A plan is moving forward to help Maryland parents caught up in the problems with the state’s 529 College Savings plan.
The state’s 529 college savings plan, which is a state-sponsored investment plan that enables users to save money for a beneficiary and pay for education expenses, had an error that left hundreds of people unable to take money out of their accounts, due to an interest calculation glitch within the program.
Some parents said they were not able to tap the money they saved for years, while others said they lost tens of thousands under the plan. A new bill would help those parents by transferring control of the 529 plan to the office of Maryland’s treasurer.
Many hurt by the 529 plan, like Victoria Sansone, spoke at a state senate panel Wednesday about the challenges they faced without the money to pay college bills.
“This is scary. This is scary stuff,” Sansone told the panel. “I am literally shaking in my seat. You guys need to help us correct this, and get our money refunded.”
Another parent, Vicky Eavers, said she’s lost nearly half of her investment and her daughter is heading off to college in the fall.
“My family could never imagine that the state would pull the rug out from under us in the 11th hour,” she said.
Officials heading the 529 savings plan said an interest calculation error caused the problems plaguing Maryland families. Many parents said they have lost tens of thousands of dollars.
During the hearing, Maryland Treasurer Dereck Davis said his office is ready to take over control of the 529 plan but asked lawmakers for additional funding and staff. Lawmakers are pledging to fix the problem before the end of the legislative session.
