Virginia 529 Review 2023: A Navigation Guide for Parents

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This Virginia 529 review takes a simplified look at hard-to-understand program. Use this page to help determine which plan and investment choices work best for your family.This Virginia 529 review evaluates the VA state college savings plans to help you make the best financial decisions for your college-bound children.

It also tries to clarify the various investment options and links to independent sources for investment performance and holdings information.

Unfortunately, the plan is confusing at times. In an effort to improve the program for parents over the years, the folks at VA 529 have made it too complicated.

There are too many options. Frequent portfolio name changes are difficult to keep up with. Private fund investment options need more transparency. Duplicative “portfolio” options achieve similar investment objectives but add to the plan’s complexity. 

The new Tuition Track Portfolio is an attempt to replace the previous PrePaid program (which proved unsustainable) and allay inflation fears. But it again complicates an otherwise banal investment objective (save enough money for college) by trying to simplify the process with “units” (why?). The program’s sustainability is untested. 

On the plus side, the plan offers multiple “Index Fund Portfolios,” which the author believes is the best option for DIY investors (those with novice to intermediate investment experience).

Those who are not confident in their ability to allocate an investment portfolio should stick to Target Enrollment Portfolios. But recognize they may to be too conservative, have higher fees, and lack some transparency. 

Another improvement is the user experience. The website is many times better than it was in 2012. Transfers are much easier now. 

However, the program structure of having separate “accounts” for each investment option further complicates things. This problem appears to be unfixable. But it allows wealthy college savers to reap greater tax benefits by investing $4,000 per year into multiple funds. This is now a well-established loophole.

Overall, the VA 529 program has good choices for conservative to aggressive investors. Pick one type of “Portfolio” you are comfortable with and stick with it.

The author also recommends maintaining control of your portfolio to match your investment objectives instead of relying on hired advisors and non-transparent funds. 

Please also read my related blog post How Our Family Is Saving For College.

Please note: The VA 529 college savings plan has changed names, products, and investments so many times over the years that it is hard to keep up. Some information on this page will be inaccurate or out of date. Do not make investment decisions based solely on information read here. Please perform personalized due diligence. Please also excuse any punctuation errors in this 6000+ word article. 

Note: If you see any inaccuracies or link updates that need to be made, please let me know by contacting me or stating in the comments below. Certain links to the website have been known to change, as do the Portfolio names. 


After my first child was born, I tirelessly evaluated a range of options for a tax-advantaged college savings program. I looked at various states’ plans and dug deep into the Virginia 529 plans. Since residents of Virginia can deduct contributions they make to the Virginia 529 plan (and cannot deduct contributions if participating in other state plans), VA 529 is the best option for residents.

Despite being the best option and being ranked as a top plan nationally, it still has plenty of flaws.

For starters, the literature on the website is unnecessarily wordy, especially for the Invest529 program.

As a money nerd doing my own research, I knew others must struggle to interpret all the plan variations. At the same time, I started the Retire Before Dad finance blog, which gave me a platform to share my findings.

I’m a parent and plan participant. Read more about me here.

To complicate things further, the VA 529 folks have changed the names of the various portfolios several times over the past decade. That confuses parents and causes me headaches as I need to update this post every year or so. 

I hope you find this information helpful. This page has become the leading independent resource for understanding the Virginia 529 plan. It’s also a place to advocate for improvements to the plan. Parents want:

  • Affordable in-state college opportunities
  • Excellent tax benefits for investing in the Virginia 529
  • Diverse, low-cost investment options
  • Impeccable plan transparency
  • A modern website interface for Invest529 participants (still needs major improvements), or abandon the in-house administration and outsource it to a reputable low-cost third party such as Vanguard
  • Modern account features (e.g., one account that holds all funds, no separate accounts, easy transfers)
  • Simplicity (needs improvement)
  • Ease of payment to in-state or out-of-state colleges

Unfortunately, we don’t always get these things.

Virginia 529 Review Basics

According to the Virginia 529 website, it is the nation’s largest 529 program, with more than $54 billion in assets. Virginia residents who participate in the plan can contribute up to $4,000 dollars per each savings trust account, which is tax deductible from their Virginia state return, but not a federal tax return.

So if you contribute $4,000 and live in Virginia, you pay taxes on $4,000 less than you would have if you did not contribute.

For example, if you have more than $17,000 of taxable income (if you are reading this, you probably do), and you contribute $4,000 to a Virginia 529 program account, you do not pay taxes on that $4,000.

The savings is 5.75% (the state income tax rate) of $4,000, or $230, on your Virginia tax return. That’s a 5.75% return on the $4,000 investment.

That $4,000 is contributed to one of the four Virginia 529 programs. The money grows tax-free, meaning you do not pay taxes on any gains.

VA 529 Tax Deduction Explained

The VA 529 tax deduction law needs to be clarified, and information on the internet varies. I found this link to a Bogelheads forum which helps explain it and adds the actual text from the law and a ruling on the law.

From what I’ve read, you can take a $4,000 tax deduction for each account per owner and per beneficiary. So if you have two children, and you and your spouse each open one account for each child, that’s four accounts. You can contribute $4,000 to each account equaling $16,000, and take that amount in deductions per year.

Furthermore, when you invest in a Virginia 529 Invest529 fund, each purchased fund is opened in a separate “savings trust account”. $4,000 for each of those accounts can then be deductible for each child per account owner. Any amount over $4,000 in an account can be carried over to the next year.

Based on the forum post linked above, it appears you can deduct an almost unlimited amount if you open separate accounts by each owner for each child and use the Virginia 529 Invest529 selection of funds.

From what it seems, the law was written with the intent to limit deductions to $4,000 to each child. However, they built the information technology platform by creating a separate “account” for each fund invested in.

Either this was a bureaucratic oversite, or the loophole was implemented to favor those who can invest more than $4,000 per year.

Of course, don’t rely on tax advice from an internet forum or my blog. Consult the written law directly yourself or contact a Virginia-based tax adviser.

The Virginia 529 Plans

Invest529 (formerly Virginia 529 inVest) – The Invest529 program is a top-ranked national program but still has limited and convoluted investment options. This is the plan I use for my three children, reluctantly, due to the lack of diverse investment options and the challenged website user interface.

The VA 529 people have significantly improved the user interface over the past decade. Particularly in the area of transfers.

However, the inherent structure of the plan (designating each fund as an “account”) makes this program quite confusing.

But it’s the best we got. 

I try to simplify it as much as I can below. While it is confusing, some of the investment choices, “Index Portfolios”, are excellent.

CollegeAmerica 529 – This option is in partnership with American Funds, a notoriously high-fee-managed mutual fund company. You must open an account through a financial adviser to enroll (and you’ll pay adviser fees too). 

Prepaid529 (formerly Virginia 529 Prepaid) – Prepaid529 is PERMANENTLY closed for new enrollment. It is only relevant now for previous enrollees. 

Virginia Invest529 — The Virginia 529 Investment Options

The Virginia Invest529 program is administered by the people at Virginia 529. If you choose this option, you create an account on the website and choose your investment strategy.

My three kids have Virginia 529 accounts in the Virginia Invest529 program.

I chose this plan because it has the most diverse and low-cost option. The plan offers an OK number of options for investments.

You can find a link to the Invest529 Program Description here.

A big challenge with this program over the years is that they keep changing the various portfolios’ names.

Maybe I see this more than everyone else because I have to update this blog post with all the changes!

As of January 2023, there are five types of portfolios. 

  • Target Enrollment Portfolios
  • Index Portfolios (the author prefers these for his children)
  • Target Risk Portfolios
  • Principal Protection Portfolios (including Tuition Track)
  • Specialty Portfolios

Hopefully, they are getting closer to finding the permanent names for these. 

Target Enrollment Portfolios (formerly Age-Based Portfolios)

As of January 1st, 2023, the age-based portfolios have changed names to Target Enrollment Portfolios. The table below lists the new names (which represent the year your kids will start college), the old names, recommended age, and the asset allocation profiles.

Portfolio Name For Ages Allocation as of Dec 2021
 2042 Portfolio  0-3  85.8% Equity/14.2% Fixed Income
 2039 Portfolio  0-3  80% Equity/20% Fixed Income
 2036 Portfolio  4-6  71.4% Equity/28.6% Fixed Income
 2033 Portfolio  7-9  58.3% Equity/41.7% Fixed Income
 2030 Portfolio  10-12  50% Equity/50% Fixed Income
 2027 Portfolio  13-15  30% Equity/70% Fixed Income
 2024 Portfolio  16-18  8.3% Equity/91.7% Fixed Income
 2021 Portfolio  Closed  0% Equity/100% Fixed Income

The Target Enrollment Portfolios are meant to be “buy it and forget it”. If you contribute to one of them, the fund will change over time, so you will not need to adjust.

So if you start buying into a fund when your child is a newborn, the fund’s asset allocation will be more aggressively geared toward stocks. For example, 80% to stocks and 20% to bonds.

As the portfolio ages, along with your child, the asset allocation changes to a greater percentage of fixed income and fewer stocks until the child is college age, at which point the fund would be 100% invested in safer, fixed investments.

The Target Enrollment Portfolios are made up of thirteen underlying investments (and they’ve changed little since 2012). You can find the list of underlying investments in the Program Description by searching for “Underlying Investments of the Target Enrollment Portfolios”.

According to the program description, there is a description of the “Investment Managers”. These are the people who select the underlying investments. It is a little vague, so interpret as you will:

“VA529’s Board is responsible for long-term Asset Allocation guidelines, Asset Allocation strategy, and the investment manager selection policy. Upon the Board’s direction or at the direction of VA529’s Chief Executive Officer, the Board’s Investment Advisory Committee is responsible for, among other things, Virginia529 Invest529 — Program Description interviewing, selecting and/or terminating investment managers, including Mutual Funds, that professionally manage the moneys within Invest529. In carrying out these duties, the Board and the Investment Advisory Committee consult with the Board’s investment consultant.”

The investment consultant is listed later in the document as Mercer Investment Consulting, Inc.

I found no clear listing of the members of the Investment Advisory Committee, but members of the Board of Directors staff it. 

This should be stated more clearly on the website, but it is not, or I need help finding it. If the Virginia 529 people happen to be reading this, please point me to the correct location of this link, or add it to your website, and I will add it here.

Below is a list of the Underlying Investments for the eight Target Enrollment Portfolios.

Of all of the thousands of mutual funds, index funds, and ETFs in the country, they chose only 13 underlying investments. However, some of these are index funds that we like. 

The funds with a symbol are actual mutual fund investments. Click the link to see an independent summary of the investment on Yahoo Finance. The funds listed as N/A are not publicly available. As listed, they are specific investment accounts for the VA Invest529.

It would be nice to have more information on these funds for transparency’s sake, but I cannot find it.

Investment Manager Asset Class Fund or Separate Account Symbol
Sands Capital Management Emerging Markets Equity Touchstone Sands Capital Emerging Markets Growth Fund TSEGX
Blackstone Property Advisors L.P. Private Real Estate Limited Partnership N/A*
Capital Research and Management Co. International Equity American Funds EuroPacific Growth Fund RERGX
DFA Investment Dimensions Group, Inc. Emerging Markets Equity DFA Emerging Markets Core Equity Portfolio DFCEX
Invesco Advisers, Inc. Stable Value Separate investment account for Invest529 Invesco Site
PGIM Fixed Income High Yield Bonds Separate investment account for Invest529 N/A*
Neuberger Berman Investment Advisers Emerging Markets Debt Separate investment account for Invest529 N/A*
Wellington Management Company International Equity Common Trust Fund Try to find it
UBS Realty Investors LLC Private Real Estate Limited Partnership N/A*
Vanguard U.S. Real Estate Vanguard Real Estate Index Fund VGSNX
Vanguard Market Fixed Income Vanguard Total Bond Market Index Fund VBMPX
Vanguard Small-Cap Domestic Equity Vanguard Small-Cap Index Fund VSCIX
Vanguard Large-Cap Domestic Equity Vanguard Institutional Index Fund VIIIX
WordPress Table

* The Virginia 529 provides limited details on these investments. The lack of transparency of these investments may be unacceptable to some investors. Invest at your own risk.

If you invest in one of the Target Enrollment Portfolios, a separate account is opened for the beneficiary (for your kid, with you as the owner).

It’s implied that the Target Enrollment Portfolio investment options are the only funds needed to buy to keep things simple and risk-appropriate.

They will administer the investments, and you can sit tight for the next 18 years and your money is safe. You chose the portfolio based on your child’s age.

These are all fairly conservative investments, as they should be. But you need to decide if they are allocated to fit your risk tolerance.

I originally decided to put half of my son’s savings into a Target Enrollment Portfolio for my son. However, later I moved it out because it was too conservative for me. I’ve since put most of the other contributions towards the total market stock fund and will continue to do so until he is around 12 years old.

Index Portfolios

Index Portfolios track the performance of a broad market benchmark. These Portfolios typically offer lower fees than other investment options.

These low-fee index funds are what make the Virginia 529 plan a top plan on a national level.

These are the simplest of investment products, and essentially, all that most DIY investors need. 

If you are a DIY investor who understands basic investing, use these funds to create a simple portfolio that matches your risk tolerance based on your child’s age. 

I almost exclusively invest in these funds now and would recommend them to a family member (like my kids).

Here are the underlying Index Portfolio funds. These are low-cost Vanguard Index funds, so you can rest assured the fees are as low as they’ll get. 

Invest529 Portfolio Allocation Manager Fund Symbol
Total Stock Market Index 100% Vanguard Total Stock Market Index Fund VSMPX
Total Bond Market Index 100% Vanguard Total Bond Market Index Fund VBMPX
Total International Stock Index 100% Vanguard Total International Stock Index Fund VTPSX
Inflation-Protected Securities 100% Vanguard Inflation-Protected Securities Fund VIPIX
REIT Index 100% Vanguard Real Estate Index Fund VGSNX
WordPress Table

Target Risk Portfolios (Formerly “Passively-Managed Static Portfolios”, also Formerly “Non-Evolving Portfolios”)

The following portfolios have been chosen by the Board of Directors/Investment Advisory Board with the help of Mercer Investment Consulting.

I think the idea was to try to help parents invest based on their risk tolerance instead of the target enrollment date.

But these Portfolios make the plan more confusing, in my opinion.

The underlying portfolios use combinations of the Target Enrollment Portfolio underlying investments plus some of the Index Portfolio underlying investments. But these mostly mimic the Target Enrollment Portfolios. 

I will not include a table of the Target Risk Portfolios here because they are over-complicated. You can find it here (but don’t waste your time). 

The first three, Aggressive Growth, Moderate Growth, and Conservative Income are OK investment choices for most people.

They are made up of low-fee Vanguard funds. However, I would avoid the three “active” portfolios below. They are overly complicated, and there is less transparency (because they use the “N/A” private funds in the Target Enrollment Portfolio table above).

Index fund investing will match market performance. Most actively managed funds do not over long investment periods. 

Here is a link to a recent study by Vanguard called The Case for Index Fund Investing. If you look at the data, about 80% of actively managed funds do not beat their target index. There’s plenty of information on the internet regarding indexing vs. active management.

That’s essentially the decision you are making when investing in the Virginia Invest529 program.

I prefer to choose my own allocation using the Index Fund Portfolios instead. 

But here they are:

  • Aggressive Growth — 80%/20% Equity/Fixed Income
  • Moderate Growth — 60%/40% Equity/Fixed Income
  • Conservative Income — 20%/80% Equity/Fixed Income
  • Active Aggressive — 85.8%/14.2% Equity/Fixed Income
  • Active Moderate — 55.54%/44.46% Equity/Fixed Income
  • Active Conservative — 22.77%/77.23% Equity/Fixed Income

Principal Protected Portfolios

Principal Protected Portfolios is a new name for an old product category.

These portfolios help to preserve capital as your child gets close to college age. 

You don’t want to be 100% in stocks when they are 17 years old. So these investments are a bit more conservative to preserve capital before you’re about to spend it on tuition. 

Here are the three options:

  • Tuition Track Portfolio
  • FDIC-Insured Portfolio
  • Stable Value Portfolio
The Tuition Track Portfolio

Leave it to the VA 529 folks to make saving for college even more confusing and complicated. 

The Tuition Track Portfolio appears to be an attempt to replace the Virginia PrePaid529 program that was canceled (likely due to being unsuccessful because of varying tuition rates among state schools).

Instead of saving money (something everyone understands), the Tuition Track converts the average VA tuition amount into “units”, and parents buy those.

Whatever the average tuition cost is in Virginia in a year, divide that by 100 to get the value of 1 unit. For example, if the average tuition is $14,500, one unit costs $145. 

The value of one unit increases each year. 

Basically, 100 units equal one year of tuition. But if the school your child attends is more expensive than the average, you will owe more money. 

Units may be purchased through June 30th, and the new unit value (based on average tuition for the next school year) of one unit changes on July 1st. 

Units cannot be used until three years after purchase. 

Presumably, the money used to purchase units is invested into a portfolio of previously discussed underlying investments. 

The Author’s Opinion on Tuition Track: Full disclosure, my kids are 10, 9, and 7 at the time I write this sentence. I will not be participating in the Tuition Track Portfolio program.

If my first child was born today, I would not participate. 

This is a gimmicky portfolio designed to assuage fears of general inflation and tuition inflation. Something didn’t work with the PrePaid program (see below), and this is an overthought way to replace it. 

Instead of simplifying choices for parents and guardians, VA 529 has created yet another complicated option without enough transparency.

Its long-term viability is untested, and the program is designed for in-state schools, not out-of-state, where many of our kids are going due to underinvestment in Virginia universities. 

Our colleges can’t accept all of our smart kids, and they leave. 

The unit system seems unnecessary.

All they needed to do was create a Portfolio called Tuition Tracker Portfolio and aim to earn a return equal to the VA tuition inflation rate of “almost 5%”.

Guarantee the rate of return equal to tuition inflation every year. Over longer periods, the investment advisors could certainly earn more than the “almost 5%” average tuition increase rate.

New parents can form their own opinion on the Tuition Track Portfolio and participate accordingly.

I did not recommend the PrePaid program at the time, and I’m not recommending this one either. I prefer to keep dollars in my control instead of investment advisors.

Index funds are the best way to do this. You need to save and invest in providing enough funds for your child’s education. 

We have enough to think about when saving for our kids’ futures rather than train our brains to understand a new VA 529 program that will change its name and format next year. 

FDIC–Insured Portfolio

This portfolio is a savings account. Only use this if your child is close to college and you want a risk-free savings rate. 

Now that rates have increased, this may be a good option for people. 

You get a competitive APY through the “Atlantic Union Bank Omnibus Savings Account”, plus the tax savings. 

With the tax savings, you can likely beat your FDIC-insured bank account. 

Stable Value Portfolio

The Stable Value Portfolio is invested entirely in a separate investment account managed by Invesco Advisers, Inc.

This is a private fund with a very high expense ratio.

You can learn more about it here

Invesco invests in investment contracts referred to as “wrap contracts”. The investment or wrap contracts utilized provide for minimal fluctuation in principal values, but the Stable Value Fund is not guaranteed by Invesco or any other entity.

I’ve been in finance for almost thirty years, and I’ve never heard of a wrap contract.

The fund is essentially a short-term bond fund.

The fund seeks to produce a stable return while avoiding negative returns.

Upon review, VA 529 has not provided sufficient evidence that the Stable Value Portfolio is better than a risk-free FDIC-insured account. 

With a barf-inducing 0.81% expense ratio and 5-year returns below 2%, I recommend avoiding this fund and using the FDIC-insured fund or cash instead. 

Specialty Portfolios

Specialty Portfolio is a new name for an old product category. 

There are two Specialty “Portfolios” as of writing:

  • ESG Core Equity Portfolio (Parnassus Core Equity Fund)
  • Global Equity Portfolio – A fund of funds.
ESG Core Equity Portfolio

The ESG Core Equity Portfolio is a new name for an old product. ESG means environmental, social, and governance. Basically, these are investment products for people who want to feel like they are investing with a conscience. 

No investments in guns, oil, gambling, alcohol, tobacco, etc. 

Pure ESG investing is dubious and subjective. 

The Socially Targeted Parnassus Equity Income Fund has been with VA 529 for at least a decade and has performed well against the market.

ESG Core Equity Portfolio = Parnassus Core Equity Fund (symbol: PRILX)

Again, VA 529 has complicated things by changing the name. It’s just a mutual fund. 

Global Equity Portfolio

The portfolio seeks to maintain a fixed Asset Allocation of 100% equity, which will include U.S. and non-U.S. equity.

It is a fund of funds, investing in these four investments as of writing:

  • Vanguard Total Stock Market Index Fund (VSMPX) — 50% allocation
  • American Funds Europacific Growth Fund (RERGX) — 20% allocation
  • Wellington Management Company LLP Emerging Markets (private, non-transparent) — 20% allocation, fees a mystery
  • American Funds SMALLCAP World Fund (RLLGX) — 10% allocation

Not sure why the investment advisors had to complicate things. They could have achieved a similar portfolio with the Vanguard Total World Stock Index Fund Admiral Shares (VTWAX, 0.10% expense ratio), which has 9,590 holdings as of 11/30/2022. 

However, upon inspection, the three public funds all have very low expense ratios. So this fund Portfolio is OK for growth, diversification, and low fees. 

Use the Index Portfolio funds to achieve a similar objective and better transparency (no Wellington Management Company emerging markets fund). 

Downsides of the Invest529 Program

Three glaring problems have emerged since opening my son’s account in 2012.

  • Overly Complicated (name changes, product changes, redundancy)
  • Still a Terrible User Interface
  • Poor Account Structure
  • Lack of Fund Transparency
Overly Complicated

There are too many Portfolio options. I understand VA 529 wants to give everyone good options for their risk tolerance, but there are too many. It needs to be simplified further. 

The Target Risk Portfolios could be eliminated, as could the Global Equity Portfolio (fund of funds).

CollegeWealth is obsolete and unnecessary with the FDIC-insured portfolio (but still on the VA 529 website as of January 2023).

The Tuition Track Portfolio is overthought. It should only be one fund that guarantees a rate of return equal to tuition inflation (“almost 5%”).

The idea of converting dollars (which everyone understands) to “units” (which is a made-up term that complicates things) was a bad decision. Why?

Terrible User Interface

The website user interface used to log in, view, and update your account is still very bad after many years of improvements. 

The Virginia 529 plan has invested a lot of money into the main website, and it is unique, fairly easy to navigate, and informational. It uses modern technology and design and is generally a pleasant website. But it’s a bait and switch.

Once you open an account and log in, the interface is archaic, ugly, difficult to navigate, poorly organized, a hugely disappointing. As in, why did I open an account with Virginia Invest529? disappointing.

For the most part, you can figure out everything you need to do here, but nothing is easy.

Despite improvements, the Virginia 529 is nothing close to a standard online bank or brokerage accounts. Have low expectations. 

Poor Account Structure

For every fund or ‘portfolio’ you select to invest in, a separate account is created. So when you have money withdrawn from your bank account to deposit, a separate withdrawal is made from your bank account.

To help explain, take an IRA plan with any large company like Fidelity or Vanguard as an example. Let’s say you want to invest $400 per month into your account. A withdrawal of $400 is automatically made from your bank account by Fidelity, then Fidelity takes that $400 and puts $100 into four different mutual funds of your choosing. When you get a monthly or quarterly statement, all four funds are summarized on one statement. Simple, right?

With the Virginia 529 plan, if you used the same amount of money on a monthly basis, VA 529 would make four separate debits from your bank account of $100 each on the same day, and purchase shares in four separate accounts. Each fund has a separate account number.

Recent improvements have been made to the Invest529 statements. You no longer get a separate page for each account every month. Now statements are consolidated by plan and participant. So my daughter’s three different fund holdings show up on one statement, even though each fund is a separate account.

This goes back to the tax deductibility confusion.

Despite recent statement enhancements, there is an obvious flaw in the way their data is set up and the relationships they have with their fund providers. This terrible system discourages diversifying your portfolio, makes inter-fund transfer difficult, and pushes the participant to choose one age-based portfolio for simplicity.

Had they used a professional company such as Fidelity or Vanguard to administer their plan, this issue would not be present. Instead, they chose to build their own customer portal (which sucks), surely at a great cost, and they are forever in the information technology (IT) business now, along with the college savings business.

This was obviously a poor decision that the Board of Directors or the Virginia legislature made a long time ago that probably cannot be corrected. What’s needed is a significant investment in their IT architecture, including back-end processing and a better user interface for their participants, instead of a prettier public-facing website.

These two problems made me seriously consider other options for my children’s college savings. But the tax benefits outweigh the annoyances.

Lack of Fund Transparency

Most of the information you need to understand the Virginia 529 plan is available on their website. However, it’s extremely complicated and difficult to decipher. The VA 529 Board should consider simplifying the plan to help with transparency.

Six out of 13 underlying investment funds that make up the Target Enrollment Portfolios have limited accessibility for independent research from a third-party website. The funds include:

  • Blackstone Property Advisors L.P.
  • Neuberger Berman Investment Advisers
  • Invesco Advisers, Inc.
  • PGIM Fixed Income
  • UBS Realty Investors LLC
  • Wellington Management Company

The Advisory Board should make more independent research data available for these funds or choose alternatives to improve transparency.

CollegeAmerica 529 Review

Next is the CollegeAmerica 529 plan administered by American Funds. In some independent reviews, CollegeAmerica 529 has ranked as the best of the four VA plans and ranks high nationally. I did not give much consideration to this plan for my family for two reasons.

First, I had a previous 401k plan that only invested in American Funds, so a large portion of my net worth was in their hands already (I’ve since transferred the account to Fidelity). For the sake of diversification cost control, I chose to avoid the use of American Funds.

Second, the plan REQUIRES you to open an account with a financial adviser instead of just signing up online. This is a deal-breaker for me because I prefer to manage my finances myself and like to have access online to make decisions.

Reading more into this plan, I learned that once you sign up you do have online access, but finding a broker is another step you would have to take to use this plan. That means screening numerous brokers to find one you like and can trust and is not about to retire.  Or, the website does say you can simply call a number, and they will set you up with an adviser if that is your cup of tea. But you will likely be stuck with whoever answers the phone that day and not necessarily the best person for you.

If you already have an adviser who is qualified to open a Virginia 529 account for you, this may be a good option. When you bring in an adviser, you are guaranteed to introduce greater fees on your account. On the plus side, the CollegeAmerica 529 plan would open up a much larger pool of investment options, although they are all American Funds that have notoriously high expense ratios.

Again, introducing an adviser usually increases fees. The expense ratios for those funds are available in the prospectus. In addition to the fees, all advisers want to grow their relationship with you and your money over time. So you can expect calls from your adviser offering more advice and asking you to give them your non-education money to be placed into more American Funds.

I happen to know a Virginia financial adviser qualified to open a CollegeAmerica 529 account. He said it’s sort of a hassle because most people inquiring have small asset bases. Meaning they aren’t wealthy. If you aren’t wealthy and you contact an adviser, they often aren’t willing to spend a lot of time with you. If you are wealthy, they’ll want to sell you more services. Lose-lose, in my view. But I’m biased.

If you do choose an adviser, make sure they are a “Fiduciary”. Ask them point blank Are you a fiduciary? If they are, they are required by law to put your best interests first. Most advisers are not fiduciaries and therefore put their own best interests first. Read more about fiduciaries here or google it.


The CollegeWeath program is simply a bank account with either BB&T or Union First Market Bank (click the bank name for the program description).

These bank savings accounts are for very conservative savers and only really make sense for a child who is within five years of attending college. But the age-based portfolios are also designed for kids approaching college, so again, choose based on your risk tolerance.

The CollegeWealth program has the same tax savings for up to $4,000 per year (increasing your VA tax refund by $230) as the other plans, and the bank accounts pay a modest interest rate. This money grows tax-free in the account.

The positives I see from this plan is that both banks let you sign up online, linked from the Virginia 529 website. Also, the relatively high bank rates and FDIC insurance that comes with a bank account are positives. While it has some basic highlights, I would not consider this option for my children because it is too conservative over 18 years. When my son is 14, maybe I’ll look into it again, but there are conservative options in the Invest529 plan that would be comparable to a savings account.

The whole concept of this plan could have been incorporated into the Invest529 or CollegeAmerica 529 plans very easily, and essentially already is. So this program is unnecessary in my opinion and was likely a gift to the banks by someone in the VA legislature or Board of Directors when the program was initiated…

Note: As of 01/01/2017, the FDIC-Insured Portfolio is now available as a “Principal Protected Portfolio”. It’s an “omnibus bank savings account with Union Bank & Trust”. In other words, it’s a money market fund. Availability of the FDIC-Insured Portfolio could be the first step in eliminating the CollegeWealth plan altogether (in my opinion), as it renders the CollegeWealth plan redundant and not necessary (which I’ve been saying for four years now). 

Virginia Prepaid529 (CLOSED)

Prepaid529 is PERMANENTLY closed for new enrollment. It is only relevant now for previous enrollees. 

This program allowed parents to prepay college tuition and fees at a given price today. When the child is college-aged, the program pays out money for the child’s education. The child may go to a public or private Virginia college, and money can also be paid to out-of-state schools. However, the amount paid out varies between Virginia public, private, and out-of-state.

TRANSLATION: the best deal is going to an in-state public college.

There was a limited enrollment period during the year and the account owner must be a resident of Virginia at the time of the account opening. For more detail on this plan and the others, I suggest going directly to the Program Description PDF on their website. Click here to find a link to the Program Description for the Virginia Prepaid529.

The plan was meant to allow a parent to save money by prepaying tuition at today’s college rates, and the student’s college would be paid for at the time they are ready to attend at age 18.

I did not choose this option because, first and foremost, the right college for my children may not be in the state of Virginia. The ability to transfer the amount paid to another state 18 years from my son’s birth is likely uncertain. According to page 10 of the Program Description, “Some Out-of-State Institutions will not accept payments directly from a third party such as prePAID” requiring the account owner to transfer the money to another account.

This is a headache indicator.

Additionally, the way this program is calculated today could change and you never know how long it will last. There is also a limited enrollment period. If your child is destined to go to some in-state public college or university, maybe this program is for you. But the uncertainty and questionable choices for out-of-state colleges make this a plan I’ve stayed away from.

Comparing the Other States Plans to Virginia

Look, there are some great websites out there for comparing the plans of different states.  I especially recommend as an objective source for all things 529. But they focus on all of the plans, not just Virginia 529.

There are also plenty of rankings.

But if you are a Virginia resident, you need to keep this simple fact at the forefront of your mind: Virginia residents who pay taxes in Virginia and participate in one of the Virginia 529 plans are the only people who can get a Virginia state tax deduction from investing in their 529 plan.

If you live in Virginia and open an account with another 529 plan not associated with the state of Virginia, you will not get to deduct the $4,000 from your VA tax return.

I did look at the programs with Fidelity (NH, DE, AZ, Mass), TD Ameritrade (NE), and Vanguard (NV, IA, CO, NY, MO) in my search.  But ultimately for my daughter’s new plan, I chose to go with the Virginia 529 Invest529 plan again because of the low fees and few acceptable investment options.

Virginia 529 Review 2023 Summary and Rating

These ratings are my opinion and comparable to other similar financial products, such as online brokerage accounts and retirement savings plans. Not compared to the other state 529 plans.

Ease of Use

If participating in the Virginia 529 was easy, this web page would not be necessary. The plans are very difficult to understand.

The Virginia Invest529 plan was poorly designed from the beginning, both from a data structure perspective and for the user. The program is in need of significant investment to modernize the platform and program. The user interface is terrible. Keep your expectations very low.

Every aspect of using the platform is confusing, arduous, and counter-intuitive.

Investment Selection

The funds available in the Index Fund Portfolios are excellent. Vanguard is known for its low-fee index funds. These funds are suitable for most VA 529 investors.

The other Portfolios are funds of funds, using the Target Enrollment Portfolio investments. Some of these lack transparency and the expense rations are not forthcoming without third-party digging. 

The CollegeAmerica 529 plan provides access to additional funds, however, the quality is lower due to high fees. A broader selection of funds in the Virginia Invest529 plan and access for advisers to the platform would be enough to eliminate the CollegeAmerica 529 plan.

Having spoken to Virginia-based advisers qualified to help VA residents with CollegeAmerica 529, there is little incentive for them due to the small size of most accounts. Having this option complicates the plan, increases fees, and serves as a lead magnet for advisers.


The funds available in the Index Portfolios have low fees and are good. But the CollegeAmerica 529 fees are very high due to the notoriously high expense ratios of American Funds with little evidence of index outperformance. Savers suffer additional fees from the requirement of working with a paid adviser.

Also, some of the funds in the Target Enrollment Portfolio underlying funds carry higher fees than necessary.

The VA 529 Board can lower the fees even further by choosing a lower-cost partner such as Vanguard instead of American Funds.

Tax Advantages

VA residents can save up to $4,000 per child per accounts, lowering their State income taxes. Thanks to the poor design of the Virginia Invest529 investing platform, you can have numerous “accounts” per child because each holding is considered an account. Therefore, you can save more than $4,000 per child. Speak to your CPA to confirm this before implementing.

Non-Virginia residents do not receive tax benefits.

Virginia 529 Review
  • Ease of Use - 6/10
  • Transparency - 7/10
  • Investment Selection - 9/10
  • Fees - 8.5/10
  • Tax Advantages - 9.5/10


Overall, the Virginia 529 is a top plan nationwide, but still suffers from significant shortcomings. Virginia residents saving for college should utilize VA 529 for the tax advantages, but keep your expectations low. You will be confused. Choose the Portfolio you understand best and stick with it.

** I am not a tax or investment professional. Contact your tax adviser for your specific tax implications. Also please view the Disclaimer page. The opinions expressed on this website are my own and should not be considered advice. Consult your own investment adviser to determine the best investment vehicles for your needs and risk tolerance.

Note: If you are a representative or affiliate of the Virginia 529 Board and would like to correct or challenge anything on this review page, please contact me. I’m also available to engage in dialog regarding possible plan improvements. Congratulations on your rankings, but the plan still needs improvement. Note to readers, the Virginia 529 Board has not contacted me to influence or dispute anything on this page. 

Thank you for reading and commenting on my Virginia 529 review.

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