Frequently Asked Questions

General

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 higher education.

Learn More About Learning Quest

The Kansas State Treasurer's Office has contracted with American Century Investments to serve as the program manager, providing you with a variety of investment choices to best meet your needs. Select from:

  • Age-Based Tracks — Provide a convenient way to invest. You simply choose a Conservative, Moderate or Aggressive Track, or an Index Track, and Learning Quest does the rest. Investments are based on the age of your child. As your child gets older, you automatically move to a more conservative portfolio.
  • Static Portfolios — Offer a fixed-allocation strategy, meaning the amount of stock, bond and money market funds in the portfolios is set and will not change unless you choose to do so. You decide how long you need or want to stay invested.

Learn More About Investment Options

Learning Quest is administered by Kansas State Treasurer Jake LaTurner. 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.

A 529 Prepaid Plan generally allows families to purchase advance tuition credits or units to cover future attendance at a designated in-state public college or university. This is not an option in the Learning Quest 529 Education Investment Program.

The State of Kansas has selected American Century Investments 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.

All you need to open a Learning Quest account is $25 and the following information for yourself and the beneficiary:

  • Date of Birth
  • Social Security Number
  • Mailing Address
  • Investment Selections
  • Bank Account Number and Routing Number

You can enroll online, by mail or through your financial advisor if you have one.

The account owner maintains control of the account, which includes making 529 withdrawals and any changes to the beneficiary or investment.

Learning Quest is available to all U.S. citizens and residents who want to invest for 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.

Learn More About Who Can Contribute

Ugift® is a free service from Learning Quest that lets family and friends give the gift of college savings.

  • Account owners — Share the Ugift code and others can easily contribute to your account whenever they want. Their contributions are specifically coded to your Learning Quest account, so you don't have any paperwork or anything extra to do.
  • Gift givers — Make gift contributions online through electronic bank transfer or by check. Simply enter the Ugift code. You don't have to join, register or pay a fee.

Learn More About Ugift®

It's a free rewards program that deposits a percentage of your spending to a Upromise® account that can easily be synced to your Learning Quest account. Essentially, you're earning cash-back on your purchases and applying the funds to save for college.

Learn More About Upromise®

*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.

No matter which state you live in, you can invest in a Learning Quest account. Your child does NOT need to attend college in your home state. Check with a tax advisor about your state's rules.

Learning Quest provides a payroll deduction option for companies that want to offer employees a college investment solution. Learn more about how Learning Quest can enhance your company's benefits package.

Taxes

Regardless of how much you invest, these tax advantages help you maximize your college savings:

  • Tax-Deferred Growth — Earnings grow free of federal and state income taxes while in the account.
  • Tax-Free 529 Withdrawals — No income tax is paid on the growth of your account when withdrawals are used for 529 qualified expenses.
  • State Tax Deduction — Deduct your contributions from your taxable income. Check with your state for specific tax benefits. For example, Kansas taxpayers receive an annual adjusted gross income deduction of up to $3,000 (or $6,000 if you're married and filing jointly) for contributions per year, per child. The availability of tax or other state benefits (such as financial aid, scholarship funds and protection from creditors) may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.
  • Estate Planning & Accelerated Gifting — Reduce your personal taxable estate through accelerated gifting. This means you can make five years' worth of gifts up to $70,000 (or $140,000 if you're married and filing jointly) to your 529 account in a single year without being subject to gift taxes. This benefit is unique to 529 plans.

The difference between tax-free growth and taxable growth (in other investments) can be significant.


Tax Deferred Earnings Can Grow

Assumptions: $2,500 initial investment with subsequent monthly investments of $100 for a period of 18 years; annual rate of return on investment of 5% and no refunds withdrawn during the time period specified; taxpayer is in the 30% federal income tax bracket for all options at the time of contributions and distribution. This hypothetical is for illustrative purposes only. It does not reflect an actual investment in any particular 529 plan or any taxes payable upon non-qualified distribution.

 

Having your earnings grow free of income taxes while in your 529 account means you are putting your money to work for you.

 

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

Manage Your Account

You may use the account to pay for qualified education expenses at any accredited 2- or 4-year college, vocational or technical school, or graduate school anywhere in the United States. Your child does NOT need to attend college in your home state.

Federal law sets the standards for qualifying as an accredited post-secondary institution. An institution must offer credit toward an undergraduate or graduate degree, or other recognized post-secondary education credential and must be eligible to participate in federal student aid programs.

To determine if a school is qualified, 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.

Eligible expenses include tuition, mandatory fees, books, computers, internet access, required supplies and equipment, and qualified room and board costs.

No. Your child can attend any accredited 2- or 4-year college, vocational or technical school, or graduate school anywhere in the United States.

It is not required that your student attend college immediately after graduating high school.

Set up a recurring (or automatic) contribution online, by phone, or in writing through an Account Features Form.

To set up recurring contributions online:

  • Log in to your account with your user name and password.
  • Click on the Contribute icon on the right-hand side.
  • Select "Electronically from your bank account."
  • Select the beneficiary's account(s) the contribution applies to.
  • Enter the contribution amount.
  • Select "Recurring."
  • Choose the bank account or add a new bank.

Questions? Contact Learning Quest at (800) 579-2203, available weekdays from 8 a.m. to 5 p.m., Central time.

To set up an automatic tuition payment (to be paid on the same day each month), use the Account Features Form or do so online:

  • Log in to your account with your user name and password.
  • Select "View details" under the selected beneficiary.
  • Select "Manage systematic withdrawals."
  • Select "Set up a systematic withdrawal plan."
  • Enter the frequency, start date, stop date and withdrawal day.
  • Select "College or University."

To make an individual payment to a college, use the Withdrawal Form or do so online:

  • Log in to your account with your user name and password.
  • Select "View details" under the selected beneficiary.
  • Select "Make a withdrawal."
  • Select "College or University."

Questions? Contact Learning Quest at (800) 579-2203, available weekdays from 8 a.m. to 5 p.m., Central time.

Portfolio changes can be completed online, by phone, or in writing through an Investment Option Change/Future Allocation Form.

If you are requesting the change online:

  • Log in to your account.
  • Select "View details" under the selected beneficiary.
  • Select "Change investment options."

You may change your portfolio selection twice during the calendar year without having to change the beneficiary, as permitted by the IRS.

Questions? Contact Learning Quest at (800) 579-2203, available weekdays from 8 a.m. to 5 p.m., Central Time.

Make a 529 withdrawal online, by phone, or in writing through a Withdrawal Request Form.

To make a 529 withdrawal online:

  • Log in to your account with your user name and password.
  • Select "View details" under the selected beneficiary.
  • Select "Make a withdrawal."

Questions? Contact Learning Quest at (800) 579-2203, available weekdays from 8 a.m. to 5 p.m., Central Time.

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.

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.

Use Learning Quest's Financial Aid Calculator to estimate the amount of financial aid you may be eligible to receive. Using a savings vehicle that is treated as a parental asset, such as a 529 Plan, may help in the financial aid process.

The Free Application for Federal Student Aid is known as FAFSA. Here are answers to the 10 most common college aid questions and expert advice on completing and filing the FAFSA.

 

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

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.

The earnings portion of non-qualified 529 withdrawals is subject to federal and state income taxes and a 10% federal penalty.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.