does Learning Quest offer?
There are a number of advantages, including tax-deferred earnings and tax-free qualified withdrawals*. Learn more

Are there any special tax benefits for Kansas taxpayers?
Kansas taxpayers receive an annual adjusted gross income deduction of up to $3,000 ($6,000 if married, filing jointly) for contributions per beneficiary, per year.

What are the Plan's gift- and estate-tax benefits?
You may contribute annually up to $14,000 per beneficiary without being subject to gift tax. In addition, you can take advantage of "accelerated gifting," making five years' worth of contributions ($70,000/$140,000 for spousal gifts) in a single year per beneficiary without incurring federal gift tax. Learn more

The availability of tax or other benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.

*Earnings on non-qualified withdrawals are subject to federal and state income taxes and a 10% federal penalty tax.

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Investments

What are my investment choices in Learning Quest?
Investors can choose either an age-based track or from a group of static portfolios.
  • Individual investors can choose from four age-based tracks and 13 static options ranging from aggressive to short-term including a money market portfolio.
  • Investors using advisors can choose from three age-based tracks and 8 static options ranging from aggressive to short-term. Additionally, you can choose from 12 individual fund options to create your own customized investment.
How can I request a change between portfolios?
Portfolio changes can be completed online, by phone, or in writing through an Investment Option Change/Future Allocation Form. You may change your portfolio selection twice during the calendar year without having to change the beneficiary, as permitted by the IRS.

Will I know how my account is performing?
Learning Quest will keep you informed about your investment's progress with quarterly account statements. You'll also receive a confirmation after each transaction, except for automated transactions. Each January, you'll receive an annual statement reflecting your account's entire history for the previous year.

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Using plan assets

How may the account be used?
You may use the account to pay for the student's qualified education expenses at an accredited postsecondary institution, generally anywhere in the U.S. If you take a withdrawal for other reasons, the earnings portion may be subject to a 10% federal penalty tax. Kansas taxpayers also will owe Kansas state taxes on the contribution portion of a non-qualified withdrawal that they previously deducted on their Kansas tax return.

How will I know if a school is qualified?
Federal law sets the standards for qualifying as an accredited postsecondary institution. An institution must offer credit toward an undergraduate or graduate degree or other recognized postsecondary education credential and must be eligible to participate in federal student aid programs.

To determine if a school is qualified, you can contact the school's office of admissions about its accreditation status. You also can check on a school's eligibility to participate in federal financial aid programs (which is an indication the school is an eligible educational institution) on the Department of Education's website.

What qualifies as a higher education expense?
Eligible expenses include: tuition, fees, books, computers, required supplies and equipment, and room and board at any qualified educational institution in the U.S.

Does my beneficiary have to attend college in Kansas?
No. Your beneficiary can use the assets at any accredited postsecondary institution, generally anywhere in the U.S.

What if my beneficiary does not go to college immediately after high school?
It is not required that your student attend college immediately after graduating high school.

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For Kansas residents 

What tax advantages are available for Kansas taxpayers? 
In addition to the tax advantages that a 529 plan offers, Kansas taxpayers also receive an annual adjusted gross income deduction of up to $3,000 ($6,000 if married, filing jointly) for contributions per beneficiary, per year.

What is the K.I.D.S. Matching Grant Program?
The K.I.D.S. Matching Grant Program was established to help qualifying households with their higher education investing needs. The Program provides matching funds of up to $600 for contributions to a Learning Quest account. Learn more

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