NU Online News Service, July 27, 2:25 p.m. – The Virginia College Savings Plan, Richmond, Va., a state agency, has picked American Funds Distributors Inc., a subsidiary of The Capital Group Companies Inc., Los Angeles, to run the Virginia 529 college savings plan.
Virginia is one of many states that have set up 529 programs in recent months.
The state already offers the Virginia Education Savings Trust program and the Virginia Prepaid Education Program, but Section 529 of the federal Internal Revenue Code offers generous tax breaks on federal income taxes for residents of states that set up new college savings programs that meet Section 529 criteria.
American Funds will run the Virginia program under the “CollegeAmerica” brand name. The company hopes to make the program available nationally in February 2002.
American Funds will start by offering investors a choice of six funds, including a growth fund, an international fund, a balanced fund and a cash management trust.
Virginia residents can set up CollegeAmerica accounts to pay for college expenses for their children, grandchildren, friends or spouses. Residents can also use the accounts to pay for their own college expenses.